The Gross Domestic Product has been used as an index of economic progress since the dawn of the nineteenth century. The use of GDP as an index of economic growth and development was inspired by the works of Simon Kuznets who stressed the importance of this measure of the total economic production in a nation in a year as an index to compare the economic improvement a country makes over time as well as for a cross-country comparison. But Kuznets himself later on expressed his view on the inability of GDP to take into account a number of important aspects of growth.
It is important to note that though until now we stressed on the GDP to indicate how an economy is doing, GDP fails miserably in measuring the social aspects of development. It can measure only the overall prosperity of a nation. First and foremost, it does not take into account the environmental aspect that is related to growth. It does not suggest us whether the growth that a country is experiencing is sustainable in terms of the environmental damage it is producing. It also does not consider how well distributed the rising income of a nation is. And finally it cannot be treated as an index of the overall well being of a nation. In this context, the Social Progress Index is a comprehensive index that takes into account a number of aspects of human well being. The Social progress index considers 3 important aspects of a good life. 1. Basic Human Needs: This includes Nutrition and Basic Medical care, Water and Sanitation, Shelter, and Personal safety. 2. Foundations of Well Being: This includes access to knowledge, basic information and environmental protection. 3.Opportunity: this includes personal rights and freedom and access to advanced education. Indeed, this is an important index. With the rapid progress of information science a lot of aspects of human well being can be measured nowadays. So the SPI uses these aspects which can be measured and is important for a good life.
We can also see in the video that the SPI increases steeply with a small increase in GDP, at the initial stages of growth of nations. That is, a country with a lower GDP can achieve a higher increase in SPI with a slight increase in GDP. This increase becomes flatter with a higher GDP. A country that has achieved a high level of GDP can expect a smaller increase in SPI with a small increase in GDP. A country should now lay more importance on the increase in SPI rather than on solely increasing GDP.
Works Cited
Green, M. (2014, October). What the Social Progress Index can Reveal about your country. Rio deJaneiro. Retrieved from http://www.ted.com/talks/michael_green_what_the_social_progress_index_can_reveal_about_your_country
