The curious case of Costa Rica: What makes it unique?

By Anand Kulkarni

As the festive season draws closer, aspirations for a happy 2017, beaches, wildlife and entertainment beckon. Except for ardent tourists, unheralded Costa Rica, a middle-upper income country may not be a preferred destination. However, a closer look will reveal that Costa Rica, for the third time is ranked number 1 in the world out of 140 countries on the Happy Planet Index. Interestingly, Mexico and Columbia are 2nd and 3rd in the world. This says something very positive about that part of the world.

So what drives Costa Rica as the world’s most blissful nation? Is it, in fact, its unspoilt beauty or can we dig a bit deeper?

The Happy Planet Index measures countries according to four criteria: life expectancy, well-being (polling of people to gauge their satisfaction), inequality of outcomes (a measure based on the first two criteria), and ecological footprint.

Unique features of Costa Rica

There are a few very interesting and telling features which may be related. Firstly, Costa Rica has no military at all. These resources can be deployed elsewhere to education and health among other things. Furthermore, it indicates that maintaining good relations with other countries can contribute to overall societal well-being.

Secondly, as the New Economics Foundation (which produces the Happy Planet Index) points out, Costa Rica is characterised by very tight personal networks and support amongst family, friends and neighbourhoods. This extensive and intensive social capital plays a key role in a cohesive society. Incidentally, one cannot rule out the possibility that a small population could be a key driver of harmony. Although smaller populations can lack the diversity and melting pot of multiple, vibrant communities.

For the third time, Costa Rica is ranked number 1 in the world out of 140 countries on the Happy Planet Index. | Photo Courtesy: Visualhunt

Thirdly, Costa Rica has an enviable performance and commitment in the environmental arena. 99% of its energy comes from renewable sources. It is committed to becoming carbon neutral by 2021. This again points towards an alignment between contributing to a better global environmental outcome and national satisfaction.

Of course, indices such as these are highly subjective. As a quick critique, such factors as volunteering and philanthropy, health care, access to basic infrastructure and the like are not part of the index. However, the fact that Costa Rica leads the world in life expectancy (more than 79 years of age) suggests that its health infrastructure must be in good order.

Global innovation indices

If we look at other indices relating to Costa Rica, then there are some interesting patterns as well.

Data from the Global Innovation Index suggests that there is nothing particularly special about Costa Rica. Its performance on key parameters of research and Higher Education placed it in the “middling” or even lower category.

Yet there are tell-tale signals which align with notions of happiness. The Global Innovation Index shows that Costa Rica is number 14 on “e-participation”. This, despite being weaker in the rankings on ICT usage and access. Further, and despite its image as an exotic tourist spot, Costa Rica has a strong performance in certain economic segments. Surprisingly, Costa Rica is ranked number 1 in the world for ICT services exports as well as cultural and creative services exports.

[su_pullquote align=”left”]Costa Rica is ranked number 1 in the world for ICT services exports as well as cultural and creative services exports. [/su_pullquote]

All of this adds to national wealth and prosperity and while not the “be all and end all” of happiness must come into the equation somewhere.

Despite not being stellar in the traditional domains and metrics of training and research, there seems to be a strong entrepreneurial orientation and a “can do” attitude. This suggests a country, possibly because of its small size, is open to ideas and know-how from elsewhere, which it effectively melds with its own.

Not all is perfect

Before people start lining up to migrate there, there are some cautioning words. According to the World Economic Forum in its Global Competitiveness Ranking for 2016-2017, onerous tax rates, wasteful Government spending and overall macro policy settings are downers. Interestingly, the World Economic Forum also finds that Costa Rica is 62^nd in the world out of 138 countries on corruption. Surely, corruption would be the antithesis of a happy country? Or is it that people take corruption in their stride, or even worse, consider it just part and parcel of “normal” functions of society. Maybe it is simply that cross-tabulating results from different indices do not really work.

Whatever the reason, there is certainly food for thought in the case of Costa Rica.

---

Dr Anand Kulkarni is a Consultant and Principal Adviser Victoria University, Melbourne. He is also a Fellow at the Centre for Policy Development.

Featured Image Credits: Ironman

Bibliography:

•  Cornell University, INSEAD and WIPO: Global Innovation Index 2016.

• New Economics Foundation: Happy Planet Index 2016 Global Index of Sustainable Well-Being.

• World Economic Forum: Global Competitiveness Report 2016-2017.

[su_note note_color=”#d2eaf6″]Fresh insights delivered to your phone each morning. Download our Android App today![/su_note]