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The
Social Progress Index
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Michael Green is Executive Director of the Social Progress Imperative, an initiative aimed at redefining how the world measures success. An economist by training, he is co-author (with Matthew Bishop) of Philanthrocapitalism: How Giving Can Save the World and of The Road from Ruin: A New Capitalism for a Big Society. Previously, Michael served as a senior official in the U.K. Government’s Department for International Development, where he managed British aid programs to Russia and Ukraine and headed the communications department. He taught Economics at Warsaw University in Poland in the early 1990s.
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Why was the Social Progress Index (SPI) developed and who was involved in its development?
Michael
Green: The original idea of developing an index to
capture social progress goes back to the 2008 financial
crisis. Together with my friend Matthew Bishop from
the Economist I wrote a book about the financial
crisis, The Road From Ruin. One thing that
we identified was that the financial crisis was very
much a crisis of measurement. Then during the 2009
World Economic Forum Global Agenda Council, Matthew
raised the need for developing an index capturing
the level of social progress of a country.
A
group of us started working on this idea in 2010 and
then approached Professor Michael Porter from Harvard
Business School to help us on the development of a
Social Competitiveness Index who brought in Scott
Stern from MIT. Beside the initial support of Avina
Foundation, Skoll Foundation and Compartamos Banco
from Mexico, we also got support from Cisco and Rockefeller
Foundation. Deloitte joined us as key partner in
2013. So it was a big collaborative effort. The first
spi was then launched in a beta version in April 2013.
Which dimensions does the SPI cover?
Michael
Green: First, the spi is based only on social and environmental indicators. Most of the other composite indicators (e.g. the Human Development Index, the OECD Better Life Index, the Gross National Happiness Index) mix up economic and social measurements, while the SPI measures social progress without considering economic dimensions. The SPI is
therefore a measure which is complementary to GDP,
allowing comparisons between social progress and economic
development as measured by gdp. Secondly, the SPI
is focused on outcomes. For instance, it measures
the health conditions achieved in a country and not
expenditure on the health sector – so the SPI is a
descriptive tool, not a normative one. Thirdly, the
index is >applicable to all countries, independently
from their level of economic development.
The SPI is a useful tool for supporting both public debate and policy-making. This composite indicator covers three dimensions broken down into 12 components and aggregates 52 distinct indicators into a single score; a country ranking is also available. Owing to its structure, it can be easily disaggregated in its different components. Therefore, it can be used in order to identify countries’ weaknesses and strengths.
The SPI measures social progress, i.e. how successful
a society is at delivering social progress to its
citizens, not how happy it is. The two aspects may
sometimes overlap, but they refer to different concepts.
The notion of social progress the SPI is based on
three ‘dimensions’:
(1)
satisfying citizens’ basic needs (nutrition and basic
medical care, water and sanitation, shelter, personal
safety), (2) providing every citizen with the building
blocks of a better life (access to basic knowledge,
information and communications, health and ecosystem
sustainability), (3) giving citizens the opportunity
to pursue their hopes, dreams and ambitions free from
obstacles and barriers (personal rights, freedom and
choice, tolerance and inclusion, access to advanced
education).
Which are the main strengths of the SPI in comparison with other measures of social progress?
Michael
Green: One strength is that the SPI is built only on social and environmental indicators. This allows for comparisons with gdp trends: given a certain GDP level, countries’ performances on social progress may even substantially differ. In other words, economic and social progress may diverge.
Furthermore, the SPI methodology is transparent, based on data from reliable sources such as the UN agencies.
And what are the main weaknesses of the index?
Michael
Green: Our biggest challenges are data quality and
availability. The best data available are not always
as methodologically robust as we would like for issues
such as shelter and mental health, for example. On
Ecosystem Sustainability, data on greenhouse gas production
would ideally be complemented by those on GHG consumption.
I would also love to find data on the quality of life
of people with disabilities, which is such an important
issue but where there is presently no data.
Using
the best data we can find we have pretty good global
coverage – 133 countries were covered by the 2015
Index, corresponding to the 94% of the world population
– but our goal is to have a Social Progress score
for every country in the world.
Has every component of the index the same weight?
Michael
Green: All components of the index are equally weighted. Within each component, however, not all indicators are equally weighted. The different weights have been defined according to statistical techniques such as Principal Component Analysis. Further methodological information is available on our website.
What are the key findings from the 2015 SPI and what are the main differences to 2014?
Michael Green: Our key finding is that on average
there is a positive relationship between economic
growth and social progress. Wealthier countries such
as Norway generally show better social outcomes than
lower income countries. However, given a certain GDP
level, the variability among countries can nevertheless
be considerable. Hence, economic performance alone
does not fully explain social progress. At any level
of GDP per capita, there are opportunities for higher
social progress and risks of lower social progress.
The
2015 SPI results were very similar to 2014. This is
a good confirmation of the model’s robustness. This
might be explained by the fact that the trend of the
variables captured by the SPI (e.g. the adult literacy
rate) depends on policies’ long-term effects. Nevertheless,
the limited data availability (only 2014 and 2015
results are currently available) doesn’t allow for
identifying any trend yet.
By
looking at the social progress drivers, we didn’t
find a significant correlation with income inequality,
measured by the Gini coefficient. We did, however,
find a strong negative correlation between social
progress and poverty rates (both absolute and relative).
How could decision-makers make use of the findings from the SPI?
Michael
Green: The SPI is a useful policy tool, which can
contribute to defining development strategies aimed
at fostering social progress as well as economic growth.
An
example of its application is provided by the measurement
and monitoring of the national development plan of
the Government of Paraguay – “Paraguay 2030” – which
was recently launched. In this context, the SPI is
used to measure the country’s social well-being and
the impact of social investment.
How
can you assure that your index is taken up by policy
makers?
Michael
Green: The SPI is a composite indicator, providing an aggregate score. It can therefore be easily understood by both policy makers and the general public. It has the potential to become a reference in the political debate on social progress, as GDP is for economic growth.
Could the SPI be applied at regional level, for example in Europe?
Michael
Green: There are currently applications of the SPI in some regions of the Americas and of Europe.
Several initiatives have already been launched to apply the SPI at regional level in Latin America.
The first sub-national Social Progress Index was launched in August 2014 for 772 municipalities across the Amazon region of Brazil. The methodology has been adapted to the specific context: while the index has kept its structure of twelve components, the indicators have been slightly modified according to data availability and their relevance for those municipalities. For example, an indicator on educational attainment, for which data are not available at national level, and on waste collection and forestry, which are relevant in the Amazon region, have been included. The SPI framework has enough flexibility to be tailored to fit local contexts and realities.
In September 2015, the application of the SPI to 13 selected cities in Columbia will start, to provide useful and up-to-date information for urban policy makers.
In the USA, Michigan has been the first state to adopt the SPI. The application of the SPI to some cities and other states across the US is planned in 2015.
At the end of 2014, the development of a SPI prototype for the NUTS 2 EU regions started in cooperation with the Directorate General Regional and Urban Policy of the european commission. As in the case of the Amazon region, the 12 components structure has been kept, but the set of indicators is currently being adapted to the specific context.
When do you expect the first results for the European regions?
Michael
Green: In October 2015, we will launch a trial version for the EU area and a consultation process involving the most relevant stakeholders (governments, businesses and civil society). The feedback will be vital for further SPI development in Europe.
We
would like thank Michael Green for this insightful
interview.
To download the Social Progress Index Report 2015, please click here.
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