Results: V4 Countries

SOFI V4 and future research possibilities

Piotr Jutkiewicz, Kacper Nosarzewski

v1

Figure 1: SOFI Baseline for the Viesgrad Group. 2014=1

SOFI baseline for the Visegrad group is a mean calculated from the results of particular countries. In order to account for the differences in size, population and GDP of the countries, weighted means were also calculated but since they did not bring substantial differences, a simple mean is presented. The next graph represents all of the countries’ baselines. It can clearly be seen that even though the countries have travelled diverse routes, as a result of common future challenges they have very similar SOFI outlooks for the next 10 years. This shows how important it is for V4 to coordinate efforts and better confront the common challenges which lie ahead.

v2

Figure 2: SOFI Baselines for the Czech Republic, Hungary, Poland and Slovakia, as well as the mean baseline for the whole Visegrad Group.

Our ambition is to continue this project and to develop the SOFI methodology further. Basing on the experiences from calculating the National Comparison SOFIs for the V4 countries, we would like to develop National Focus SOFIs (with a region-specific set of variables), preferably not only for V4 countries, but also for Central-Eastern or entire Europe, in order to be able to maintain comparability between multiple countries.

Apart from the issues mentioned in the chapter describing our methodological approach (like the thousands of fields to be assessed in the TIA method or the linear probability increase), we see some additional challenges, which could be tackled in further research. We list them below for the convenience of the reader and to inspire new projects, synergic to the attempted SOFI calculation.

Firstly, SOFI is an index focused on the speed of development of a given country. This means that a country with a relatively low development level can achieve better values of the index simply because it is easier to develop faster when you’re starting from a lower level. This is not a shortcoming of the index, rather one of its characteristics. However, to make the index more useful, it is worth considering whether the index could be utilised to assess the future levels of development, not only its speed.

Secondly, the weight system, which balances the relative importance of specific variables, could be more advanced. It should take into account the fact that some variables have an optimal value, which means that the aggregate index should be worsened by the values of this variable both lower and higher than this sweet-point. Furthermore, the weights could be adjusted depending on the actual value of the variable in a given country to address the fact that a low value in the case of some variables is a far more dramatic problem than in the others.

Thirdly, the current index mixes all sorts of variables, thus resulting in the possibility to compensate for a very high infant mortality rate with a very high level of internet access in a population. The development of  sub-SOFIs could be considered, with groups of variables either concentrated on specific areas of development or on the more- and less-basic development needs. Such an approach has already been attempted in the Czech Republic, with promising results. The sub-indexes could easily be aggregated to the usual SOFI, at the same time providing valuable insights regarding the progress in various areas.

Such improvements could make the SOFI index an even more applicable and attractive proposition in times when GDP is no longer considered the magic-bullet indicator (http://www.oecdobserver.org/news/archivestory.php/aid/1518/) and different development indexes contribute to a better picture of development in the World (like the UNDP Human Development Index and Australian Bureau of Statistics Socio-Economic Indexes for Areas referred to as SEIFA). Experimentation in this field is encouraged both to inspire critical analyses of policies optimized for the existing indexes and to avoid over-confidence in measures that do not capture the complexity of development to the satisfactory extent.

Today and in the future, GDP is a beacon, but it is not the only one. The widespread use of SOFI could add very valuable new insights which could help both V4 countries and other nations all around the world to better track their progress and identify possibilities and threats influencing their future well-being.