In general, Eastern European states, including Romania and Albania, were over-achievers when it came to improving well-being more rapidly than GDP, while the Arab Gulf states were particularly poor at translating their considerable natural-resource wealth into better lives for their citizens. The data from Eastern Europe, a region with lively civil societies and strong social safety nets that date back to well before communism, may in essence be rapidly making up for the years lost under Moscow's thumb. In contrast, the Gulf states, as relatively nouveaux riches, still suffer from deep social stratification, longstanding patterns of discrimination, sharp income inequality, and not very impressive levels of educational attainment. Indeed, with a few exceptions (including Norway, of course), natural-resource wealth often translates poorly into improved well-being for the countries surveyed -- in no small part because many of these countries still suffer from bad governance and high levels of corruption. There is a good reason the "resource curse" remains firmly ensconced in the development lexicon.
The report should be of interest to more than development experts, as it has some serious foreign-policy implications. Take China, for example. For years, China has been held up as a shining example of rapid economic growth, and its GDP has boomed. Yet, like the Gulf states, China has dramatically under-performed relative to its GDP when it comes to delivering improved well-being to its own citizens. Over the last five years, China's GDP growth averaged a phenomenal 12 percent, yet the report finds that its improvements in living standards are consistent with a country averaging just over 5 percent growth annually.
That's a big difference, and it underscores several important points. Widespread corruption continues to bleed China and is helping fuel deep gaps in income inequality. The failure to effectively address corruption also means that China's economic miracle isn't reaching the Chinese population the way it could, and should. That in turn suggests that the Chinese government is going to struggle to meet the rising public demand -- not only for ever more consumer goods -- but for greater freedom of association and more transparent government. With China's annual economic growth already cooling toward the 7-8 percent range, its government may find itself in an extended high-wire routine as it tries to hold power tight while delivering real results to its citizens.
This also suggests that U.S. policymakers need to do a better job of looking past GDP when assessing the relative stability of a country like China, or India for that matter. Traditional foreign policy calculations have hewn tightly to a country's economic and military might, rather than "softer" issues like rights, institutions, governance, and public health. Yet as this study makes clear, well-being may have a lot more to do with realpolitik than most people think. The Soviet Union may well have been an economic and military juggernaut, but Moscow's failure to improve the lives of its citizens ensured that it was an empire built on sand. That is a lesson the United States needs to heed both at home and abroad.