The 'Bad Behavior Index': A Composite Measure of the Development Hindering Behavior of Individuals and Institutions

Abstract

Composite indices have become a popular tool for providing a quantitative, simplified, and visualized representation of complex phenomena. An example of such is the Human Development Index (HDI) which ranks countries by their level of development. The primary limitation of the HDI is its narrow scope, which hinders its effectiveness at explaining why some nations are more developed than others. The discussion as to why some nations are more developed than others goes back as far as the 14th century, where Ibn Khaldun developed a theory which aims to explain why civilizations rise and fall. Some of the hypotheses which seek to answer this question point to the importance of economic freedoms, absence of corruption, high investment in human capital, and the importance of institutions etc. to development. One hypothesis which has not been properly studied regards the culpability of individual and institutional behavior. The purpose of this study is to introduce a composite measure of the development hindering behavior of individuals and institutions, i.e., the Bad Behavior Index (BBI). The methodology of this study is influenced by the Mazziotta & Pareto framework for composite indices. The index weights have been computed by integrating expert opinion with the Fuzzy Analytic Hierarchy Process (FAHP). The findings of this study suggest that African countries engage in the highest level of bad behavior, which subsequently leads to their poor socio-economic development, whereas Northern countries engage in the least level of bad behavior. The study also finds that the most important drivers for socio-economic development are low levels of corruption, high levels of knowledge creation, strict application of the rule of law, high levels of social cohesion, and high levels of political stability.