The Relationship between Social Progress and Economic Growth: Assessing Countries’ Effectiveness in Translating Growth into Social Progress

Numerous studies have highlighted the positive, and at times bidirectional, relationship between human development and economic growth. However, limited attention has been paid to the efficiency with which economic development translates into social outcomes. In the context of global development initiatives such as the Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs), the significance of human development has become increasingly pronounced in recent decades. This study investigates the association between economic development and social outcomes across diverse income levels and regions, employing efficiency analysis as its analytical framework. Utilizing comprehensive data spanning from 1990 to 2020 and conducting a global analysis, we study the trends in selected economic and social indicators. Our analysis employs two main methods: residual-based and ratio-based efficiency approaches, offering multifaceted insights into countries' efficiency. Through comparative analysis of the two methods and examination of trends over three decades, our findings shed light on the broader picture of economic and social disparities and efficiency levels among nations. Furthermore, our results suggest that residual-based analysis emerges as a preferable method for evaluating efficiency, particularly in the context of high-income and socially developed countries. This study highlights important implications. Firstly, it underscores the nuanced nature of efficiency, revealing that irrespective of a country’s economic level and social development, there is always room for progress. Moreover, when conducting a global analysis, comparability should be considered according to countries' levels of development.