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Launching the Social Progress Index

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“Visions without metrics are hallucinations”, said one speaker at this year’s Skoll World Forum, which hosted the launch of the beta version of the Social Progress Index on April 11th. The importance of rigorously measuring social impact is one of the key themes of our writing about philanthrocapitalism. That is why we have been enthusiastic supporters of the idea of creating the Social Progress Index and are delighted that it has now become a reality.

In this first iteration of the Index, the top ranked country is Sweden, followed by the UK, Switzerland and Canada. The United States is 6th of the sample of 50 countries (a number that will increase in years to come). South Korea is 11th. The leading Latin American country is Costa Rica, ranked 12th. The UAE is 19th, Turkey 20th, Tunisia 28th, China 32nd and Botswana 35th. Bottom of the pile is Ethiopia, just below Nigeria.

The ranking is devised using 52 different metrics, grouped into three main categories: basic human needs; foundations of well-being; and opportunity. This lets users of the Social Progress Index drill down into the details of how well – or badly – a society is doing on different aspects of social progress and, crucially, identify opportunities for improvement.

In future, an explicit measure of the capacity of a country to do social innovation will be added.

As we have written before, Matthew played a catalytic role in the creation of the index. As part of the World Economic Forum Global Agenda Council on Philanthropy and Social Investment he helped articulate the need for better measures of how countries compare with each other on delivering a better society. The traditional measures of GDP and competitiveness do not adequately pick up on non-economic measures of progress. The Human Development Index and various other indices tracking national happiness, sustainability etc  are useful but not designed to highlight what policies and innovations work, or don’t, for particular aspects of social progress.

The Social Progress Index is the name given to what started out as the Social Competitiveness Index. It has been put together by an organisation called the Social Progress Imperative, of which Michael is now the executive director and Matthew is an advisory board member. Much of the detailed work of turning a vague idea into a thought provoking index has been overseen by Michael Porter, the famed Harvard Business School professor.

Under Porter’s guidance, it was decided to exclude economic income from the measures in the Social Progress Index. By contrast, economic income accounts directly for a large part of the Human Development Index. Porter points out that though there is a good correlation between economic growth (as measured by GDP) and the Social Progress Index, it is not perfect. Economic growth alone does not explain levels of social progress. The Index shows that countries at similar levels of GDP – Costa Rica and South Africa, for example, or Ghana and Nigeria – can have very different levels of social progress. It also finds that once a country reaches high income status, social progress decelerates so that the richest county on the ranking, Switzerland, does not do dramatically better than a country less than half as wealthy, such as Poland.

This is a beta version of the Social Progress Index. To ensure the rigorous measurement the world needs, it will need to get better – much better. The definition of social progress needs to be vigorously debated, as do the measures used. As a better picture emerges of where social progress is happening, vigorous debate will be needed to learn what factors and policies led to this progress. Send your comments to feedback@social-progress.org.

15 replies on “Launching the Social Progress Index”

Hi Mike (& Bish-Bosh),
Strikes me that a related project of interest to major donors and ordinary givers alike might be the creation of a Philanthropic Ratings Agency (PRA) – hooked to the Social Progress Index of international relief charities and NGO’s (guess you’d need a different set of metrics – but with much overlap?).
The SPI could identify the countries in greatest need of political reform/innovation in their social impact strategies and the PRA could help donors channel funds into organisations that leverage cash into social impact most effectively.
Kind regards,
David
PS Which continent are you on?
PPS Played bridge for first time in 10 years on a ski holiday last week.

Of course Sweden, Britain, and Switzerland have the best Social Progress Index (SPI) scores, because these countries have some of the highest GDPs per capita of the fifty countries in the index. It is no coincidence that the three lowest SPI scores – Ethiopia, Nigeria, and Uganda, have very low GDPs per capita. The best way to understand the Social Progress Index is therefore to control for GDP per capita. Corr Analytics did simple regression analysis on the Social Progress Index data to show that approximately 84% of the index is explained by gross domestic product (GDP) per capita. Predictably, countries with large economies relative to their populations will have more wealth that can be channeled to basic necessities measured by the Social Progress Index.
Therefore the gold standard used by economists for decades — GDP per capita — works quite acceptably for well-being. Interestingly for development economists, when comparing the index to GDP per capita using loglinear regression, it shows that for countries below the mean GDP per capita ($16,030 in 50 countries sampled by the Social Progress Index), the positive effect of GDP per capita growth on social progress is very high. The effect after mean GDP per capita is still positive, but of a much lesser magnitude. Development funding, therefore, yields the highest social progress gains in relatively poorer countries.

Adding the degree of democracy to the model brings the explained variance of SPI to 87%. Democratic nations are better able to leverage GDP for basic necessities, because of effective voting coalitions of the economically disadvantaged.

The theoretical range of the Social Progress Index is zero to 100, with 100 indicating the greatest possible provision of well-being. The actual range of the data is 32 (Ethiopia) to 65 (Sweden). Given the 33-point actual range, the effect of changes in GDP per capita and democracy are substantial. An increase in $10,000 GDP per capita for the poorest country in the dataset yields an expected increase of 17.5 points on the Social Progress Index. That same $10,000 increase for the richest country yields only a 0.6 expected increase on the Social Progress Index. A change from pure dictatorship (autocracy) to full democracy yields an expected 7.5-point increase on the Social Progress Index.

The regression also elucidates countries that are social performers and laggards given GDP per capita at their disposal to provide well-being. Vietnam, Costa Rica, the Philippines, Britain, Bulgaria, and Argentina are the six highest performers given GDP per capita. With the exception of Vietnam, these countries are democratic. The UAE, Nigeria, Russia, South Africa, Kazakhstan, and Botswana are the six lowest performers on the Social Progress Index given GDP per capita. Most of the laggards are dictatorial or have pseudo-democratic forms of government.

Graphs, tables, and data further illustrating the arguments above are available at http://www.canalyt.com.

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