Economic Progress

Here is proof that economic wealth does not guarantee the best quality of life

A hot air balloon flies above the city of Geneva April 10, 2011. Thirty balloons took part in the 5th Montgolfiades balloon festival which takes place from April 8 to 10. The balloons took off in various parks in the city center and landed in the nearby countryside.

Countries that have the greatest economic wealth do not always have the best quality of life for its citizens. Image: REUTERS/Denis Balibouse

Lianna Brinded
Markets Editor, Business Insider
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Economic Progress

A country having vast economic wealth does not necessarily guarantee a greater quality of life for its citizens, according to data from the latest Social Progress Index (SPI).

The 2016 index ranks all the countries by how socially progressive they are. It includes measures of opportunity, healthcare, education, and tolerance, and while quality of life in these countries does tend to rise with decent GDP growth, it does not guarantee the highest levels of social progress.

The Social Progress Index 2016 results map. Social Progress Initiative
Image: Business Insider

Social progress, as defined by the SPI, is the "capacity of a society to meet the basic human needs of its citizens, establish the building blocks that allow citizens to improve their lives, and create the conditions for individuals and communities to meet their full potential." GDP per capita is based on the World Bank definition.

"The Social Progress Index proves that GDP is not destiny. We need more countries to be like Costa Rica, which squeezes a lot of social progress out of its modest GDP," said Michael Green, Executive Director of the US-based non-profit organisation Social Progress Imperative.

Basically, there is more to life than just money, including social freedoms, accessible healthcare, and education.

Here is the killer chart:

 Social Progress Initiative
Image: Business Insider

Finland is this year’s top performing country in the SPI, followed by Canada, Denmark, Australia, and Switzerland in order. But as the SPI points out, while these countries' social progress scores are very similar, their GDP per capita varies quite a lot.

Conversely, the SPI showed that "there is a weak correlation between countries’ Index scores and the standard measure of income inequality." For example, Ghana and Nigeria both have the same level of income inequality but are remarkably different positions in the index. Ghana ranks at 92 while Nigeria ranks 119.

Deloitte Global Chairman David Cruickshank told Business Insider in an interview that countries, businesses, and consumer groups can learn a lot from this index because they can then truly assess what strengths and weaknesses a country may have and learn where they need to improve operations to compensate.

"Businesses and consumer groups are heavily interested in this index because it is all measurable data," Cruickshank told BI. "It helps all types of companies and employers make types decisions when doing business in these countries, as well as where one country is excelling in what area."

"As the world faces an increasingly complex set of global challenges, the SPI serves as a roadmap that can guide policy investments, business decisions, and resources," he added in another statement.

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