The Warsaw Enterprise Institute has published the 4th edition of the Wealth of Nations Index, a unique Index that, in addition to GDP, also measures the quality of public spending. Countries belonging to the European Union and the OECD are taken into account. The podium places are occupied by Ireland, Switzerland and Norway, which managed to overtake the United States this year. Poland is only in 27th place out of 38 economies and 18th place in the EU. This is a decent result, but not satisfactory.
Usually, when we talk about the development of countries, we focus on the Gross National Product. Those who are not satisfied with this and believe that development is not only growth, point to other indices, such as the Human Development Index or The World Happiness Report. The index developed for the Warsaw Enterprise Institute by economist Karol Zdybel presents a broad understanding of the concept of development. On the one hand, attention is paid to the dynamics of private spending per capita, on the other to the quality of public spending in 8 categories (defense, security, infrastructure, higher education, health care, environment), and it is also examined through the level of freedom of assembly, which is a litmus test of democracy. The assessment of the quality of public spending is the result of a synthesis of the results of available component indices, e.g. the Legatum Prosperity Index or the Global Peace Index.
This year’s WBN presents a post-crisis crisis situation – the socio-economic problems related to the coronavirus epidemic have been replaced by a peri-war crisis since 2022. Here are the main results:
- The world is still poorer than before the pandemic. Most of the countries surveyed recorded an increase in the NBI indicator compared to the previous year, when they were just emerging from the bottom of the COVID-19 epidemic, but they failed to significantly exceed the results for 2019.
- Ireland wins, and the USA loses the podium to Norway, mainly due to a drop in the subcategory concerning the quality of public spending in America (by as much as 9 places!).
- Lack of dynamism. None of the countries listed have made a big leap forward. Germany is at a standstill (8). The biggest drop was noted by France – from position 16 to 19, and the biggest increase was noted by Israel – from position 23 to 20.
- Bulgaria fares worst among the EU countries – it ranks 35th.
- Poland maintains 27th position compared to the previous edition of WBN. When excluding non-EU economies, Poland is in 18th position in the overall ranking.
- In Poland, we take better care of defense than infrastructure. In the subcategory of defense spending, Poland moved up 9 spots to 16th place, but in infrastructure spending it dropped 4 spots to 33rd place.
- We treat public money with moderate respect. The efficiency of using public money in Poland does not differ from the average for all the countries studied.
May 1 marked 20 years since Poland joined the European Union. If effective reforms had been carried out early enough in spending areas such as education and health, consisting of decentralization and the introduction of a competition mechanism, we would have been higher in the ranking. We are currently at a key moment in history, which paradoxically opens up opportunities for Poland to make up for neglect and advance to the WBN. Crises on various levels are piling up and intersecting – from demography to the security of trade. At the same time, the experience of the pandemic and war has made societies realize that the lack of bold reforms has made them fragile and devoid of resilience. A bold reformer will not encounter as much social resistance as he would encounter in times of relative prosperity.
The Wealth of Nations Index website is available HERE.
Source: Warsaw Enterprise Institute