Thomas Hardy might have resigned to pessimism when he had said: “Happiness is but an occasional episode in a general drama of pain.” However, modern-day economists have been making painstaking efforts to find out what causes ‘misery’ and ‘unhappiness’.
Hanke, professor of Applied Economics at Johns Hopkins University, Baltimore, Maryland, had been the advisor to several world leaders, such as Ronald Reagan, Suharto of Indonesia, and the President of Bulgaria.
“The surefire way to mitigate the misery is through economic growth. Comparing countries’ metrics can tell us a lot about where in the world people are sad or happy,” said Hanke.
Zimbabwe has snagged the first-place slot with inflation — or, “economic mismanagement,” as the contributing factor to residents’ unhappiness. According to the index, Zimbabwe experienced a skyrocketing inflation rate of 243.8 per cent in 2022. Venezuela has the second highest misery index score of any country on the planet.
Switzerland has emerged as the ‘least miserable country’ in the world. “It’s hard to beat a democracy in which most major decisions can, if enough of the electorate insists, be put to a popular vote,” said Hanke.
The second-happiest country is Kuwait, followed by Ireland, Japan, Malaysia, Taiwan, Niger, Thailand, Togo and Malta.
The US is among the least miserable countries with a rank of 134.
India has ranked 103rd. The country has fared better than countries like Brazil (rank 27), Pakistan (rank 35), Nepal (rank 63) and Sweden (rank 88).
Australia ranks 116 (Misery index 20.107% with unemployment being the major contributing factor). New Zealand’s ranking stands at 104.
While Finland has ranked 109th, it has historically reigned as the “world’s happiest country.”
The rankings are calculated using the sum of inflation, unemployment (multiplied by two), bank-lending rates, minus the annual percentage change in real gross domestic per capita.
Arthur Okun, a renowned economist who had served as chairman of the Council of Economic Advisers during President Lyndon B.Johnson’s tenure (1963-1969), had developed the original ‘misery index’ for the US in the 1970s. His objective was to find a way to measure the overall well-being of the Americans. Okun believed that unemployment and inflation rate were the most important factors that affected people’s lives.
Later, Harvard Professor Robert Barro created what he had dubbed as the Barrow Misery Index (BMI) in 1999. He had modified the index by adding bank’s lending rate of interest. However, Prof Hanke had amended Barro’s version of the ‘misery index’ by replacing the output gap with the growth rate of real GDP per capita and replacing the 30-year government bond yield with lending rates. After all, higher lending rates mean more expensive credit, and more borrowers’ misery.
Prof Hanke’s latest misery index doubles the unemployment rate and the data is created on that basis.
One reason for Switzerland’s ranking, Prof Hanke says, is the Swiss debt brake. The debt brake has worked like a charm for the country. Unlike most countries, Switzerland’s debt-to-GDP ratio has been on a downward trend in the last two decades, since it has enshrined its debt brake into its constitution in a 2002 national referendum.
The misery index of Zimbabwe counts 414.7 due to high inflation. The major challenge faced by the country is due to its government ZANU-PF. Prof Hanke states in his blog: “Indeed, ZANU-PF operates more like a political mafia than a political party. Its policies have resulted in massive misery.”He has been tracking Zimbabwe’s economy since 2008 when Robert Mugabe was President.
Zimbabwe, Venezuela, Syria, Lebanon, Sudan, Argentina, Yemen, Ukraine, Cuba, Turkey, Sri Lanka, Haiti, Angola, Tonga, and Ghana comprise the 15 most miserable countries in the world, according to HAMI.