The GDP was an innovation when has been created by Simon Kuznets in 1934. Since that moment it has shaped our lives defining the success of countries. When I studied the GDP I thought that is not a complete method, there are some aspects of life that it doesn’t take into consideration. When I figured out that another index (Social Progress Index), more complete than the GDP, has been developed by the Social Progress Imperative, a US non-profit group, I thought that it was more suitable to measure the social well-being. The greatest news is that Walter Deffaa the Director General of DG Regional Policy of the European Commission announced that the European Union will use the Social Progress Index (SPI).
Likewise Kuznets wrote that GDP is just a tool to help us to measure the economic performance but unfortunately is not a suitable measure of the well-being. The GDP has some limits: for instance it doesn’t consider the negative externalities, like the C02 emission produced by economic activity, the deplantation or the black market. So it was clear that the inventor of the GPD had doubts on this index according to this, before the SPI other economists tried to solve the GDP “matter” creating other alternative indexes such as the Human Development Index, the Genuine Progress Index and the Gross National Happiness. All these indexes tempt to measure the “social issues”. They did a good job sensitizing the international community on the GDP limits, but they are not the final solution. In fact the social progress is the capacity of a society to meet the basic human needs of its citizen. The “Social Progress Imperative” used three questions to define the dimension of SPI: Basic Human Needs, Foundations of Wellbeing, and Opportunity.
- Does a Country provide for its people’s most essential needs?
- Are the building blocks in place for individuals and communities to enhance and sustain wellbeing?
- Is there opportunity for all individuals to reach their full potential?
The Social Progress Index is different from previous experiments, it gauges factors such as healthcare, education, safety, personal freedom and access to food, water and shelter, claiming assess what makes a Country a good place to live in.
The SPI has four design principles that make it different. First of all, it does not use an economic measure but it gauge just the social and environmental indicators, as the aim is to measure the social progress. Secondly, in order to analyze the relationship between economic development and social development it measures the outcomes not the inputs. That means that they search for results not for the efforts. The third principle is that it tries to create an holistic measure of social progress that could be useful for all countries. In this sense the SPI is better than the others indexes. The last principle of the SPI is that it should be a practical tool that will help leaders, businesses and civil society to implement policies and programs that will drive faster social progress. In order to achieve those aims the index is structured around 12 components and 52 distinct indicators. The fact that New Zealand came fifth in the index, despite its citizens having only half the average income of Norwegians, demonstrated that social progress was not tightly wedded to GDP per person. Many of world’s biggest economies (according to the GPD statistic) are not the top 10 countries in the SPI statistics. This result draw attention on the fact that we really need to understand the importance of the social issue.