Hanke’s Annual Misery Index: The World’s Saddest (And Happiest) Countries

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.


The human condition inhabits a vast continuum between "miserable" and "happy." In the sphere of economics, misery tends to flow from high inflation, steep borrowing costs and unemployment. The most surefire way to mitigate that misery: economic growth. All else equal, happiness tends to blossom when growth is strong, inflation and interest rates low, and jobs plentiful.


Many countries measure and report these economic metrics on a regular basis. Comparing them, nation by nation, can tell us a lot about where in the world people are sad or happy.


Would you consider the United States to be more or less miserable than other countries? To answer this question, I update my annual Misery Index measurements.


The first Misery Index was constructed by economist Art Okun in the 1960s as a way to provide President Lyndon Johnson with an easily digestible snapshot of the economy. That original Misery Index was just a simple sum of a nation’s annual inflation rate and its unemployment rate. The Index has been modified several times, first by Robert Barro of Harvard and then by myself.


My modified Misery Index is the sum of the unemployment, inflation, and bank lending rates, minus the percentage change in real GDP per capita. Higher readings on the first three elements are “bad” and make people more miserable. These are offset by a “good” (GDP per capita growth), which is subtracted from the sum of the “bads.” A higher Misery Index score reflects a higher level of “misery,” and it’s a simple enough metric that a busy president, without time for extensive economic briefings, can understand at a glance.


In the accompanying gallery, you can find Misery Index rankings for the 98 nations that report relevant data on a timely basis. For consistency and comparability, all data come from the Economist Intelligence Unit.


Let’s start with the most miserable country and work toward the happiest. Flip it around and you have a Happiness Index.


Venezuela holds the inglorious tile of the most miserable country in 2017, as it did in both 2016 and 2015. The failures of President Nicolas Maduro's socialist, corrupt petroleum state have been well documented over the past year, including by my measurements of Venezuela’s hyperinflation. Not only is Venezuela the most miserable country in the world, but its Misery Index score has dramatically increased since 2016.


Syria holds down the rank of second most miserable, and the reason isn’t hard to uncover. Indeed, Syria has now been in the grip of a brutal civil war for almost seven years. Need I say more?


Brazil remains in the number three spot for the second year in a row. As my close friend—the famous Brazilian economist, diplomat and politician, the late Roberto Campos—once explained to me during a visit to Brazília: the Brazilian Constitution is as thick as the New York City telephone book and is full of little more than rights and entitlements. President Temer has attempted to turn back the tide of government obligations. But, to date, his attempts to rein in the country’s biggest unfunded liability—the pension system—have come to naught. The bankrupt pension system is, of course, not the only problem facing Brazil. Corruption, for example, remains an endemic problem.


Argentina has improved its ranking (and index score) in 2017, moving from second to fourth most miserable country in the world. But, until inflation is wrestled to the ground, President Macri will struggle—as President Menem did until April 1, 1991, when he introduced Argentina’s Convertibility System, which linked the peso to the greenback.


Egypt ranked fifth most miserable, a notch lower than in 2016. But, Egypt’s Misery Index score actually increased—a bad sign. President el-Sissi’s military-socialist rule continues to deliver misery. In addition to the problems that accompany any socialist-type system in which the military plays a decisive role, the Egyptian pound remains the country’s Achilles’ heel. The only solution to this problem is the adoption of a currency board, in which the pound would become a clone of an anchor currency, such as the euro or U.S. dollar.


Let’s move to the other end of the table—the end where the least miserable countries reside. It is there that we find China ruling the roost as the world’s “happiest” country. Chairman Xi has some bragging rights here, and in the World’s soft power sphere, these are valuable.


Now for the United States, its Misery Index score has improved a bit, moving from 9.4 in 2016 to 8.2 in 2017. Yet, as far as happiness is concerned, it is not America first but America thirtieth—trailing behind 29 other countries on the happiness train.


This piece was originally published on Forbes


BarkingCat Thu, 03/08/2018 - 16:28 Permalink

Stupid way to rank misery. You can be poor and happy.

Also, even in the current state of affairs I would much rather be in Venezuela then in Somalia.

BarkingCat New_Meat Thu, 03/08/2018 - 18:49 Permalink

I did not say I wanted to go to either place.

What my point was,  that Venezuela is listed as the most miserable country on the planet.

Of the top of my head I picked a single country that is even worst..

If you want a more nuanced example I could pick from the middle.

Sweden is rated as less miserable than Lithuania. 

Give me a choice between these 2 countries and I am heading to Lithuania.

They weren't idiotic enough to flood their country with 3rd world trash. Sweden has no go zones because 20% is not even European.  Yeah, really happy place.


In reply to by New_Meat

New_Meat BarkingCat Thu, 03/08/2018 - 20:09 Permalink

I'm saying that in within the ranking that Hanke has, no one can differentiate and that it doesn't matter between venezuela (where everyone is starving but might get some clean water) and somalia (nyet).  Don't know which country is most worstest.  I'm mostly indifferent personally.

I'd go to Lithuania, especially if I could bring potato seeds and other seeds.  Sverge? not so much.  Not anymore.

- Ned

In reply to by BarkingCat

ThirdWorldDude Theosebes Goodfellow Fri, 03/09/2018 - 01:46 Permalink

It's a well known fact that post-modern academia prostitutes excell at applying the golden rule: he who funds the research makes the rules.




Now think about it; if they can cherry-pick facts and conclusions in natural sciences (according to the Newtonian principle shit in - shit out), how hard is it to massage and spin research studies within so called social "sciences"?

In reply to by Theosebes Goodfellow

Bay of Pigs Thu, 03/08/2018 - 16:57 Permalink

"Venezuela holds the inglorious tile of the most miserable country in 2017, as it did in both 2016 and 2015. The failures of President Nicolas Maduro's socialist, corrupt petroleum state have been well documented over the past year, including by my measurements of Venezuela’s hyperinflation. Not only is Venezuela the most miserable country in the world, but its Misery Index score has dramatically increased since 2016"

Mr. Hanke, you owe ZH, the Tyler's and the posters here an apology and retraction of your previous work. Am I the only who clearly remembers him bashing all of us here about "hyperinflation" in Venezuela well before he acknowledged it and changed his view?

Benjamin123 Bay of Pigs Sat, 03/10/2018 - 08:54 Permalink

So Tyler was warning of hyperiflation while Hanke said no, only 74% inflation, and he was wrong?

Fair enough. I dont know exactly how you measure this stuff with any pretensions of accuracy over the short term, given how the rates of inflation themselves are not stable. My family tells me that food prices are relatively stable in dollar prices, neither cheap nor extremely expensive. Basically they track the dollar exchange, but there can be some delays, gouging, etc. Housing appears to be getting seriously cheap, as if owners have collectively realized they live in a shithole and cannot demand Miami or Madrid prices in Caracas.

The exchange rate appears to have settled at 230000 Bs/USD for a few weeks already, it was around 4000 Bs/USD a year ago.

This table shows the historical rate.


Long term behavior>4.3 Bs/USD in 1973 (old bolivars). 230.000 Bs/USD 2018 (new bolivars=1000 Old bolivars)

Average 49% annual inflation for the past 44 years.

In reply to by Bay of Pigs

Captain Nemo d… Thu, 03/08/2018 - 21:29 Permalink

MSM has been lying to everyone about what is going on in the world. I am very happy to learn that in most places which are in the news for all the wrong reasons, where there would appear to be plenty of really depressing reasons to be outright miserable, the pressing problems are lending rates and, to an extent, unemployment.

Dogspurt Fri, 03/09/2018 - 02:10 Permalink

I'm surprised how highly the United Kingdom scored, given that for an increasing number of its citizens, life is becoming increasingly hard.