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Our mania for measuring (& re-measuring) well-being

Posted date: 
Tue, 09/17/2013
Source of the information: 
The Hindu Business Line

Nobel Prize-winning economist Joseph E. Stiglitz found himself stumped. Last February, speaking by video link to the Scottish Parliament’s economy committee, Stiglitz was asked by a lawmaker what he thought of the Legatum Prosperity Index. “I’m not sure I know the details,” replied the baffled Columbia University professor. “There are a lot of indices out there.”  

Indeed. While I might have wished that Stiglitz knew about that particular one (I’m the President of the Legatum Institute, which publishes the Prosperity Index — and he knows about it now!), it’s a fact that recent years have brought an avalanche of indices for measuring the relative strengths of nations and their progress (or decline) over time. This is important not only for economists who care about development but also for executives who head globalising firms. As someone who has spent an inordinate amount of time studying these indices and the methodologies behind their conflicting rankings, I offer four things to keep in mind.  (...)