The Wealth of Nations Index

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Some economists claim: “The Gross Domestic Product that sums up the value of goods and services produced in a given country in a given year”. Others – and increasingly often so – say on the other hand: “GDP is an imperfect measure that tells us little about the real wealth of an ordinary citizen”. The wealth of a German differs from that of a Pole in more ways than just how much money there is in their wallets. What does matter is not only what houses we live in or what kind of car we drive, but also whether it is clean air that we breathe, whether we feel safe or whether we can count on good education.
Therefore, we decided to create our own measure: Wskaźnik Bogactwa Narodów, i.e., the Wealth of Nations Index (WNI). As the Polish economist Karol Zdybel explains, “It tries to measure the stream of economic benefits per one citizen of each European Union member state over the course of a year”. Our index takes into account the level of both private and public expenditure in the economy. We assume that private expenditure, dependent on sovereignly decided by citizens, is optimal. The government would fail to spend that money in a better way. On the other hand, we evaluate public expenditure in terms of its quality, not nominal value, assuming that ‘more’ does not necessarily translate into ‘better’. We shaped our index in such a way as to free it from any and all accusations of “bias” on the private sector. We granted a sort of a head start to government spending, described in detail in the chapter on methodology.

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