The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development Bank Institute

(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

GDP is Not Destiny

Social Progress & Inclusion in a Changing World

Amit Kapoor
Chair, Institute for Competitiveness, India
May 2, 2017 @ Global Think Tank Summit 2017
 Global Tolerance Index

Country Tolerance Index

Canada 1
Iceland 2
New Zealand 3
Australia 4
United Kingdom 5
Brazil 15

Bangladesh 43
Pakistan 54
South Africa 57
China 96
India 108
Source: Global Creativity Index 2015
Rising
Intolerance
 Relationship between
competitiveness and
creativity

This includes the top 10

competitive cities in India
excluding Gurgaon and
Noida. The coefficient of
correlation between the
two comes out to be 0.62.

Source: City Competitiveness Report

2016 and Creative Economy o Cities
2016
The Obsession with GDP
GDP, an estimate of all the final goods and services was developed to provide a window to
the economic situation of a region in 1940s.

The focus of the world then was to speed up economic activity, hence GDP became the de-
facto language of wellbeing of nations. And for decades, the predominant focus of all the
nations has been on maximizing the GDP and other economic proxies so as to bring
prosperity to their regions.

Economic Social
Development Development

But the paradigm that economic progress will lead to social progress may or may not hold
true.
Measuring Performance
Economic Growth does not always leads to advancements in social progress.

Also, social progress can influence the economic development of a region.

Economic Social
Development Development

Therefore, for a complete understanding of inclusive growth it is important to measure

social progress directly.

The measurement of social progress alongside economic growth will help the regions to
have a holistic view of their performance.
Social Progress Index
The Social Progress Index is a comprehensive framework designed to measure the
wellbeing of individuals, assessed through social and environmental indicators
conceived on the understanding that regardless of the economic achievements, a
region cant be termed as successful if it fails to provide for peoples most essential
needs, protect its environment, deliver building blocks to enhance and sustain
individuals wellbeing or help communities to grow.
It is the starting point of a strategy that seeks to improve the quality of lives of people
around the world.
Social Progress Index measures the progress based on three dimensions.
 Components Social Progress Index
Social Progress Index

Dimension

Basic Human Needs Foundations of Wellbeing Opportunity

Nutrition and Basic

Access to Basic Knowledge Personal Rights
Medical Care

Components
Access to Information &
Water and Sanitation Personal Freedom & Choice
Communication

Shelter Health & Wellness Inclusion

Access to Advanced
Personal Safety Environmental Quality
Education

Are the building blocks in place for individuals

Does a country provide for its peoples and communities to enhance and sustain Is there opportunity for all individuals to
most essential needs? wellbeing? reach their full potential?

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Dimension Relationship with GDP Per Capita: Basic Human Needs

R-Squared: 0.8

21
 DIMENSION RELATIONSHIPS WITH GDP PER CAPITA: FOUNDATIONS OF WELL-BEING

R-Squared: 0.67

22
Dimension Relationships with GDP Per Capita: Opportunity

R-Squared: 0.57

23
Social Progress And Income Inequality

Income Inequality
(Gini Coefficient) is
weakly related to
Social Progress.

R-Squared: 0.14

24
Social Progress and Poverty

Social Progress is
strongly correlated
with poverty
headcount at
$2/day (Only low
and middle income
countries).

R-Squared: 0.69

25
Social Progress and Economic Development

Source: Social Progress Imperative

Social Progress and Economic Development

Countries with
similar GDP per
capita have large
differences in
social progress
scores.
Social Progress and Economic Development
INDIA ON THE GLOBAL SOCIAL Key Insights
PROGRESS INDEX Social Progress Imperative
ranks countries on the basis of
social and environmental
progress.

India moved up to 98th rank

in 2016 index.

The key findings of the index

about India include:

On an absolute basis, India

performs well on affordability
of housing, political rights and
gender parity in basic
education.

There is room for

improvement when the country
is analysed on performance is
tolerance and inclusion,
pollution and health.

On a relative basis, Indias

scores are well within the range
of expected scores.

It outperforms its economic

peers corruption and political
rights.
Social Progress Index India - Indicators

Basic Human Needs Foundations of Wellbeing Opportunity

Nutrition & Basic Medical Care Access To Basic Knowledge Personal Rights
Infant Mortality Rate Gross Enrolment Ratio Property Rights
Maternal Mortality Net Enrolment Ratio Child Labour
Rate Drop Out Rates Access To Judiciary
Prevalence Of Anaemia Girls To Boys
Children Who Are Enrolment Personal Freedom & Choice
Underweight Literacy Rate Corruption Cases
Contraception Usage
Water & Sanitation Access To Information & Human Trafficking
Rural Sanitation Communication Early Marriages
Coverage Access To Television
Improved Source Of Internet Subscribers Inclusion
Water Phone Subscribers Sex Ratio (Child)
Fully Covered Newspaper Percentage Of SC
Habitations Circulations Enrolment (Higher
Typhoid Cases Education)
Diarrheal Cases Health & Wellness Access To Insurance
Suicides Due To Illness Financial Inclusion
Shelter Average Obesity Women
Access To Electricity Life Expectancy Representation In PRIs
Power Deficit HIV Prevalence
Housing Shortages Leprosy Prevalence Access To Advanced Education
Households In Pucca Gross Enrolment Ratio
Houses Environmental Quality (Higher Education)
Change In Forest Cover Number Of ITIs
Personal Safety Renewable Energy Percentage Of Female
Rate Of Murder Crimes Water Withdrawals Graduates
Rate Of Violent Crimes Acute Respiratory Infection Number Of UGC
Crimes Against Women Land Degradation Colleges
Deaths Due To Road Solid Waste Treatment
Accidents

30
SOCIAL PROGRESS Index India AND ECONOMIC DEVELOPMENT

Key Findings:

There exists a positive and strong

relationship between GDP per
capita and Social Progress Index.

For instance, Bihar with a GDP per

capita of 31,199 scores 43.6 on
Social Progress Index. On the other
hand, Goa with a GDP per capita of
224138 has a social progress score
of 63.8.

Third, despite the correlation

among GDP per capita and social
progress index, considerable
amount of variability in social
progress is observed among states
with comparable levels of GDP per
capita.

31
SOCIAL PROGRESS INDEX AND GDP:
Quick Wins
COMPONENT LEVEL RELATIONSHIP
This includes components
that show rapid
improvements with GDP
Shelter Access to Information & Communication
per capita. But the
relationship is leveled off at
moderate income levels.

Shelter and Access to

Information &
Communication show
drastic improvements at
relatively lower levels of
income.

This group of
components should be
central to the agenda for
development in the country
as economic development
will lead to improvements
in these aspects of social
development.
SOCIAL PROGRESS INDEX AND GDP:
Steady Improvers
COMPONENT LEVEL RELATIONSHIP
Those components that
show improvements with
GDP per capita that does
Nutrition & Basic Medical Care
not levels off until a very
high income level are
clubbed under steady
improvers.

Nutrition and Basic

Medical Care also shows
strong correlation with per
capita GDP but the
improvements are not as
rapid as in the case of
Quick Wins. The states
need to make systematic
investments overtime in
health facilities to enhance
the wellbeing.
SOCIAL PROGRESS INDEX AND GDP:
COMPONENT LEVEL RELATIONSHIP
Access to Basic Knowledge
Access to Advanced Education
Hard Problems
These components show
developments with GDP per capita
but their relationship is highly
Personal Freedom & Choice variable.
Access to Basic Knowledge,
Personal Freedom & Choice and
Access to Advanced Education
depicts the most complicated
relationship to economic
development.
Although, the improvements in
GDP levels can help in building an
educational system the
relationship is weak. This might be
because of the fact that along with
investment in infrastructural
facilities it is important to analyze
the quality of the system as well.
The same story holds for Access to
Advanced Education.
Similarly, we expect people to be
more aware of the usage of
population control measures; less
number of cases of early marriages
are expected to be encountered as
more freedom is there for people
to make choices in a developed
economy. But this does not mean
that these developments are
entirely dependent on the
economic development of a region.
SOCIAL PROGRESS INDEX AND GDP:
COMPONENT LEVEL RELATIONSHIP
Health & Wellness Inclusion
Toughest
Challenges
Six componentsPersonal
Personal Safety
Safety, Water & Sanitation,
Health & Wellness,
Environmental Quality,
Inclusion and Personal Rights
have a mixed and uneven
relationship with GDP per capita
reflecting different patterns by
the indicator.

Some of the indicators within

these components improve with
economic development, while
others have a flat or even
negative relationship with
Water & Sanitation Personal Rights Environmental Quality economic development.

It is observed that economic

developments are not able to
explain the safety and security
scores of the regions. The
correlation between the
variables (Personal Safety and
log GDP per capita) is 0.06. The
low correlation coefficient along
with high overall scores point
out the importance of safety
issues across regions.
Irrespective of the level of
economic growth states are
addressing security concerns.
 Social Progress Index and GDP:
Dimension Level Relationship
Dimensions of Social Progress and Economic Development
The model predicts that GDP per capita
explains 49%, 45% and 15% of the
variation in Basic Human Needs,
Foundations of Wellbeing and
Opportunity scores respectively.

Theoretically also we expect Basic

Human Needs to have the highest
correlation with economic growth. At low
levels of income, a small improvement in
GDP per capita can make resources
available for states to invest in basic
needs of survival such as housing, safety
etc.

But findings also suggest that the ability

of a state to utilize the resources can have
a huge impact on the availability of basic
needs. For example, Odisha and Madhya
Pradesh both are low income states but
Madhya Pradesh has been able to provide
its citizens with basic needs in a better
way.

Notes
1. Per capita income is the latest data available on the Press Information Bureau, Government of India for all the states.
2. Size of the bubble represents population of the state.
Tool to Compliment GDP
Social and The aim of the index is to measure progress directly without focusing on economic
indicators. This will also help in establishing a relationship between economic and
1. environmental
social development. It aims to measure social progress directly, rather than through
indicators economic proxies.

The index focusses on outcomes not on the inputs.

Outcomes not Example: The indicator under Water and Sanitation will focus on how many
2. households are there with drinking water facilities rather than the amount invested
inputs
by the government on providing these facilities.

The aim of the index is to go beyond measurement and provide results that will help
3. Actionable government, business and civil society to implement policies and programs that will
drive faster social progress.

It aims to create a framework for the holistic measurement of social progress that
4. Relevance encompasses the health of societies at all levels of economic development.

38
SPI and Strategy for Social Development: Benchmarking Country Social Performance

Social Progress Index allows us to see how a country is performing in

absolute terms and relative to its economic peers. Every country has
areas for improvement.
Social Progress Index allows us to look at a countrys performance
holistically, looking at how performance varies across different aspects
of social progress. It breaks down the silos between social issues and
helps prioritization.
Social Progress Index identifies countries that are doing well overall
and on particular aspects of social progress. Helps identify best
practice and potential solutions.

39
 Social Progress and Shared Prosperity

The Social Progress Index can serve as a powerful complement to the

Banks historical measurement and development agenda

We believe that a measure like Social Progress Index can potentially

supplement the Banks existing income-based measure of shared
prosperity

How could we work together and develop the data to construct such a
measurement framework?

40