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“Fairest and Best”: A better way to rank national economies
Sean Burke, February 2021 Some decades ago, when the author was young, he received a trophy for “fairest and best” player on his football team. Trophies were then and still are given for fairest and best rather than just “best” player, so that players will be encouraged to be “fair.” In sport, it is a formula that has stood the test of time. An attempt is made here to create a snapshot continuum Index of “fairest and best” economies, those which do well (on average per capita), but which moreover do well in sharing their fortune amongst their own citizens. This is a first attempt and can only be considered a crude measure. Nevertheless, it is arguably already more meaningful than simply comparing countries by looking at raw per capita GDP figures, even adjusted for purchasing power, as an average GDP figure says little about the likelihood of an individual in any country having a fair share of the pie. It is, by itself, an “insufficient measure” Average wealth or income might be a meaningless statistic in a nation where the sharing of that wealth or income is largely impaired. A new definition of wealth itself will require addressing questions of fairness and distribution. Sharing v Selfish economies: The FAB index In order to answer this question, a large number of economies need to be compared. The author has here constructed the Earthside Fairest and Best Economies Index (The “FAB” Index) for this purpose. “Best” is included; the vigour of an economy needs to be considered in any survey of fairness, sharing or equality, as very poor economies will suffer from various conditions that make it impossible to compare them with rich economies, such as colonial and ongoing multinational exploitation, an ongoing brain drain and the continual emigration of elites and their personal wealth. The FAB index takes the international rank of economies by GDP (per capita PPP adjusted) multiplied by the rank of economies on the Income equality index, and further multiplied by the rank of economies on the Wealth equality index. [FAB Index rank = GDP rank x Wealth equality rank x Income equality rank]. The lower the resultant score, the higher the placing on the FAB index. It is important to use both income and wealth measures as while some countries rank similarly on these indices, such as Portugal and Panama, many do not, and some countries have widely disparate standings, such as Norway, which is eighth for income equality, yet 150th for wealth equality. The FAB ranking thus puts fairness first, while still requiring sufficiently good standing in the “best” area in order for a country to qualify. Arguably, of the top 50 FAB economies, we might say that the top ten are less selfish, and more equal and sharing economies, than those ranked 41-50. Choice of constituent indices For the Gross Domestic Product per capita adjusted for Purchasing Power, the International Monetary Fund ranking was used (IMF, 2020). In some cases, such as tax havens, other measures like GDI need to be used to assess relative rank of average wealth. This has been done here for Ireland, but could be applied to others, such as Panama. The World Bank GINI index was used to rank income equality (World Bank, 2018, 2020). The Credit Suisse Research Institute Global wealth Databook 2019 was used to rank wealth equality (Credit Suisse, 2019). Most English-speaking nations are in the bottom half. The Nordic countries find themselves in the top half, but not leading due to their poorer wealth equality rankings. A lot in this field depends on the choices made about which economies to include. Arguments can be made, for example, for the exclusion of countries that have a high proportion of expat workers (Qatar), or of countries that are basically places to park wealth (Panama). In this schema, all countries have been included, with an adjustment for Ireland, as that country has itself decided to report a GDI (income) figure instead of GDP, as the large internet companies resident there for tax reasons (Google, Apple, others) otherwise distort their placing. Using GDI, Ireland place about 15th, with Germany, rather than third. It is important to note that the formula used (GDP x wealth equality x income equality) does not give anything except an indication of how well a country shares its average economic good fortune with its own citizens. Then there is the question of how many countries to include, given average GDP and overall wealth levels. As discussed above, many poorer countries experience a drain of wealth and cannot easily be compared to those better off. For this reason, the FAB scale only treats the first 50 countries by per capita GDP. The focus is on comparisons of the fairness within and between relatively wealthy (average per capita) economies. For this reason, many large and important economies like China, Brasil, Indonesia and Russia are not included, as their per capita GDP is too low. It is salient to note that extending the FAB index to cover the top 100 countries by GDP would capture this group, but would not alter the top three places, and might not alter the bottom grouping either. For the purposes of this paper, the top fifty are therefore sufficient. The fairest and best economies are Slovakia, Belgium and Slovenia, in that order. Slovakia was an eastern bloc nation which has experienced high GDP growth in recent years (World Bank, 2019). Belgium and Slovenia both rank highly in gender equality (IEGE, 2021), so their position should not be a surprise. Questions are raised about the different results for what might seem, on the surface, economically and culturally similar countries, such as Australia and New Zealand, Hong Kong and Macau, and Qatar and Saudi Arabia. These are interesting but beyond the scope of this paper. Feedback is welcomed as this measure may be refined over time. |
Table:
Country Rankings on the Earthside FAIREST AND BEST ECONOMIES INDEX (“FAB” Index), showing constituent rankings {includes only top 50 countries by per capita GDP} 
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