The US economy was just ranked the world's most competitive, but a closer look at the country's 'weakening social fabric' could spell trouble for the future
- The World Economic Forum recently released its annual Global Competitiveness Report, which ranks countries based on several metrics relating to economic growth and social stability.
- While the United States was ranked as the top country for overall economic competitiveness, the report included some troubling warnings about certain aspects of American society it calls "social capital."
- The social capital variables include voter turnout in recent elections, and attitudes about civic trust and social solidarity.
The United States has an incredibly vibrant and productive economy, but there could be trouble looming.
The World Economic Forum recently released its annual Global Competitiveness Report, which ranks countries based on several metrics relating to economic growth and social stability. Those metrics are evaluated on a score from 0 to 100 for each country, with 100 representing the ideal "frontier" for a hypothetical country performing as well as possible on that metric.
While the United States came out as the top country overall for economic competitiveness, the report included some warnings about certain aspects of American society.
The WEF wrote [emphasis ours],
"Although the country's institutional framework remains very conducive (74.6, 13th), there are indications of a weakening social fabric (63.3, down from 65.5) and worsening security situation (79.1, 56th) - the United States has a homicide rate five times the average for advanced economies - as well as relatively low checks and balances (76.3, 40th), judicial independence (79.0, 15th), and transparency (75.0, 16th)."
The social capital metric used by the WEF is described in the report as assessing "social cohesion and engagement, community and family networks, and political participation and institutional trust."
Specifically, the WEF based their social fabric metric on the social capital pillar from the Legatum Prosperity Index. Legatum's description of their methodology lists the variables used in their social capital pillar. The variables include voter turnout in recent elections, along with several survey questions about civic trust and social solidarity, like "Do you have confidence in the local police force?" and "Have you donated to charity in the past month?"
A decline in the kind of social health and engagement measured by those questions could naturally lead to concerns about the long-term political and business environment in the country.
The WEF also noted that access to healthcare in the US continues to fall behind the country's peers. The authors of the report wrote, "The country also lags behind most advanced economies on the Health pillar - a consequence of the country's unequal access to healthcare and broader socio-economic disparities."
While the US remains at the forefront of economic competitiveness, the issues raised by the WEF could lead to problems in the future.