Kozminski University Index of Balanced Economic and Social Development ("IBESD") for Poland

The paper presents a new Index of Balanced Economic and Social Development (“IBESD”), designed to evaluate Polish economy and society, with an emphasis on human conditions. “IBESD” is constructed in  “beyond GDP” paradigm, on widely accepted assumption that traditional measures, such as GDP, are insufficient to evaluate socio-economic development. “IBESD” covers four domains: internal (national) economic, external (international) economic, internal (“micro” or subjective) social, and external (“macro”  or objective) social. Each of them is measured as an aggregation of several simple indicators. All four medium level indexes of four domains show almost parallel changes, so they can be aggregated into a general “IBESD” index. All of them, “IBESD” included, describe very well changes in Polish economy and society during 2000-2011. Their trends may be explained by general knowledge of economic cycles in Poland and they are surprisingly highly correlated with the ultimate measure of human conditions, operationalized as an aggregation of psychological well-being (state of mind and emotions) and suicide indicators. Economic and social components of “IBESD” show the same pattern of changes, with a slight delay and greater amplitude of social changes. That indicates  “leading” role of economic aspects in relation to social ones and great sensitivity of social indicators to economic ones.  As far as social aspects are concerned, the trend of subjective evaluations of current conditions repeats, with small delay, the “leading” trend of  expectations for future social conditions. This delay does not appear, however, during the present economic crisis, when predictions and evaluations similarly react to dramatized economic news. “IBESD” was designed in a theoretical context of balanced development. Its application confirms the theory that rapid development is associated with diminishing balance between its different domains.