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2020 EU Social Progress Index THE REGIONAL DIMENSION OF SOCIAL PROGRESS IN EUROPE: Presenting the new EU Social Progress Index Paola Annoni and Paolo Bolsi WORKING PAPER A series of short papers on regional research and indicators produced by the Directorate-General for Regional and Urban Policy WP 06/2020 Regional and Urban Policy ACKNOWLEDGEMENTS Authors would like to thank colleagues in the Policy Development and Economic Analysis Unit of the Directorate-General for Regional and Urban Policy, and in particular Moray Gilland, Head of Unit, Lewis Dijkstra and the Geographic Information System team. They are also particularly grateful to John Walsh of the Evaluation and European Semester Unit, and the webmaster team for their assistance in the development of the web tools and integration on the Open Data Portal for European Structural and Investment Funds. Finally, special thanks to Manuela Scioni of the Department of Statistics of the University of Padua, for her insightful comments on the statistical methodology. LEGAL NOTICE This document has been prepared for the European Commission Directorate-General for Regional and Urban policy. The views expressed in this article are the sole responsibility of the authors and do not neces- sarily correspond to those of the European Commission. More information on the European Union is available on the Internet (http://www.europa.eu). Luxembourg: Publications Office of the European Union, 2020 © Cover image: iStock/Orbon Alija © European Union, 2020 Reproduction is authorised provided the source is acknowledged. THE REGIONAL DIMENSION OF SOCIAL PROGRESS IN EUROPE: Presenting the new EU Social Progress Index Paola Annoni and Paolo Bolsi TABLE OF CONTENTS WHY WE NEED COMPARABLE METRICS FOR SOCIAL PROGRESS 3 THE EU REGIONAL SPI: AN OVERVIEW 4 THE UNFOLDING FAN 6 STRENGTHS AND WEAKNESSES 10 INTERACTIVE WAYS TO DIG INTO THE RESULTS 12 REGIONAL SCORECARDS: COMPARISONS WITH GDP AND POPULATION PEERS 12 SOME INTERESTING RELATIONSHIPS 14 IMPROVEMENTS AND CHANGES OVER TIME COMPARED TO THE FIRST EDITION 16 MORE RELIABLE INDICATORS AT THE REGIONAL LEVEL 16 BETTER METRICS 16 HOW THE INDEX IS CONSTRUCTED 18 STATISTICAL ASSESSMENT: INTERNAL CONSISTENCY 18 NORMALISATION 18 AGGREGATION ACROSS COMPONENTS AND DIMENSIONS 18 REGIONAL SCORES ANCHORED TO NATIONAL ONES 19 A NETWORK OF REGIONS 20 FINAL REMARKS 21 APPENDIX A: ADDITIONAL MATERIAL 23 REFERENCES 26 3 1. WHY WE NEED Ý the World Bank with its framework for measuring sustainable wealth, including ‘the voices of the poor’ COMPARABLE (Lange et al., 2018); METRICS FOR SOCIAL Ý the Organisation for Economic Co-operation and Development’s Better Life Initiative4, and the Territorial PROGRESS Approach to the Sustainable Development Goals (OECD, 2020). The definition of societal progress is not straightforward. It is a complex concept encompassing many aspects that can be From a measurement perspective, various types of proposals interpreted differently by different societies. Over the last have recently arisen embracing the shift from purely economic century, progress has been largely reduced to a single figure: metrics. They include money-denominated databases5, such as the growth of the gross domestic product (GDP). This aggregate the Genuine Progress Indicator (Kubiszewski, 2018) and the monetary measure was first developed in the 1930s as a tool Inclusive Wealth Index (United Nations Environment, 2018), both to assess the policies implemented in the United States to taking into account the expenditure portion of GDP reflecting foster economic recovery after the Great Depression. Simon non-market work and environmental depletion. Other initiatives Kuznets, the main architect of the national accounting system provide indicator scoreboards without combining them into and GDP in the United States, cautioned against equating GDP a single, scalar value. A prominent example is the European Union growth with economic or social well-being. Instead, he warned Social Scoreboard6 which aims to monitor the European Pillar of that: ‘The valuable capacity of the human mind to simplify Social Rights by means of a collection of more than 90 indicators a complex situation in a compact characterization becomes and their time series at the country level. dangerous when not controlled in terms of definitely stated criteria. […] Measurement of national income are subject to this Finally, various examples of aggregate measures include: type of illusion and resulting abuse, especially since they deal with matters that are the centre of conflict of opposing social Ý the Human Development Index (UNDP, 2019); groups where the effectiveness of an argument is often contingent upon oversimplification’ (in Lepenies, 2016, p. 71). Ý the Canadian Index of Wellbeing (CIW, 2016); Despite his warnings, GDP growth became the paramount goal pursued by policymakers all over the world as a means of Ý the World Happiness Index (Helliwell et al., 2020); summarising development and well-being. Ý the Sustainable Economic Development Assessment7; Social aspects only began to be included in the debate from the 1960s, when the need to widen the concept of development Ý the Global Social Progress Index by the Social Progress became evident. However, it was not until the 1990s that the Imperative8 and the European regional Social Progress debate gained momentum with the appearance on the Index, EU-SPI, the focus of this paper. measurement landscape of a serious contender to GDP: the Human Development Index (HDI). The HDI derives from Sen’s So, why do we need comparable metrics for social progress? capability approach (Sen, 1985) and includes simple indicators Because to measure is to know and, if you know, you can of health, education and income (UNDP, 2019). Probably due to compare and help decision-makers. its simplicity, HDI neglects key elements that have become increasingly prominent in recent times, especially following the recommendations in the report by the Commission on the Measurement of Economic Performance and Social Progress (Stiglitz, Sen and Fitoussi, 2009). The report stimulated a multitude of initiatives all focusing on replacing and/or complementing GDP. Relevant examples include: Ý the European Commission, with its initiative on ‘GDP and beyond’1, together with various initiatives on sustainable development in the EU (see, for example, Eurostat, 2020); the United Nations (UN) with the Sustainable Development Goals and Agenda 20302; Ý the International Labour Organization with the ‘decent work’ initiative3; 1. https://ec.europa.eu/environment/beyond_gdp/index_en.html 2. https://sdgs.un.org/goals 3. http://www.ilo.org/global/topics/decent-work/lang--en/index.htm 4. http://www.oecdbetterlifeindex.org/ 5. As these measures include components that could be valued in monetary terms, we call them ‘money-denominated’ 6. https://composite-indicators.jrc.ec.europa.eu/social-scoreboard/ 7. https://www.bcg.com/publications/2019/seda-measuring-well-being 8. https://www.socialprogress.org/ THE REGIONAL DIMENSION OF SOCIAL PROGRESS IN EUROPE: PRESENTING THE NEW EU SOCIAL PROGRESS INDEX 4 2. THE EU REGIONAL SPI: The EU-SPI uses the same framework as the Global Social Progress Index but is specifically designed for the regions of the AN OVERVIEW EU, at the NUTS211 level. In so doing, it adapts and enhances the indicators used to construct the index which are contextual and The EU-SPI was first published in 2016 by the European uniquely related to regional strategies within the 27 EU Member Commission as the result of a collaborative project with the States. Social Progress Imperative and Orkestra, a research institute on competitiveness in Spain’s Basque region. Here we present the Candidate indicators are selected on the basis of the following 2020 edition of the index. It builds on the definition of social criteria: progress in the global Social Progress Index, published yearly at the country level by the Social Progress Imperative 9: Indicators must: Social progress is the capacity of a society to meet the basic Ý measure outcomes, not inputs; human needs of its citizens, establish the building blocks that allow peoples and communities to enhance and sustain the Ý be relevant and comparable across all the EU regions; quality of their lives, and create the conditions for all individuals to reach their full potential. Ý cover matters that can be addressed by policy intervention, either at the EU or national/local levels; The definition refers to three broad dimensions of social progress: basic human needs, the foundations of well-being, Ý describe social and environmental aspects exclusively (no and opportunity 10. Each dimension is further broken down into economic indicators are included). four underlying components (Figure 1): 1. nutrition and basic medical care, 2. water and sanitation, 3. shelter, and By excluding economic indicators, the EU-SPI represents a direct 4. personal security, in the basic human needs dimension; metric of social progress, rather than an indirect one through 5. access to basic knowledge, 6. access to information and economic proxies, facilitating an analysis of the relationship communication technologies (ICT), 7. health and wellness, and between economic development and social development. 8. environmental quality, included in the foundations of well- Metrics that mix social and economic indicators, such as the being dimension; 9. personal rights, 10. personal freedom and Human Development Index, make it difficult to disentangle choice, 11. tolerance and inclusion, and 12. access to advanced
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