What’s the best country in the world to live in? Is it the one with the best food? The longest life expectancy? The best weather? For the past 70 years, most governments have relied heavily on a single number to answer that question. This number influences elections, the stock market, and government policy. But it was never intended for its current purpose; and some would argue that the world is addicted to making it grow... forever. This number is called the Gross Domestic Product, or GDP, and it was invented by the economist Simon Kuznets in the 1930s, to try and gauge the size of an economy in a single, easy to understand number.
GDP is the total monetary value of everything a country produces and sells on the market. To this day, GDP per capita, which is just the total GDP divided by the number of people living in that country, is widely seen as a measure of well-being.
But GDP doesn’t actually say anything direct about well-being, because it doesn't take into account what a country produces or who has access to it. A million dollars of weapons contributes the exact same amount to a country’s GDP as a million dollars of vaccines or food. The value society derives from things like public school or firefighters isn’t counted in GDP at all, because those services aren’t sold on the market. And if a country has a lot of wealth, but most of it is controlled by relatively few people, GDP per capita gives a distorted picture of how much money a typical person has.
Despite all that, for a long time, higher GDP did correlate closely to a higher quality of life for people in many countries. From 1945 to 1970, as GDP doubled, tripled or even quadrupled in some western economies, people’s wages often grew proportionally. By the 1980s, this changed. Countries continued to grow richer, but wages stopped keeping pace with GDP growth, or in some cases, even declined, and most of the benefits went to an ever-smaller percentage of the population.
Still, the idea of capturing a nation’s well-being in a single number had powerful appeal. In 1972, King Jigme Singye Wangchuk of Bhutan came up with the idea of Gross National Happiness as an alternative to Gross Domestic Product. Gross National Happiness is a metric that factors in matters like health, education, strong communities, and living standards, having citizens answer questions like, “How happy do you think your family members are at the moment?” “What is your knowledge of names of plants and wild animals in your area?” and “What type of day was yesterday?” The United Nations’ Human Development Index is a more widely used metric; it takes into account health and education, as well as income per capita to estimate overall well-being.
Meanwhile, a metric called the Sustainable Development Index factors in both well-being and the environmental burdens of economic growth, again, boiling all this down to a single number. Though no country has been able to meet the basic needs of its people while also using resources fully sustainably, Costa Rica currently comes the closest. Over the past few decades, it’s managed to grow its economy and improve living standards substantially without drastically increasing its emissions. Other countries, like Colombia and Jordan, have made notable progress. Costa Rica now has better well-being outcomes like life expectancy than some of the world’s richest countries.
Ultimately, there are limits to any approach that boils the quality of life in a country down to a single number. Increasingly, experts favor a dashboard approach that lays out all the factors a single number obscures. This approach makes even more sense given that people have different priorities, and the answer to which country is best to live in depends on who’s asking the question.
So what if that were you designing your countries well-being metric? What do you value, and what would you measure?
