Measuring the progress of society
Wellness offers a more holistic view of a country’s development than per capita GDP
How does one measure how “well” a country’s citizens are doing? Traditionally, per capita GDP has been used as the de facto measure of a country’s success and well-being, but per capita GDP is a measure of production and income, not wellness. Revealingly, even the architects of GDP warned against its use as a measure of a country’s overall well-being.
In recent times, calls for policymakers to move beyond economic growth and GDP have been getting louder. And as the demand of Asian people for wellness rises in tandem with their rising incomes, policymakers have begun to pay more attention to wellness-related issues such as health, education and the environment.
It is time to develop measures of wellness, as exemplified in the United Nations’ Sustainable Development Goal number three: “To ensure healthy lives and promote well-being for all, at all ages”.
As part of the Asian Development Outlook: Update 2020 theme chapter on “Wellness in Worrying Times”, we developed a “Wellness Index” which allows us to create a ranking of wellness across 153 countries. Our index joins a growing list of indicators of well-being such as the UN’s Human Development Index.
The index takes a bottom-up approach, starting with the Global Wellness Institute’s definition based on four pillars of individual wellness — physical, mental/intellectual, social and environmental wellness — and leverages multiple indicators to create a global ranking of wellness.
Top-ranking countries provide their populations with high levels of wellness across all dimensions, and we found that countries with strong social welfare programs do well. No wonder all the top five countries are European, with Finland, Luxembourg and Sweden taking the top three spots. New Zealand (7),
Australia (13) and Canada (15) are the only non-European countries in the top 20.
Among the top Asia-Pacific performers are Japan (21), Singapore (30) and the Republic of Korea (39). The absence of some of the world’s richest economies from the top 20 countries underscores the difference between purely material well-being and broader, overall wellness.
There is a clear relationship between income and wellness. For instance, the bottom three — Chad, the Central African Republic and Afghanistan — are among the world’s poorest countries. However, the fact that Nigeria and Pakistan, two middle-income countries, round out the bottom five countries suggests that the correlation between income and wellness is far from perfect. Does this imply that the wellness index is a better gauge of well-being than per capita GDP?
The intuitive argument for using GDP is simple. Higher per capita GDP generally translates into more and better food, housing, education, healthcare, and other key determinants of quality of life. Plotting wellness against per capita GDP of economies bears out a positive correlation. But closer inspection reveals a significant variation in wellness at each per capita GDP level. That is, among equally rich countries, some achieve higher well-being than others.
So policymakers would do well to look at wellness, not just per capita GDP. Disaggregating across the four pillars of the index allows policymakers to direct resources to wellness sectors that lag the most.
The wellness index presents policymakers with a new tool for assessing wellness, which provides a more balanced and holistic view of development than per capita GDP. It helps policymakers identify priority areas for policy measures that will improve the well-being of citizens. For instance, in a country which visibly lags comparable countries in the environmental pillar but not in the other pillars, cleaning up the environment will contribute a lot to improving wellness.
More and better data in the future will allow for further refinement and improvement of the index.
Irfan A. Qureshi is a young professional in the Central and West Asia Department of the Asian Development Bank; Donghyun Park is an economist in the Economic Research and Regional Cooperation Department of the ADB; and Husnain Fateh Ahmad is an assistant professor of Economics at Sewanee, The University of the South in Tennessee, US. The views do not necessarily reflect those of China Daily.