Sunday 20 July 2014

Which large Western country is the most generous?

In this post, I attempt to gauge which of ten large Western countries (Australia, Canada, France, Germany, Italy, Netherlands, Spain, Sweden, UK, US) tends to be the most generous. The admittedly crude analysis is based on six metrics: public social expenditure as a share of GDP, private social expenditure as a share of GDP, foreign aid as a share of GNI, charitable giving as a share of GDP, volunteering as a share of GDP, and World Giving Index score; data from the latest available year are used in all cases except pubic social expenditure (for the sake of consistency with private social expenditure).

The table below displays the results; units, sources and years are given in the final three rows. The seventh column shows each country's rank on the mean value over the five metrics (which were standardised prior to averaging). It indicates that, overall, the most generous countries among those examined here are: the Netherlands in 1st place, the United States in 2nd place, and Sweden in 3rd place. The United Kingdom and Canada finish in 4th and 5th place, respectively.


A number of caveats are in order. First, several of the metrics are given relative to the size of a country's economy, which downplays the absolute generosity of the richest countries, notably the United States. Second, due to the nature of the averaging, public and private social expenditure are underweighted relative to the amount of money they involve, whereas foreign aid and charitable giving are overweighted relative to the amount of money they involve. This downplays the generosity of countries such as France, Italy and Germany. Third, 'generosity' is defined somewhat narrowly. No account is taken of a country's commitment to environmental goals, which downplays the generosity of the Netherlands and Germany. No account is taken of a country's military expenditures, which downplays the generosity of the United Kingdom, France, and particularly the United States. And no account is taken of a country's openness to low-skilled workers or refugees, which downplays the generosity of the United States and Sweden, respectively. Fourth, the large US figure for private social expenditure is partly attributable to the high cost of health insurance, which is predominantly provided through employers.

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