Ranking Countries by Spiritual Capital

Alex Liu, Ph.D. The SPI Team The RM Institute Pasadena, CA, USA Alex@Rminst.org
Copyright 2008 The RM Institute

Our definition of Spiritual Capital

Spiritual capital refers to the power, influence and dispositions created by an organization or a countrys collective spiritual belief, knowledge and practice.

Copyright the RM Institute 2007, 2008

Our operationalization of
the spiritual capital concept

Everyone has some spiritual assets. The materialization and use of spiritual assets is spiritual capital. This type of materialization creates power and advantage that are observable and can be measured. In other words, we can observe spiritual capital from studying its indicators.

Measuring Spiritual Capital

at country level
A composite index approach
Spiritual Capital is a latent variable. Structural Equation Modeling will be used. Spiritual Capital has more than what is covered by religious capital. Our Spiritual Capital measure consists of three sub-measures of (1) spiritual belief, (2) spiritual knowledge and (3) spiritual practice in business. For (1) spiritual belief and (2) spiritual knowledge, we use general indicators including religious freedom. For (3) spiritual practice in business, we use indicators related to business ethics and corporate social responsibilities.

Data sources for

indicators at the country level
World Economic Forum competitiveness index Corruption Index by Transparency International Religious Freedom Index by Freedom House Cross-national religious data by ARDA World Value Survey and datasets on ethical behavior of firms and nations

Data Challenges
For many of our indicators such as that of spiritual knowledge, no data is available. Many of the current available datasets contain wrong and inaccurate information. In other words, we need to estimate spiritual capital from incomplete and inaccurate data. Therefore, we decide only to launch a pilot list for 2008. After publishing this pilot list, we will make effort to collect more data and use more advanced estimation methods to improve our list.

The SCI 2008

Country Argentine Australia Austria Bangladesh Belgium Botswana Brazil Bulgaria Canada Chad Chile China Colombia Denmark Ecuador Egypt Estonia Ethiopia France Georgia Germany Greece SCI 73 83 82 48 76 81 80 73 82 56 81 48 60 84 80 59 89 56 75 67 75 76 Country Guatemala Hungary India Indonesia Ireland Israel Italy Japan Jordan Kazakhstan Kuwait Kyrgyz Rep Latvia Lithuania Macedonia FYR Malaysia Mali Mauritania Mexico Moldova Mongolia SCI 79 87 58 59 91 73 82 80 66 58 59 63 81 82 66 67 79 51 66 67 70 Country Morocco Namibia Nepal Nicaragua Nigeria Pakistan Peru Philippines Portugal Romania Russia Slovak Republic South Africa Spain Sri Lanka Sweden Thailand Turkey Ukraine United States Venezuela Zimbabwe SCI 63 81 54 74 58 48 74 73 83 73 63 67 82 74 59 84 73 60 76 86 73 46

65 countries listed in alphabetical order.

For more, please visit www.rminst.org/sci

The SCI 2008

Country Ireland Estonia Hungary United States Sweden Denmark Portugal Australia South Africa Lithuania Italy Canada Austria Namibia Latvia Chile Botswana Japan Ecuador Brazil Mali Guatemala SCI 91 89 87 86 84 84 83 83 82 82 82 82 82 81 81 81 81 80 80 80 79 79 Country Ukraine Greece Belgium Germany France Spain Peru Nicaragua Venezuela Thailand Romania Philippines Israel Bulgaria Argentine Mongolia Slovak Republic Moldova Malaysia Georgia Mexico Macedonia FYR SCI 76 76 76 75 75 74 74 74 73 73 73 73 73 73 73 70 67 67 67 67 66 66 Country Jordan Russia Morocco Kyrgyz Rep Turkey Colombia Sri Lanka Kuwait Indonesia Egypt Nigeria Kazakhstan India Ethiopia Chad Nepal Mauritania China Pakistan Bangladesh Zimbabwe SCI 66 63 63 63 60 60 59 59 59 59 58 58 58 56 56 54 51 48 48 48 46

Ireland, Estonia, Hungary, United States, Sweden, and Denmark top our list. Zimbabwe, Bangladesh, Pakistan and China have the lowest SPI in our list.

For more, please visit www.rminst.org/sci

Validity of SCI
Our SCI is strongly correlated with AccountAbilitys Responsible competitiveness at 0.70, while less correlated with WEFs global competitiveness at 0.55. SCI is also highly correlated with the religious freedom index of the Freedom House and the corruption index of the Transparency International.

Reliability of SCI
We use the same methodology to construct SCIs for year 2004 and 2006 and found the resulted 2004 & 2006 SCIs are highly correlated with the SCIs in 2008. In other words, our method produces consistent results and is very reliable.

Comments
As this SCI is the first ever published spiritual capital measurement, we understand that there are a lot of areas for us to make improvements and we do welcome suggestions. We will continue to improve our datasets and work to produce a complete country list in 2009, while we plan to complete a SCI ranking of Global 500 corporations by May of 2009. We at the RM Institute believe it takes four capital material capital, intellectual capital, social capital and spiritual capital for a country to achieve optimal and sustainable development. Our preliminary empirical results are confirming this hypothesis. Our results show that spiritual capital index has more impacts on sustainability and democracy, than indices of material capital. Our results also show that difference between the spiritual capital index value and the economic competitiveness value at country level has significant negative impacts on countrys average satisfaction with life. This confirms our hypothesis that the imbalance between spiritual capital and material capital is the main source of personal unhappiness and national crisis.

References
A Liu 2003 Index Correlation, Measurement Reliability and Biased Estimation http://www.researchmethods.org/democracy-indicators.pdf Lawrence M. Miller 2006 Competing in the New Capitalism, Author House Metanexus Institute 2003 Defining Spiritual Capital http://www.spiritualcapitalresearchprogram.com/What_is.asp Wolfgang Ocehl & Oliver Rohn 2006 Ranking of Countries the WEF, IMD, Fraser and Heritage Indices, CESifo DICE Report Danah Zohar & Ian Marshall 2004 Spiritual Capital, Berrett-koehlar Publishing A Liu 2005 Building Structural Equation Models http://www.researchmethods.org/sem

About the RM Institute

The RM Institute is a non-profit organization based in Los Angeles. The RM Institute developed innovative RM4Es and ResearchMap methods, and has provided analytics consultation and training to many well-known organizations such as the IBM and Ingram Micro since 2001. The RM Institute developed the 4Capital framework, and has provided consultation on regional sustainable development and corporate social responsibility in USA and overseas since 2003. More info on the RM Institute can be founded at www.ResearchMethods.org and www.Rminst.org