Summary: Measuring Social Inclusion and Quality of Life Beyond GDP

Opening Remarks:

• Susan Segal, President and CEO, AS/COA

Keynote Speaker:

• José Antonio Ocampo, Professor of Professional Practice in International Affairs, Columbia University; Former Under-Secretary-General, United Nations

Panelists:

• José Antonio Ocampo, Professor of Professional Practice in International Affairs, Columbia University; Former Under-Secretary-General, United Nations (Moderator)
• Christopher Sabatini, Senior Director of Policy, AS/COA; Editor-in-Chief, Americas Quarterly
• Anthony Gooch, Director of Public Affairs and Communications, Organization for Economic Cooperation and Development (OECD)
• Hauke Hartmann, Senior Project Manager, Bertelsmann Stiftung

Watch the full video of this event.

Summary

This public panel explored the increasingly popular practice of formulating indices to measure social inclusion and track quality of life. What is the purpose of doing so—and what should these indices accomplish? What dimensions of inequality should be incorporated, other than economic growth and per-capita GDP? 

Panelists presented several indices and debated their methodology and relevance. Columbia University professor José Antonio Ocampo delivered keynote remarks and moderated a panel of experts, each of whom presented their organization’s respective index: Christopher Sabatini from AS/COA (Americas Quarterly Social Inclusion Index); Anthony Gooch from the OECD (Better Life Index); and Hauke Hartmann from Bertelsmann Stiftung (Bertelsmann Transformation Index and Sustainable Governance Indicators). 

Economic and Social Dimensions

In his keynote remarks, José Antonio Ocampo observed that the phenomenon of tracking economic and social indicators is a fairly new one. GDP only began to be measured after the Second World War and purchasing power parity—a more internationally comparable dimension—was standardized afterward.

But the idea that economic growth was more closely associated with other dimensions of development, particularly social ones, gradually gained steam—which led to the International Labour Organization (ILO) conceptualizing “basic needs” in the 1960s. This development effectively broke ground to measure multidimensional poverty and the idea that everyone is entitled to certain universal levels of social development.

In 1990, the United Nations Development Programme (UNDP) developed the Human Development Index (HDI), an annual assessment to build on the UN’s progress and incorporate elements of health and education. Since then, the Inequality-Adjusted HDI (IHDI), which debuted in the 2010 report, was introduced under the premise that “when there is inequality in the distribution of health, education, and income, the HDI of an average person in a society is less than the aggregate HDI.” The HDI has fairly new measures of both gender inequality and multidimensional poverty.

Ocampo pointed out that an IHDI provides a more accurate assessment of social inclusion and the lack thereof. In a recent project he conducted for the UNDP on Central and Eastern European (CEE) countries, HDI indicators were similar to those in Latin American countries, but Latin America turned out to be a far more unequal region than CEE in terms of distributions in income, education, and health.

Ocampo reiterated the importance of labor as more than a source of income, but one of satisfaction and happiness. He added that issues such as democracy and governance are “very complicated dimensions to include” and underscored the challenges of moving from a qualitative evaluation to a quantitative one.

Index Breakdown

In outlining his index, Christopher Sabatini mentioned that Americas Quarterly disaggregated some indicators by race and gender, using household surveys conducted by the World Bank. His team also used measures of political and civil freedoms tabulated by Freedom House and political participation variables surveyed by Vanderbilt University’s Latin American Public Opinion Project. The index led to various observations on the vast disparities between race and gender in certain countries. Also, in some of the democratic countries featured in the index, the sense of government responsiveness was low. Even in some countries with low unemployment, there was a high amount of informal employment buoyed by low access to formal jobs.

Anthony Gooch then presented the OECD’s Better Life Index (BLI), in which the user is the principal actor and is able to weigh the dimensions according to his or her personal preferences. Gooch added that life satisfaction is the only subjective variable of the BLI. A sample of results across 184 countries indicated that life satisfaction, health, and education were judged by users as the three most important variables, while income and civic engagement registered as the least important. Age-specific concerns were unsurprising. For example, users over 65 years old care more about health. In the Americas, Brazil, Chile, Colombia, Mexico, and the United States were among the top visitors to the interactive BLI page.

Hauke Hartmann, who is responsible for the Bertelsmann Transformation Index (BTI), noted that for each of the 128 countries of the BTI, Bertelsmann Stiftung produces a country report with input from a local and international expert to balance out any bias. Hartmann evoked three traits of social inclusion that the BTI seeks to illustrate: poverty, socioeconomic inequality, and levels of discrimination.

Middle Class Attitudes

When asked by Ocampo, Hartmann said he believed governance was measureable. He observed that the BTI looks at levels of internal management such as policy coordination and resource efficiency, and external management such as domestic outreach and international outreach. Sabatini remarked that the external assessments of political freedom versus citizen assessments of political efficiency provided a certain balance that could try to register some equilibrium. Gooch also noted that voter turnout and level of government transparency were two indicators that the BLI tried to assess.

The panel also marked the launch of Americas Quarterly’s Fall 2012 issue: “Meet Latin America’s Real Middle Class.” Ocampo asked the panel if middle-class attitudes could be captured in inclusion indices. Sabatini responded that “the new middle class are creatures of the systems in which they’ve been created,” and added that Latin America’s middle class has relatively similar beliefs to members of other middle classes.

When an audience member asked if environmental challenges can be considered in future indices, especially as the UN’s Millennium Development Goals are set to expire in 2015, Gooch replied that there is scant data available on the subject and that it is only when development organizations can measure something that a difference can be made. Hartmann concurred, saying that the BTI’s country reports examine a country’s environmental policy, but not environmental well-being due to the scarcity of indicators. But all panelists agreed that environmental implications should be taken into account, given the rapid acceleration of climate change. The UNDP’s latest HDI notes that “the most disadvantaged people carry a double burden of deprivation: more vulnerable to the wider effects of environmental degradation, they must also cope with threats to their immediate environment posed by indoor air pollution, dirty water and unimproved sanitation.”