FACT CHECK: Claim Scotland has slid down global well-being rankings

“Alarm as Scotland slides down the global wellbeing rankings … Scotland posted one of the biggest falls among developed countries in the latest index of social and economic well-being” – The Scotsman, January 22, 2020

DOORSTEP ANSWER

THIS so-called “index of well-being” is not an official publication but is the work of a self-employed and self-styled “political economist” called John McLaren. McLaren previously was a special adviser to both Donald Dewar and Henry McLeish and is a staunch Unionist. 

McLaren’s index is poorly constructed, uses too narrow a range of only four benchmarks and draws unwarranted conclusions from tiny movements in the data. In fact, the SNP Government has been pursuing a national well-being strategy which benchmarks 81 national indicators.

BACKGROUND

THE index of well-being is produced and self-published by Scottish economist John McLaren. McLaren was a civil servant at both HM Treasury (1985-1988) and at the Scottish Office (1989-1998). 
He then worked full-time for the Labour Party in the campaign leading up to the first election of the new Scottish Parliament in 1999. Subsequently, McLaren was appointed as special adviser to first minister Donald Dewar, and then worked for Henry McLeish (below).

READ MORE: The National launches Unionist rebuttal fact check service

In 2006, McLaren was hired by the Labour Party on a consultancy basis to undertake campaign work leading up to the 2007 Holyrood election. In no sense can he be considered an impartial observer, though he now claims to have no political affiliations. He works as a self-employed economic consultant. It is reasonable to conclude his well-being index is a publicity tool for his consultancy business.

McLAREN MEASURES TOO FEW BENCHMARKS

THE McLaren well-being index is composed of only four measured components: GDP per capita, school attainment at 15 only, life expectancy and employment rate. 

Most officially recognised indices combine far more elements to create a rounded picture. For instance, the well-regarded OECD Better Life Index combines 11 key components: housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety and work-life balance. In addition, in for each individual component, the OECD Index measures a variety of sub-components. This means the OECD measures changes in nearly 30 individual factors. This methodology is far superior to McLaren’s crude four-factor index.

Another respected official study is the regular European Quality of Life Survey, which is published every four years by the European Union. This study tracks 262 factors, not four. In addition, the EU study interviews 37,000 people in 33 European countries in order to add a subjective dimension to its findings. Against this, ranking only four elements is bound to produce minimum results as well as prove artificially volatile. 

If one out of the four measured elements changes, that appears artificially as a major shift. But if you are measuring 262 elements, a shift in one or a few has less impact on the overall rating.

McLaren justifies his basic four benchmarks by saying they are “the most essential”. But surely housing is essential? Surely the environment is essential? McLaren’s choice of benchmarks is crude, unsubstantiated and unscientific.

McLAREN DOES NOT MEASURE ABSOLUTE WELL-BEING

HOW does McLaren calculate his index? First, he measures national scores as changes against the worst and best performers. For example, if life expectancy varies between 76 and 80 for all countries, he takes 76 as a datum and measures who scored above that. 

This means his index is not measuring absolute well-being – which most people would consider the important thing. He is measuring against other countries. So Scotland could have an excellent absolute score but if another country rises faster, then Scotland appears to fall in well-being.

As McLaren himself admits: “While all countries may be doing well and improving over time, some countries have managed to find ways of eking out extra income or extra years of life” – but that is not how it is misrepresented in the Unionist media

McLAREN CHANGES THE DEFINITION OF OECD

THE newspaper reports of McLaren’s index claimed this was a comparison of OECD industrial countries. But a close reading of McLaren’s findings show that he has deliberately removed a number of OECD member states from his study. They are Chile, Israel, Ireland, Latvia, Luxembourg, Mexico and Turkey. His rationale is that “their inclusion overly distorts the results”. For instance, he drops Ireland (surely a relevant comparator with Scotland?) because “the behaviour of multinational companies seriously distorts its GDP per capita”. As a result of this manipulation, McLaren can claim that Scotland has dropped into the “bottom half of OECD nations”. But he has deliberately excluded the lowest-scoring OECD nations to achieve this result.

McLAREN USES A DUBIOUS TIME PERIOD

YOU can read press reports of the McLaren index findings without discovering the time period that the changes cover. All you discover is that Scotland “fell five places”. In fact, McLaren is covering changes between 2006 and 2018. This period is entirely random. It does not start at the top of the last economic cycle, which would be normal methodology. Economies (including Scotland’s) have expanded then contracted in this period.

WHAT WEIGHT TO PUT ON GDP

MCLAREN gives equal weight to each of the four benchmarks. But how valid is that – especially when it comes to including GDP? Is GDP per capita any longer a valid measure of well-being for ordinary individuals? GDP measures a country’s total output, but it does not indicate who gets what. GDP per capita has grown in Scotland and the UK, but since the 2008 recession average wages in real terms have stagnated.

SCOTLAND SCORES HIGH IN OTHER WELL-BEING STUDIES

A CLOSE look at McLaren’s ostensible findings suggests his “index” is less than useful. 

His outcome table shows that Scotland’s score fell by a microscopic 0.05 (out of a possible 4) in the period 2006 to 2018. This is not statistically significant, and McLaren is a good enough economist to know this. We should also note that only three of the 32 countries on his index show ostensible falls in well-being during this long period – the others are Finland and Greece. 

It defies common sense to think rich, communitarian Finland has seen reduced 
well-being between 2006 and 2018, or that events in Scotland mirror the catastrophic economic and social collapse in Greece.
In contrast to the McLaren “index”, Scotland rates high in other, more scientific studies. For instance, the October 2016 EU Regional Social Progress study found that Scotland had the best quality of life among the four home nations.

Unlike McLaren’s work, this study used 50 benchmarks, including health, safety, access to education and personal rights. Scotland scored 74 out of 100. The highest performing region for quality of life was Upper Norrland in Sweden, which scored 82 out of 100 while the lowest-scoring region, south-east Bulgaria, scored 39.72.

The Scottish Government already has a National Performance Framework through which seeks to improve well-being and sustainable and inclusive economic growth. This framework tracks 81 key indicators. There is a regular progress report on the Scottish Government’s website.

FACT-CHECK RATING: FALSE

Data chosen to fit McLaren’s preferred outcome...

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