Scottish political debate exists in a peculiar world where the performance of the economy is given a high, sometimes top, priority and yet is rarely discussed in a serious fashion. This allows the Economic Secretary of the Scottish Government to describe quarterly growth of 0.1% as “good news” without anybody batting an eyelid.
At the same time many people, both within and without the Parliament, consider Gross Domestic Product (GDP) to be too narrow a basis by which to judge progress in terms of living standards or the quality of life.
One way forward is to widen the focus of interest. I have recently devised a new measure – the Index of Social and Economic Well-being (ISEW) – which incorporates four of the most essential elements of ‘success’ (income; education; longevity; and inclusivity) in order to try and clarify where Scotland leads and lags in comparison to other countries.
The Index goes beyond a simple measure of GDP growth in trying to determine relative changes in well-being across similarly developed countries. Indeed, given the tenuous link between government policy and short term economic growth, the Index is better suited to identifying areas which government can influence in order to improve the economic fundamentals.
Table 1 and Chart 1 show the results for of 32 OECD countries, including the four constituent countries of the UK, over the decade from 2006 to 2016. Some of the wider findings include:
- Nordic countries continue to do very well;
- Eastern European countries still lag behind but most are catching up fast;
- Mediterranean countries have suffered the most during this decade, with the lower income EU members (Portugal, Spain, Italy and Greece) most affected.
In terms of the UK, the data covers a period when devolution has become well embedded, with time for devolved policies to mature. However, the results do not suggest that this has led to an improved performance, if anything the opposite. Of the five countries that experienced falls in their overall Index scores, three were from the UK: Scotland; Wales; and Northern Ireland. This does not mean that devolution has been a failure, there are many other areas of life where it will have impacted in stronger ways, but it does highlight that greater political devolution alone does not equate to growing prosperity in these key areas.
In Scotland’s case, while it is the economy and education that have led to the drop in ranking, it could be argued that poor health, and the resulting relatively low life expectancy, remains Scotland’s biggest challenge. This should not be interpreted as a criticism of the performance of the NHS in Scotland but instead reflects a lack of success in addressing complicated lifestyle and preventative health issues.
How might the information that the Index provides change things?
First, ISEW can emphasise where Scotland’s poor showing needs to be most addressed, in this case its low life expectancy.
Second, it can highlight the differences in performances that can be found amongst the richest countries around the world. This allows for investigation of where and why the greatest progress has been made. For example, in terms of education – Portugal and Norway – and in terms of life expectancy – Estonia and Korea. What lessons might be learnt in such cases?
Third, the Index can act as a half way house between GDP – which has well documented flaws but is relatively easy to measure and available on an internationally recognised and regular (quarterly) basis – and the new ‘happiness’ measures – which have their own problems and can be difficult to interpret or to recognise policy recommendations from.
By concentrating on this new measure, even if it is only produced annually, a wider definition of ‘success’ can be introduced into the debate and affect policies and budget allocations. Not only would this be a worthwhile development but it might also place Scotland as a leading player in this field.
Photo of Keith Brown MSP with UCP’s Ian McLaren via Scottish Government CC BY-SA 2.0
(For a copy of the full report see here)