REYJKAVIK, Iceland – What if we could understand why Ethiopia has lowered its maternal mortality rates, despite a weak economy? Are countries such as Mozambique and Rwanda, which have impressed economically in recent years, spreading economic benefits for social progress? The Social Progress Index (SPI) is a new measurement index developed by the business community to help quantify social progress, separate from economic indicators. But is the business community shifting the goalposts to measure success on its own terms?
Behind this new index is the Social Progress Imperative, an organization made up of philanthrocapitalists, social entrepreneurs – from organizations such as Deloitte, Cisco and the Skoll Foundation – and policymakers. The group formed in 2009 after the financial crash. Many in this circle felt that capitalism should be more ‘inclusive’ and that businesses have an inherent, crucial role to play in this process. In the years following social enterprises have increased in numbers, and the merits of corporate social responsibility have spread far and wide. And in 2013, the Social Progress Imperative launched its index.
Many of our traditional economic indicators, so the central tenet of the Social Progress Index goes, have failed to understand the dynamics of social progress. Often the view has been that “if we can improve GDP per capita and resources available in a society, then life gets better,” said Michael Porter, a Harvard economist behind the index, in his speech at the Social Progress Imperative What Works conference last week in Reyjkavik.
The group believes that much of traditional economic growth across the world had driven “bad capitalism” with few social rewards, according to Michael Green, author of ‘Philanthrocapitalism’ and executive director of the Social Progress Imperative. Green added that “bad capitalism” has, in fact, hindered social progress in many parts of the world, as it “chooses to prioritize the short-term over the long-term,” such as depleting our environment of its natural resources or exacerbating social and economic inequality.
According to Green, the aim was to produce an index “that separated out the economic and the social,” in a way that focuses on “outcomes and not inputs.” The Social Progress Index chooses to focus on the effect of policy on social outcomes to try and work backward see why countries are failing at certain indicators.
The index takes indicators from across the field to gain a holistic picture of social progress. The questions it asks are rigorous. For each country it builds a profile that takes into account questions like: are your elections free and fair? How tolerant are you, socially, of homosexuals? Are your citizens’ lives being shortened by pollution in your skies? In short, it tries to condense down a whole plethora of statistics into an easily digestible and visual mindmap to show how countries have improved, or can improve in certain areas.
Given the composition of this partnership, their central goal, therefore, was to make businesses “recalibrate and think about what their contribution is to society,” Green said. Figures at the conference roundly reinforced the idea that “the social progress message is a very powerful one for business.”
The minds behind the index, including Matthew Bishop, writer at The Economist and an SPI board member, felt that social enterprise needed “greater measurements and the ability to compare each other’s performance.” In order to break down the traditional role of “government leading social innovation and business as wealth creating,” building an index “was absolutely crucial” to try and reinforce “how business can play a more positive role in society,” Bishop said.
In some ways the index offers a roadmap for social businesses and enterprises to define progress on their own terms, beyond traditional understandings of the private and public sector. However, we must be wary. Though words such as “inclusive capitalism” are bandied around increasingly these days to signal a new age, free from ideological battlegrounds between public and private, much of what the organization’s founders say about it confirms that the index is more about being “business inclusive” than “inclusive capitalism.” In an age where social enterprise and corporate social responsibility is all the rage, and business must assert itself into the social fabric of society, the index can be claimed as being used as a proxy to assert business-led definitions for measuring progress.
There are also some flaws in the index’s design. For all of the index’s valiant efforts to move on from the GDP fetish, critically the SPI chooses to omit economic indicators of every kind, which is strange when said that the index came from a team of economists. But what is the value in this?
Surely it is important to look at how a country is spending as a proportion of its GDP on health care, for example? As social entrepreneurs it is clear that they want to understand the social factors that drive economic growth, but it is not clear why they have chosen to throw the economic baby out with the bathwater. Observing economic inequality can allow policymakers to improve services to poorer socioeconomic groups. Ignoring economic inequality blinds you to the lack of opportunity that the poor have in many respects, and ignores clear correlations between income inequality and, say, “access to advanced education” (a measurement of the SPI).
At the conference, countries such as Nepal are highlighted as success stories, as “over-performers” relative to their economic standing, as Porter put it. Despite a stagnating economy and political turmoil, its health system has outperformed some other countries that are around and above its GDP rank. Nepal met its MDG health related targets, such as reducing maternal deaths and has immunized more than 90 percent of its children with all WHO-recommended vaccinations. Similarly Rwanda has performed well on its health indicators, despite starting from a low economic base.
The index also sets out to show how developed countries are failing in certain categories. Porter, an American, said that although the U.S. has one of the highest GDP-per-capita rates in the world, it still lags. The U.S. is behind many other countries that are at similar levels of development, including Norway, Germany and France, on health indicators.
But this is all mostly quantifiable. You can easily demonstrate an improvement in a country’s literacy rate, the number of children vaccinated or reductions in maternal and child mortality rates. But what about more abstract, subjective indicators that the SPI tries to measure, such individual freedoms? In an authoritarian theocracy, or in countries where there is a clear state-led persecution of religious and ethnic minorities, perceptions of religious tolerance will vary from community to community.
When asked by Bishop during a panel discussion about Rwanda’s record on human rights and press freedom, Porter replied that “if you’re in Rwanda riding around in a car listening to the radio, there’s immense press criticism there all the time,” citing that the figures on citizens’ trust in their governments “is off the charts.”
Again this is perception and highly relative according to people’s lived experiences. Trusted sources on human rights, particularly Amnesty International, have highlighted how human rights defenders are targeted, voters intimidated and journalists harassed by state authorities. Furthermore the country’s constitution has been amended to allow President Paul Kagame, who came into power in 2000, to run for another term uncontested. Despite this evidence, Porter’s explanation was that “somehow our international institutions somehow view the issue differently than at the level of the citizen.”
The index also highlights where countries have been successful and where they haven’t; it highlights the positives. It gets away from the traditional, often myopic, broad brushstroke view that all of Africa is a basket-case, for example. There are successes throughout the continent, and across the Global South, which are very well documented, but the big question is do we need an index for this? The effort that has gone into compiling such data is laudable and can be a useful toolkit for planning development and policymaking, but ultimately it fails in measuring the indefinable, as with the case of Rwanda.
SPI is part of the growing reality that businesses and social enterprises will play a greater role in development, beyond being wealth creators; this is not just the self-aggrandizement of the SPI movement. It is part of the post-2008 debate on responsible “inclusive capitalism” that has led businesses, SPI champions or not, to redefine their roles in society.
The Social Progress Imperative invited Humanosphere to attend the Social Progress Imperative What Works event in Reyjkavik, Iceland, and provided conference fees and travel expenses.