Is social justice the superior economic growth model? Comparative analysis on G20 countries

Abstract

During 2006 to 2016, a panel link between social justice and economic growth is explored by performing the comparative analysis of G20 countries. The relationship between social justice and economic growth is exhibited as a U-shaped function. Economic growth is a quadratic equation of social justice. In addition, the path of economic growth is developed from “Double low”, “Justice leading” to “Double high”. Through case studies, public policy should serve the more balanced structure of social justice.

Keywords:

• social justice
• inequality
• economic growth
• comparative analysis
• G20

PUBLIC INTEREST STATEMENT

National economic growth is a simple and complex process. When the majority of indicators show a positive increase, we usually think that the national economy has developed. Then, there is a complex relationship behind this growth. There is a relationship between economic, social, political, cultural, and ecological values, including conflict, symbiosis, infiltration, influence, restriction, or mutual causality. This relationship changes dynamically, making it difficult to discern what factors drive economic growth and what value is sacrificed to achieve it. To solve these doubts, we need to extract and contrast a set of concepts. This paper chooses economic growth and social justice to explore the relationship between economic value and non-economic value in the process of national development, so as to try to put forward the economic development policy which can realize the symbiosis of multiple values.

“Inequality, rather than scarcity, is the cause of trouble.”—Confucius

1. Introduction

Globalization has seriously aggravated the economic injustice of the international community, and human society is entering an era in which 1% of the rich control 99% of the wealth (Helpman, 2016). Income inequality under the deduction of time formed the intergenerational transmission of wealth, which aggravated the rigidity of the social class and destroyed the creativity and activity of social value such as social justice, security and stability, wellbeing, social cohesion, and so on. Against the background of the mutual game between globalization and counter-globalization, economic growth and social justice have become more closely linked and more complex and unpredictable (Hillman, 2008; Kauder & Potrafke, 2015). Economic growth can make great effects on both social and individual qualities (Higgins & Campanera, 2011). Models of economic growth have been extensively utilized by global elites to predict and guide social progress. The development of effective and widely applicable models and theoretical tool is most essential. Since the work reported by David Hume, several models have been established by economists to fit the rules of development. Several worldwide economists reach the consensus on the process of gradual reorganization and improvement. The sustainable economy development creates economic conditions, which are the prerequisites of human development (Rastegar et al., 2017). In the prevalent and traditional economic growth models based on above theories, the investment (Harrod–Domar Growth Model), education & human capital (Solow-Swan Model), income distribution (neo Cambridge growth model), industrial structure & technological progress (Endogenous growth theory) are also incorporated in the equation besides of GDP-based economic indicators (Domar, 1946; Harrod, 1939; Romer, 1994; Solow, 1956; Swan, 1956).

The global economic crisis, which began in August 2007, has triggered further reflection by political leaders, think-tanks, the media, and the general public on how social sustainability is measured. The traditional measurement system, dominated by economic development indicators, has been questioned (Greve, 2016; Karabell, 2014). For example, the proportion of economic indicators such as per capita GDP and GNDI in comprehensive indicators has repeatedly declined, and researches on non-economic values have become popular (Zuzanek, 2013).

Some new variables have been considered in a series of modified models of economic growth, such as ecological protection, social structure, wellbeing, political integrity, and economic morals (Bozoklu & Yilanci, 2013; Davis, 2003; Rostow, 1992). Non-economic value indicators and economic growth indicators have formed a situation of competition in the field of quantitative assessment of social development. Therefore, the multi-public value-oriented evaluation system is being constructed and gradually becoming an international consensus, which has a far-reaching impact on countries in the world to explore new models of global governance and formulate reasonable public policies in the social transition period.

After a long evolution of human society, a complex system has been formed, which can be roughly divided into interdependent subsystems such as politics, economy, culture, society, and ecology. For society to develop and progress, more and higher quality public values must be created. However, social justice¹ as the core connotation of a social value is often underestimated in practice.

Social inequality impedes social development as a stumbling factor (Glaser, 2012). Whether it is to improve poverty on a scale or to promote sustainable development, attention to social inequality is indispensable (Ranadive, 1973). The goal of social development is to boost economic growth, reduce disparities, increase wealth and promote common development. The achievement of human development could be evaluated with the concepts of common justice in many fields (Balaceanu et al., 2012).

In the past decades, “social justice” has attracted increasing attentions of public and policymakers (Johnson, 2012; Riccucci, 2009). After the 1968 Minnowbrook Conference, social equity was regarded as a paradigm in governance (Gooden & Portillo, 2011). The “social justice” started to be applied in several public areas, such as distribution policy, personnel, genders, and ethnicities (Gooden, 2015). Finally, in the context of globalization, it has been applied in an increasingly wide range of fields.

Social justice is an important and irreplaceable part of the social economic growth. Based on the theory of new Keynesianism, reforms are aimed to balance income distribution. One of the earliest and evidence-based relationships between social justice and economic growth has been the income inequality. An early study predicted that the inequality would be presented as an inverted U-shaped function in the development process (Kuzenets, 1955). The attention on inequality firstly rose in the nineteenth century and then declined since the second half of the nineteenth century (Williamson, 1985; Williamson & Lindert, 1980). However, Kuznets Curve was reversed in the 1970s, suggesting the end of the historical rules on inequality. The relationship between economic growth and social justice was challenged (Katz et al., 1995; OCDE, 1993). Income inequality has decreased significantly since the twenty-first century, while other economic-related inequalities have been highlighted (Clark, 2011). The economists considered the declined inequality resulted from tax reform, instead of “natural” economic process (Piketty & Saez, 2003). Social justice would be greatly influenced by policies (not limited to the wealth distribution system) under the government power mechanism.

For the relationship between social justice and economic growth, economists and policymakers mainly focus on two critical aspects: one is social welfare; the other is income inequality and wealth distribution (Bryant, 2015; Ebert, 1997; Maynard-Moody & Musheno, 2012; Oldfield, 2003; Slesnick, 1989; Treuhaft & Madland, 2011). In the process of inequality evaluation, economic-induced inequalities have attracted increasing attention (Dalton, 1920; Kerrissey, 2015; Landman & Larizza, 2009; Michel, 1991; Pyatt, 1987; Schluter & Trede, 2002). The tendency of income inequality illustrates the challenge of tradeoff between growth and equity (Baccaro & Pontusson, 2016; Piketty, 2014). The increase in economy requires a compromise of justice. However, economic growth also has a positive impact on justice, and inequality is a critical determinant of growth in the medium term (Ostry et al., 2014). Consequently, it is hard to simply reveal the correlation and causality between social justice and economic growth. Whether traditional assumption was wrong, or shared social system would be better for economy ultimately? Whether the prosperity should be broadly shared? Whether the justice a dominant factor in the higher stage of economic growth? And if so, how the social justice-based growth path would be?

There are mainly three contributions in this study: (1) social justice is a determinant factor to promote economy or/and society advance at present. While, it has been underestimated by mainstream theories of economic growth. Thus, the recessive functions of non-economic factors in economic growth should be reassessed. It is a new attempt to promote public value² (fairness, freedom, democracy, and human rights) in public policies; (2) one frame is established to evaluate perceived fairness. Based on the international consensus, the social justice is generally assessed with six established indicators, which is divided into three dimensions. This frame can also be applied to quantify other immeasurable concepts; (3) the comparative analysis of G20 countries is performed. The functional relationship between social justice and economic growth is elucidated as U-shaped curve. The path of economic growth experiences a change from “Double Low” to “Justice Leading” to “Double high”. When being located at the left of the inflection point of the U-shaped curve, countries would strive for economic growth under a justice-based route through public policies. Although there would be decrease in a short period, a balanced, harmonious and sustainable development would be finally achieved in the long term.

2. Concepts of social justice and economic growth

Since John Rawls pioneered the inquiry into the modern contractarianism of social justice and fairness, the ethical philosophies have been intensively debated as the core issue of the equality. The prevalent theories included Rawls’ “equality of primary goods” (Rawls, 1971), Ronald Dworkin’s “equality of resources” (Dworkin, 2000, 2013) and Amartya Sen’s “equality of basic capabilities” (Sen, 1999). Significantly, the connotation referred in these justice theories was different from each other. In Sen’s report, the original answer to “equality of what” was undetermined (Sen, 1992). Under the premise of wealth equality, the income inequality was unacceptable (Nagel, 1991). While, because of the liberty equality, the pursuit of legal and political treatment would be equitable (Buchanan, 1975; Nozick, 1973). Social justice is such an aggregated fairness of authorized values, including income, well-being, opportunity, freedom, liberty, rights, and needs. Therefore, social justice focuses on the “basic public value of society” with a clear “value orientation”. Similarly, the legitimacy of social justice is also emphasized. Modern theory of social justice is expressed in the form of “maximization principle”, integrating the characteristics of egalitarianism and the method of utilitarianism.

The determinants of the components of social justice were investigated. Hume proposed that public interests was of overwhelmingly important (Spragens, 1993). David Miller (1976) argued three distinctive criteria for social justice—–rights, needs, and desert. In Maslow’s hierarchy of needs theory (Maslow, 1943), human needs were progressive and infinitely upward. Perceptions of both fairness and justice would be raised synchronously with the improved material needs. In order to achieve equal access to social assets and class mobility, the connotation of social equity permeated all aspects of social life. Generally, there were three dimensions in the social equity: (1) justice in rights; (2) justice in property; (3) justice in rules. In short, social justice can be generalized as the equity of rights, property, and rules, which reflected in the dynamic process from survival to development (Table 1).

Table 1. The system of economic growth and social justice indicators

Value goal	Dimension	Indicators	Variable	Characteristics	Source
Economic growth	Economic strength	GDP per capita	Y1	Objective; Positive	World Bank, World Development Indicators
	Economic vitality	Global Competitiveness Index (GCI)	Y2	Objective and Subjective; Positive	World Economic Forum
Social justice	Justice in rights	Human Rights (HR)	X1	Subjective; Negative	The Fund for Peace, Fragile States Index
		Gender Gap Index (GGI)	X2	Objective and Subjective; Positive	World Economic Forum
	Justice in property	Economic Inequity (EI)	X3	Subjective; Negative	Transparency International
		Economic Freedom Index (EFI)	X4	Objective and Subjective; Positive	The Heritage Foundation
	Justice in rules	Corruption Perception Index (CPI)	X5	Subjective; Positive	Transparency International
		Democracy Index (DI)	X6	Subjective; Positive	The Economist Intelligence Unit

Justice in rights Human rights (HR) should be given priority when considering basic justice. HR concentrates on the relationship between individuals and the state, including basic protection of human rights and respect for freedom. Freedom includes several issues: the establishment or protection of civil and political rights (e.g. life security, communal, labor, political, and/or minority rights); the equal access to education, information, and independent medias; the encouragement of sharing political power by authority. Gender equality once has been considered as the widespread discrimination (Akram-Lodhi, 2016; Berik, 2017). The gap between male and female has been examined with gender gap index (GGI) in four fundamental categories: (1) economic participation and opportunity; (2) educational level; (3) health and survival; and (4) political empowerment. Social justice is included in HR indicators and GGI.

Justice in property Distribution inequality has been the most noticeable portion of justice. Economic inequality can be evaluated with economic inequity indicator (EI). Economic status and inequality-based contents, such as ethnicity, religion, and other identities exacerbate community tensions and nationalistic rhetoric, regardless of their economic status. A series of indicators are involved to evaluate the economic inequality, including economic equality gap, discriminatory economics, economic equity, employment practices, social systems, equal rights legislation, economic opportunities, free education, equal education, fair housing, vocational training, vocational training, and socio-economic development. Most of the indicators are evaluated from the individual perspective. The index of economic freedom (EFI) mainly includes four aspects of the economic environment. Government usually makes and implements policies on these aspects: (1) legal rules; (2) government size; (3) regulatory efficiency; and (4) market openness. Whether the authority provides citizens with a fair economic environment is evaluated from the governmental perspective.

Justice in rules The rule justice is a convention on the public rights that pursue the happiness and peace of citizens. Thus, the rule justice should be well coordinated in accordance with governments’ restrictions. Corruption Perception Index (CPI) is involved to quantify perceptions of corruption. CPI assesses the corruption of a public sector and it is obtained by a variety of reputable institutions. “Corruption in the public sector is not just the loss of taxpayers’ money”, said José Ugaz, the chairman of Transparency International, “more wealth is transferred to the hands of a few people by the institutional corruption, and then poverty would be exacerbated.” Democracy Index (DI) indirectly reflects the degree of justice. DI evaluates the electoral process, pluralism, civil liberties, government functions, political participation, and political culture.

Another widespread consensus is related to the concept and evaluation of economic growth. The consensus is that goods and services produced by the economy would be continuously upgraded over time. GDP per capita is a traditional indicator³. Since economic growth is a continuous and dynamic process, it would not only reflect the economy stock in the past but also implying the economic competitiveness in future. A new variable, the global competitiveness index (GCI), is composed of 12 such relevant parameters, including pillars—institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, commodity market efficiency, labor market efficiency, financial market development, technology readiness, market size, business maturity, and innovation. GCI is a complementary indicator for evaluating the real growth of a country’s economic strength.

3. Exploratory panel data on G20 countries

The relationship between social justice and economic growth is evaluated with eight elaborately selected indicators (six for social justice). Panel data of 43 countries (with 24 EU countries) from 2006 to 2016 were included. These panel data were collected from the statistics of influential organizations and institutions and then analyzed with mainstream statistical methods. G20 countries were selected for analysis for the following reasons:

First, only countries with a certain size can exert influence in international affairs. On the one hand, G20 countries have two-thirds of the world’s population, and they have a demographic advantage. On the other hand, the G20 is more mature in terms of economic growth: (1) four-fifths of their GDP per capita exceed the global average in 2006, accounting for 85% of the world’s GDP; and (2) average GDP per capita was almost three-fold of the global average from 2006 to 2016. Therefore, the model of G20 countries can be a good demonstration.

Second, the G20 countries have a diverse composition and are somewhat representative. Among the G20 countries, there are 24 developing countries and 19 developed countries; there are 28 European countries, 8 Asian countries, 1 African country, 3 North American countries, 2 South American countries, and 1 Oceania country. These countries include both established powers and emerging countries and are more timely and accurate in tracking changes in economic growth.

Third, as the world changes, the pressure of “experience failure” makes the G20 governments more confused about how to develop their economies. For instance, Western countries are generally stuck in the quagmire of economic stagflation, and high welfare social systems are unsustainable; the United States hopes to boost domestic manufacturing through protectionism and exitism; emerging countries face many obstacles to social transformation, such as the disappearance of the demographic dividend, the sharpening of social and so on. Therefore, in this study, we choose the period from 2006 to 2016 to establish an economic growth model based on social justice. We aim to explore whether the model could provide a new growth path under the shadow of periodic economic crisis.

Firstly, the equations were set up to quantify two concepts. The f(X) and g(Y) were the evaluation functions of social justice degree and economic growth degree, respectively. X and Y were composed of multiple indicators, expressed as:

(1) $X=f\left(X\right)=\sum _{i=1}^m{a}_i{X}_i^{\prime }m=1,2$(1)

(2) $Y=g\left(Y\right)=\sum _{j=1}^n{b}_j{Y}_j^{\prime }n=1,\dots ,6$(2)

Where t represented time, $a_i$ and $b_j$ represented the weight of social justice indicator i, and the weight of economic growth indicator j, respectively. $X_i^{\prime }$ and $Y_j^{\prime }$ were the standardized value of social justice indicator i and economic growth indicator j, respectively.

Secondly, the weight coefficient $a_i$ and $b_j$ was calculated with entropy evaluation method. It was a common objective assignment based upon the coefficient of variation. The data in 2006 were standardized, with the adjusted value ranged from 0 to 1. Larger dispersion degree indicated that the indicator makes a greater impact on comprehensive evaluation, as well as coefficient with more weight.

(3) $X=0.1703X_1+0.1731X_2+0.1643X_3+0.1606X_4+0.1575X_5+0.1742X_6$(3)

(4) $Y=0.4969Y_1+0.5031Y_2$(4)

Thirdly, the relative figures of other countries in the following years were calculated, with the guideline of normalized data. Here, Equations (1)(1) $X=f\left(X\right)=\sum _{i=1}^m{a}_i{X}_i^{\prime }m=1,2$(1) and (2(2) $Y=g\left(Y\right)=\sum _{j=1}^n{b}_j{Y}_j^{\prime }n=1,\dots ,6$(2) ) can be transformed into Equations (5)(5) $X_t=\left\{\begin{array}{c}\sum _{i=1}^m{a}_i{X}_{i{t}_o}^{\prime },t=2006\\ \sum _{i=1}^m\frac{X_{i\left(t\right)}^{\prime }\ast a_i}{X_{i{t}_o}^{\prime }},t>2006\end{array}\right.$(5) and (6(6) $Y_t=\left\{\begin{array}{c}\sum _{j=1}^n{b}_j{Y}_{j{t}_o}^{\prime },t=2006\\ \sum _{j=1}^n\frac{Y_{j\left(t\right)}^{\prime }\ast b_j}{Y_{j{t}_o}^{\prime }},t>2006\end{array}\right.$(6) ):

(5) $X_t=\left\{\begin{array}{c}\sum _{i=1}^m{a}_i{X}_{i{t}_o}^{\prime },t=2006\\ \sum _{i=1}^m\frac{X_{i\left(t\right)}^{\prime }\ast a_i}{X_{i{t}_o}^{\prime }},t>2006\end{array}\right.$(5)

(6) $Y_t=\left\{\begin{array}{c}\sum _{j=1}^n{b}_j{Y}_{j{t}_o}^{\prime },t=2006\\ \sum _{j=1}^n\frac{Y_{j\left(t\right)}^{\prime }\ast b_j}{Y_{j{t}_o}^{\prime }},t>2006\end{array}\right.$(6)

where $t_o$ was initial time point in 2006. Appendix 1 exhibited the annual social justice score and economic growth score of G20 countries, which were calculated according to the above three steps.

The results presented that both social justice and economic growth were stagnated for a decade (Figure 1(a,b)). More countries with high economic growth indicated that social justice was more important than the improvement quantity of economic growth. However, when comparing the slopes of two trendlines, we observed a great magnitude upgrade of economic growth. Moreover, the scores for social justice were between 0.4 and 0.8 for several G20 countries. However, the scores of more than half of countries were less than 0.3. The scores for economic growth were between 0.7 and 0.8 in one-quarter countries.

Figure 1. Comparison of social justice and economic growth

(a)social justice; (b) economic growth

Further, samples were divided into two categories based on their development stages, according to the criteria of the World Bank. There was a total of 24 developing countries. This was the first dimension based on traditional concepts on economy. Three auxiliary lines (x = 0.5, y = 0.5, and y = x) were plotted in this study. Countries were divided into three groups (Figure 2): (1) Double-Low (DL) group, 12 countries, with scores less than 0.5; (2) Justice-Leading (JL) group, 16 countries, with scores of social justice higher than 0.5, while the scores of economic growth less than 0.5; (3) Double-High (DH) group, 15 countries, with scores higher than 0.5. This was the second dimension based on the comprehensive consideration of economy and justice.

Figure 2. Plot of social justice and economic growth with G20, 2016

The data in 2016 were taken as an example. A similar tendency was observed from 2006 to 2016 (Figure 1(a,b)). It was evident that most developing countries were in group DL and group JL. While the majority (four-fifths) of developed countries lied in DH group. The rest countries belonged to group JL. Moreover, there was no country with both high social growth and low social justice. The results suggested one sustainable growth path, which started from DL, then developed to JL, finally ended in DH. Regression analysis was performed to verify this preliminary conclusion (Figure 2).

4. Regression analysis on social justice and economic growth

Historical series of the variables (Equations (5(5) $X_t=\left\{\begin{array}{c}\sum _{i=1}^m{a}_i{X}_{i{t}_o}^{\prime },t=2006\\ \sum _{i=1}^m\frac{X_{i\left(t\right)}^{\prime }\ast a_i}{X_{i{t}_o}^{\prime }},t>2006\end{array}\right.$(5) ) and (6))(6) $Y_t=\left\{\begin{array}{c}\sum _{j=1}^n{b}_j{Y}_{j{t}_o}^{\prime },t=2006\\ \sum _{j=1}^n\frac{Y_{j\left(t\right)}^{\prime }\ast b_j}{Y_{j{t}_o}^{\prime }},t>2006\end{array}\right.$(6) were analyzed for stationary as described in the above methods. The involved data were firstly examined for the presence of unit root, and results were presented (Tables 2 and 3). The tests of X and Y indicated that it was a non-stationary panel data. Results of first difference unit root test indicated that the variables were integrated of order 1.

Table 2. Unit root test of X

Methods	Unit root	Statistics	Prob.^a	Cross-sections	Obs.
Null: Unit root (assumed common unit root process)
Levin, Lin & Chu t	Level	−8.35928	0.0000	43	415
	1st difference	−16.5435	0.0000	43	368
Breitung t-stat	Level	2.00101	0.9773	43	372
	1st difference	−2.48785	0.0064	43	325
Null: Unit root (assumed individual unit root process)
Im, Pesaran and Shin W-stat	Level	−0.02518	0.4900	43	415
	1st difference	−3.14446	0.0008	43	368
ADF—Fisher Chi-square	Level	91.7409	0.3160	43	415
	1st difference	172.865	0.0000	43	368
PP—Fisher Chi-square	Level	90.6269	0.3456	43	430
	1st difference	269.330	0.0000	43	387

Note: a. Probabilities for Fisher tests were calculated with an asymptotic Chi-square distribution; all other tests were performed with the assumption of asymptotic normality.

Table 3. Unit root test of Y

Methods	Unit root	Statistics	Prob.^a	Cross-sections	Obs.
Null: Unit root (assumed common unit root process)
Levin, Lin & Chu t	Level	−16.8724	0.0000	43	406
	1st difference	−28.7550	0.0000	43	357
Breitung t-stat	Level	0.78029	0.7824	43	363
	1st difference	−7.87477	0.0000	43	314
Null: Unit root (assumed individual unit root process)
Im, Pesaran and Shin W-stat	Level	−5.18296	0.0000	43	406
	1st difference	−6.57410	0.0000	43	357
ADF—Fisher Chi-square	Level	210.048	0.0000	43	406
	1st difference	282.926	0.0000	43	357
PP—Fisher Chi-square	Level	295.228	0.0000	43	430
	1st difference	333.435	0.0000	43	387

Note: ^aProbabilities for Fisher tests were calculated with an asymptotic Chi-square distribution; all other tests were performed with the assumption of asymptotic normality.

Further, the co-integration among the variables was examined. The results of Pedroni residual cointegration test of X and Y were illustrated (Table 4). Results showed that the null hypothesis of “no cointegration relationship” was rejected by the remaining tests except for Panel v-stat, Panel rho-stat, and Group rho-stat. Generally, the cointegration of variables was appropriate for regression analysis.

Table 4. Panel co-integration test of X and Y^a

Alternative hypothesis: common AR coefs. (within-dimension)
		Statistic	Prob.	Weighted Statistic	Prob.
Panel v-Statistic^b		4.982923	0.0000	0.969942	0.1660
Panel rho-Statistic		3.741486	0.9999	2.453133	0.9929
Panel PP-Statistic		−0.078996	0.4685	−4.255600	0.0000
Panel ADF-Statistic		−1.307516	0.0955	−3.921483	0.0000
Alternative hypothesis: individual AR coefs. (between-dimension)
		Statistic	Prob.
Group rho-Statistic		5.471523	1.0000
Group PP-Statistic		−3.017295	0.0013
Group ADF-Statistic		−4.053773	0.0000

Notes: Trend assumption was deterministic intercept and trend.

Panel v-stat was right tail test and rest statistics were left tail test.

If economic growth depended on the social justice, Y was supposed to be the dependent variable, and X was an independent variable, the equation was:

(7) $\mathrm{Y}=\mathrm{C}\left(1\right)+\mathrm{C}\left(2\right)\ast \mathrm{X}+\mathrm{C}\left(3\right)\ast {\mathrm{X}}^2$(7)

The regression results were obtained based on the ordinary least squares method (OLS) (Table 5). Relationship between social justice and economic growth can be interpreted with Equation (7)(7) $\mathrm{Y}=\mathrm{C}\left(1\right)+\mathrm{C}\left(2\right)\ast \mathrm{X}+\mathrm{C}\left(3\right)\ast {\mathrm{X}}^2$(7) . Above inferences can be accepted as well as assumptions.

(8) $\mathrm{Y}=0.193032-0.780237\mathrm{X}+1.576112{\mathrm{X}}^2$(8)

Table 5. Regression analysis

	Coefficient	Std. Error		t-Statistic	Prob.
C(1)	0.193032	0.029959		6.443192	0.0000
C(2)	−0.780237	0.112491		−6.935983	0.0000
C(3)	1.576112	0.099243		15.88130	0.0000
R-squared	0.798921		Mean dependent var		0.352795
Adjusted R-squared	0.798066		S.D. dependent var		0.244526
S.E. of regression	0.109883		Akaike info criterion		−1.572480
Sum squared resid	5.674900		Schwarz criterion		−1.546101
Log likelihood	374.8916		Hannan-Quinn criterion		−1.562105
F-statistic	933.6965		Durbin-Watson stat		1.891211
Prob (F-statistic)	0.000000

According to panel data from 2006 to 2016, a justice-leading growth curve (JLGC) is observed in Equation (8)(8) $\mathrm{Y}=0.193032-0.780237\mathrm{X}+1.576112{\mathrm{X}}^2$(8) . JLGC was a new economic growth curve driven by social justice. The value of Y was minimum when X was approximately 0.2475.

5. Discussions

To further improve the credibility of evidence, multiple statistical methods were applied for obtaining the general tendency. Several special countries were found to deviate from JLGC and auxiliary lines. Therefore, it is necessary to analyze why these countries behave differently (Figure 2).

5.0.1. China and the United States⁴: economic growth vs neglect of justice

China and the United States are the two largest economies globally. However, two different development paths were taken in the past decades. Thus, it is significant to explore the development mode of these two countries. The social justice gap of China and the United States in 2016 was illustrated, respectively (Figure 3). The gap in China was almost twice that in the United States. In China, the ratio of economic growth to social justice was higher than that of the United States, indicating a much lower degree of social justice in China.

Figure 3. Social justice gap of China and the United States in 2016

Economic planning was implemented in China in the early 1950s, resulted in significant economic growth, while the income inequality was also increasing (Chu & Wen, 2017). Such inequalities are resulted from the availability of health services, labor market, public education and redistribution policy. The disparities are finally reflected in demographic, socio-economic, and health status (Lu et al., 2017). The ownership of Chinese capital is not proportionate for the reason that current economic growth is mainly relying on various capitals as financial capital and real estate (Zhang et al., 2017; Zhou & Song, 2016). In the mainstream political culture of China, the absolute egalitarianism is favored and a certain degree of income inequality is tolerated, which was affected by history (Wu, 2009). The negative effects of the social inequality attracts less attentions, since economic inequality is accompanied by the rapid economic growth. “Tolerance” to inequality is “excessively consumed” and the crisis is on its way.

Compared with other developed countries, inequality has been dragged in the United States. The development process of social justice is evolved, which focused on the integration of genders, races, classes, sexuality, and environment (Bearfield, 2009; Oldfield et al., 2006). The procedures of democracy and justice are well founded in the United States. Due to the great contribution of mass media, stress inequality is lower than expected. Multi-dimensional racial inequality is an unanticipated problem left over by history (Rohde & Guest, 2013). One potential danger of injustice was handing over social development, for example, the shooting incident was magnified over the past years. The income-related malady inequality leads to more protests, public dissatisfaction, and decline of social cohesion (Raphael, 2000). However, uncertainty of the equality is further increased since economic freedom is impeded by Trump’s “exitism” in the United States.

All countries face serious problems of inequality. When the state reforms, the disparities will have an irreversible negative impact on social development. China suffers a great failure in maintaining the balance of social equality due to the long-term impoverishment. In the absence of mature socio-economic development, the United States has successfully become a typical case of information and innovation in a “hurried” situation.

5.1. Estonia and Germany: open an optimal path

Although mixed with disorder, most G20 countries show good performance. Estonia is a prominent model for developing countries (without obvious or multiple reversals), while Germany has performed well in developed countries (progress in economic growth and social justice).

Estonia is a fair and prosperous developing country, and tremendous improvements have made Estonia a model for countries in transition. Due to the global financial crisis in 2008, Estonia suffered from simultaneous regression of economic growth and social justice. Since then, Estonia entered a period of steady growth. Estonia adopted reasonable economic policy to support fair, liberal, and excellent investment environment, for encouraging and attracting foreign and domestic investment. Thus, the score of Estonia is relatively high on EFI. Moreover, Estonia has done a good job in protecting human rights because it places greater emphasis on fundamental rights and freedoms. For example, racial disparity is not a significant barrier to accessing health care (Baburin et al., 2011). Arguably, Estonia provides one of the most generous parental benefit systems in OECD.

Germany strives to maintain steady progress, although it is not first class in all respects. Germany used to precede in democracy and gender equality, except for human rights. High quality, inclusive and significant health care can be accessed by almost citizens of Germany. During the global economic crisis, Germany continued to grow mainly due to the low unemployment rate among young people. In Germany, there is a comprehensive toolbox for active labor market programs, including financial support for vocational training programs, support for self-employed individuals, provision of workfare programs, and subsidized employment of long-term unemployed people (Schraad-Tischler et al., 2017). Employment booms promote equal employment and social mobility, as well as offsetting government debt and facilitating short-term financial stability.

A common feature of sustainable countries is more balanced structure of social justice figure 4. Various types/level of inequalities would exist in other countries even with high score of social justice. The authorities are generally striving to achieve economic-based equality to reduce the impact on production activities and resource redistribution. A well-known motto in Law, “Justice must not only be realized, but must be seen to be done.” The feedback of economic equality is facile to be measured. Once the economic inequality is addressed, the relevant levels of justice inequality would be alleviated. In summary, for any healthy society, it is best to prioritize fairness and justice in the process of deploying and implementing public policies⁵.

Figure 4. Radar map of social justice components of special countries in 2016

6. Conclusion

A different perspective has been adopted to examine the relationship between social justice and economic growth. Sociopolitical factors play a decisive role in determining growth rate, economic quality, as well as the mobilization of resources and wealth (Rao, 2011). It is essential to interpret economic growth as a quadratic equation of social justice.

Cross-country and historical comparisons are performed. Economic and social development in most G20 countries is in the first echelon of overall world development. Currently, most of them are on the right side of the JLGC. The development model related to social justice increment has been transformed, at least economic equality. The results show that developed countries have maintained a joint development of fairness and growth to a certain extent. However, when developing countries are constrained by the social justice gap, they would take a detour in their development process.

From the perspective of the public value areas to which social justice and economic growth belong, social justice belongs to social value and economic growth belongs to economic value. Both of them are integrated into the comprehensive system of social development. Due to the commonness, symbiosis, conflict, and hierarchy among public values, there may be multiple relationship attributes between social justice and economic growth (Beck Jørgensen & Bozeman, 2007; Bruijn & Dicke, 2006; Galston, 2002; Molina & Spicer, 2004; Nabatchi, 2012; Rhodes & Wanna, 2008). Whether it is complementary, conflicting, mutually reinforcing, causal, or irrelevant depends on a country’s public policy. Social value is actually a reflection of the basic demands of citizens and the balance of power relations between individuals and collectives. People are more concerned about the sense of actual acquisition rather than the cold economic data at the cost of the most basic health and safety; economic growth, more practically, is more concerned about the collective interests. In fact, the development of society is a cyclic process of absorbing first and then recreating, in which society constitutes an internal processing factory of national strength and resources, and the extraction of resources needs to take into account the endurance capacity of the people. Social justice is like the steering wheel and brake of automobile of economic development. When the state attaches too much importance to economic growth to ignore other values, social justice will step on the brake and adjust its direction; otherwise, if the social operation load is too heavy, the society may disintegrate and the state will collapse automatically.

Ideas for a sane world economy derive from social justice. From all aspects of social life, inequality breeds, and spreads from within society. To combat inequality, the flexible, transparent, open, and fair environment is dispensable. Therefore, for countries with different levels of social justice, there are two paths that can be referred to:

(1) Government-led public policy support. To reduce social inequities, local governments can access to all resources in approach design and performance assessment (Gooden, 2017). Therefore, the government has the ability and obligation to work to improve social equity and justice, and public policy should serve a more balanced structure of social justice. Judging from the constituent elements of social justice, justice exists in rights, property, and rules. The three elements are both independent and interrelated. From the perspective of the dialectical relationship between the three, rights are the result of social justice, rules are the institutional arrangements that guarantee rights, and property rights are the most intuitive benefit for citizens. Creating and protecting a fair environment plays an important role in public policy and economic planning. Because it is easiest to identify, measure, and plan, the public policy generally begins with reducing economic inequality, and then evolves into an extensive “social justice policy pool” such as income redistribution, healthcare, social security, higher training and employment, and “Equality for All”. Public policy starts with human health, safety, and development, which is closely related to the changing pattern of human needs, that is, food and clothing first (income), then the development and of security (opportunity), and finally settled in the entire institutional environment (system).

(2) Supervision mechanism supplemented by social organizations. For the justice-based economy, the solution based on the graft of “government enforcement” was proved futile. Excessive government intervention may hurt the original social value resources (Klasen, 2014). At this time, a flexible mechanism is needed to support the implementation of public policies, and this strength comes from social organizations or the masses. Think tanks, non-governmental organizations (NGOs) and civil society should strive to participate in the entire process of public policy development, implementation, monitoring, and evaluation. Empowering different individuals or organizations within a country is essentially a supervision of the country’s political system, a balance within the country, and a weapon to stimulate social vitality and prevent class consolidation. Any citizen can become a “whistleblower” for the country or policy. People’s attitude or behavior changes from indifference to concern and identification to participation and supervision reflect the degree of a country’s centripetal force.

In the final analysis, the relationship between social justice and economic development is to better promote the development of the country to adapt to the unprecedented changes in the current century. The economic level, governance ability, social stability, cultural education, and ecological environment of a country are no longer tied to national boundaries. The development of scientific information technology and the communication of the International Internet of Things have drawn a huge network of relationships. Under the complicated international situation, social justice is not only related to economic development but also related to political, cultural, and ecological values. At the same time, social justice in one country will also affect the justice environment in other regions or countries.

It is necessary to analyze the impact of social justice on economic development from the complex value correlation. In the future research, we will try to further decompose the influence factors of social justice and economic growth, and monitor the change of influence factors by screening key indicators. In particular, there are some indicators with comprehensive value in the category of social justice indicators, such as institutional justice is closely related to political value, and rights justice and social value are inextricably linked. The relationship of contradiction, mutual promotion, symbiosis, or transformation between these comprehensive values will affect the judgment of the impact of social justice on economic growth.

At the same time, in order to further determine the relationship between social justice and economic growth, it is also necessary to study whether the changes between the two are coordinated, that is, to analyze whether the inflection point of social justice and economic growth has occurred. It requires more detailed case studies of typical countries. Only when the value of economic growth and social justice reaches a symbiotic relationship, can it prove that the country’s growth is sustainable, and it is a template worthy of learning and emulation from other countries, which is in line with the law of development.

Author statement

Shijun Li and Bing Wang’s research interests focus on public value and development, including ecological value and national security, ecological civilization, and national competitiveness, the effect of non-economic value on economic value, and so on. This study selects the complex values of social justice and economic growth in the hope of discriminating how the public values of different value dimensions are combined to maximize national development.

Additional information

Funding

This work was supported by the National natural science foundation of China under Grant [71673092]; National natural science foundation of China under Grant [71573096].

Notes on contributors

Shijun Li

Shijun Li is a PhD candidate of College of Public Administration at Huazhong University of Science and Technology, China. Her research field is public value and national power.

Bing Wang

Bing Wang is a professor of College of Public Administration at Huazhong University of Science and Technology, China. His research field is public value creation and measurement.

Notes

1. To be clear, the terms of “equality”, “equity”, and “justice” were often used interchangeably. Simply, equality emphasized the same status of all people. Justice underlined moral duty based on equality. Equity was a more flexible measure allowing for equivalency while not demanding exact sameness (Guy & McCandless, 2012). However, social equity is the “third pillar” of public administration (Frederickson, 1990), and its concept may be limited to the requirements of authority. Then, equality was considered a constitutive feature of justice (Albernethy, 1959; Benn, 1967; Brown, 1988; Dann, 1975; Gosepath, 2011; Thomson, 1949). Meanwhile, equality also acted as a default in certain circumstances (e.g. special resource allocation in a disaster). Therefore, social justice, as a term, is better suited to the pursuit of fairness in an objective and specific category.

2. The concept of public value has been increasingly important, along with Neo-liberalism and New Public Management oriented reforms (Frederickson, 1997; Stewart & Walsh, 1992). Public value stems from the expectations of citizens and enters the public domain through the political process. It is a systematic integration of political, economic, social, cultural, and ecological value for a certain period (Benington & Moore, 2010; Moore, 1997). The task of social development in the contemporary environment included not only creating public value but also correcting deviations from value orientation (Easterlin, 2013)..

3. The level of economic growth was emphasized, rather than rate; thus, GDP per capita was selected for analysis.

4. China and the United States were taken as examples, because of the similar score of China and Saudi Arabia.

5. Social justice gap was the distance between ideal value and actual value based on JLGV.

Appendix

Appendix 1: Relevant statistics

Table

Time	2006		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016
Indicator	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X	Y	X
Argentina	0.039	0.429	0.045	0.431	0.054	0.435	0.050	0.426	0.061	0.424	0.073	0.417	0.073	0.416	0.073	0.416	0.070	0.417	0.076	0.431	0.071	0.443
Australia	0.529	0.813	0.555	0.817	0.604	0.821	0.563	0.824	0.611	0.838	0.667	0.848	0.697	0.844	0.696	0.842	0.665	0.842	0.639	0.842	0.605	0.842
Austria	0.548	0.756	0.586	0.747	0.613	0.750	0.587	0.742	0.578	0.748	0.606	0.755	0.595	0.744	0.603	0.743	0.609	0.752	0.565	0.770	0.574	0.776
Belgium	0.510	0.748	0.543	0.748	0.567	0.738	0.545	0.724	0.541	0.734	0.567	0.744	0.552	0.746	0.557	0.759	0.564	0.767	0.527	0.775	0.535	0.780
Brazil	0.054	0.366	0.061	0.361	0.069	0.357	0.068	0.353	0.082	0.356	0.091	0.366	0.088	0.376	0.087	0.372	0.086	0.373	0.068	0.362	0.068	0.354
Bulgaria	0.021	0.473	0.027	0.478	0.033	0.478	0.032	0.471	0.032	0.473	0.036	0.485	0.034	0.502	0.035	0.516	0.036	0.527	0.032	0.533	0.034	0.534
Canada	0.600	0.806	0.623	0.801	0.636	0.804	0.601	0.809	0.635	0.823	0.663	0.834	0.661	0.828	0.655	0.827	0.648	0.832	0.613	0.842	0.604	0.850
China	0.165	0.133	0.168	0.135	0.175	0.139	0.178	0.140	0.184	0.139	0.190	0.140	0.190	0.141	0.192	0.140	0.196	0.138	0.198	0.139	0.200	0.141
Croatia	0.108	0.438	0.120	0.445	0.132	0.447	0.121	0.437	0.118	0.445	0.124	0.454	0.116	0.462	0.119	0.467	0.119	0.478	0.108	0.492	0.112	0.497
Cyprus	0.225	0.531	0.247	0.532	0.274	0.547	0.257	0.532	0.249	0.535	0.254	0.547	0.235	0.556	0.229	0.549	0.226	0.546	0.202	0.556	0.200	0.560
Czech Republic	0.271	0.609	0.284	0.608	0.309	0.609	0.295	0.600	0.292	0.606	0.300	0.615	0.289	0.631	0.287	0.629	0.290	0.638	0.285	0.657	0.291	0.651
Denmark	0.721	0.914	0.757	0.918	0.791	0.920	0.748	0.916	0.736	0.923	0.763	0.933	0.736	0.917	0.742	0.916	0.758	0.915	0.710	0.907	0.714	0.901
Estonia	0.299	0.662	0.317	0.666	0.321	0.672	0.298	0.661	0.300	0.663	0.315	0.672	0.316	0.680	0.325	0.701	0.333	0.710	0.319	0.737	0.324	0.747
Finland	0.647	0.926	0.685	0.929	0.714	0.926	0.674	0.920	0.664	0.933	0.697	0.953	0.685	0.939	0.696	0.951	0.695	0.942	0.650	0.957	0.655	0.947
France	0.539	0.597	0.565	0.604	0.588	0.593	0.562	0.592	0.556	0.596	0.574	0.611	0.556	0.614	0.562	0.628	0.565	0.642	0.534	0.645	0.540	0.649
Germany	0.615	0.718	0.646	0.729	0.664	0.734	0.635	0.740	0.637	0.748	0.666	0.763	0.656	0.766	0.672	0.771	0.679	0.790	0.645	0.805	0.652	0.812
Greece	0.173	0.533	0.195	0.518	0.212	0.521	0.199	0.518	0.183	0.527	0.177	0.531	0.157	0.518	0.156	0.534	0.156	0.526	0.136	0.531	0.135	0.534
Hungary	0.202	0.519	0.210	0.521	0.215	0.526	0.201	0.532	0.205	0.531	0.211	0.539	0.203	0.552	0.206	0.553	0.209	0.544	0.199	0.536	0.200	0.527
India	0.136	0.292	0.132	0.291	0.132	0.280	0.131	0.272	0.132	0.272	0.131	0.277	0.132	0.289	0.130	0.294	0.128	0.307	0.131	0.303	0.138	0.304
Indonesia	0.061	0.239	0.063	0.246	0.064	0.247	0.064	0.252	0.069	0.258	0.069	0.266	0.070	0.266	0.071	0.276	0.072	0.288	0.070	0.285	0.071	0.280
Ireland	0.603	0.862	0.639	0.869	0.636	0.870	0.576	0.872	0.552	0.877	0.573	0.872	0.565	0.855	0.581	0.863	0.606	0.866	0.648	0.875	0.662	0.885
Italy	0.290	0.579	0.313	0.588	0.329	0.580	0.308	0.557	0.303	0.550	0.318	0.552	0.300	0.557	0.302	0.573	0.302	0.582	0.275	0.594	0.278	0.608
Japan	0.616	0.725	0.609	0.715	0.627	0.714	0.635	0.717	0.655	0.721	0.677	0.735	0.679	0.726	0.635	0.734	0.628	0.727	0.608	0.728	0.633	0.728
Korea	0.414	0.621	0.445	0.630	0.423	0.634	0.396	0.634	0.412	0.633	0.428	0.639	0.435	0.634	0.437	0.630	0.444	0.619	0.442	0.620	0.447	0.616
Latvia	0.185	0.531	0.206	0.533	0.213	0.553	0.186	0.542	0.184	0.547	0.199	0.548	0.203	0.564	0.211	0.585	0.217	0.601	0.205	0.603	0.207	0.614
Lithuania	0.187	0.580	0.203	0.579	0.215	0.580	0.195	0.579	0.198	0.587	0.211	0.595	0.211	0.613	0.218	0.628	0.225	0.630	0.215	0.650	0.220	0.648
Luxembourg	0.768	0.814	0.853	0.819	0.898	0.818	0.842	0.817	0.857	0.834	0.916	0.848	0.869	0.838	0.907	0.849	0.942	0.839	0.846	0.849	0.841	0.844
Malta	0.159	0.615	0.173	0.611	0.189	0.611	0.182	0.597	0.185	0.606	0.194	0.616	0.190	0.628	0.203	0.633	0.214	0.631	0.200	0.644	0.209	0.646
Mexico	0.115	0.375	0.118	0.378	0.119	0.378	0.109	0.374	0.115	0.373	0.121	0.374	0.122	0.372	0.124	0.378	0.124	0.384	0.118	0.377	0.115	0.380
Netherlands	0.627	0.841	0.667	0.848	0.699	0.856	0.665	0.859	0.657	0.853	0.680	0.867	0.664	0.859	0.670	0.867	0.676	0.865	0.639	0.869	0.648	0.863
Poland	0.159	0.507	0.167	0.507	0.181	0.509	0.170	0.503	0.180	0.513	0.185	0.524	0.181	0.538	0.185	0.556	0.188	0.568	0.179	0.576	0.180	0.572
Portugal	0.242	0.636	0.258	0.636	0.269	0.634	0.258	0.620	0.254	0.632	0.258	0.635	0.244	0.642	0.250	0.647	0.256	0.660	0.241	0.675	0.243	0.685
Romania	0.029	0.424	0.040	0.427	0.049	0.427	0.040	0.432	0.041	0.440	0.045	0.440	0.042	0.445	0.047	0.456	0.049	0.459	0.044	0.472	0.047	0.477
Russia	0.077	0.192	0.088	0.183	0.102	0.188	0.085	0.183	0.097	0.186	0.114	0.186	0.118	0.187	0.121	0.189	0.115	0.190	0.092	0.193	0.090	0.192
Saudi Arabia	0.164	0.142	0.175	0.147	0.198	0.138	0.177	0.146	0.198	0.141	0.226	0.148	0.235	0.152	0.231	0.154	0.228	0.163	0.208	0.167	0.200	0.171
Slovakia	0.224	0.518	0.236	0.533	0.248	0.532	0.234	0.539	0.232	0.544	0.238	0.551	0.232	0.566	0.235	0.581	0.239	0.585	0.229	0.597	0.233	0.602
Slovenia	0.244	0.568	0.266	0.576	0.286	0.583	0.273	0.586	0.262	0.593	0.267	0.596	0.255	0.607	0.256	0.604	0.260	0.615	0.244	0.632	0.252	0.644
South Africa	0.183	0.496	0.181	0.494	0.179	0.490	0.177	0.488	0.184	0.479	0.188	0.479	0.186	0.484	0.183	0.492	0.180	0.496	0.178	0.497	0.179	0.490
Spain	0.353	0.682	0.374	0.688	0.392	0.682	0.369	0.672	0.357	0.683	0.364	0.687	0.349	0.692	0.352	0.694	0.353	0.702	0.334	0.707	0.342	0.711
Sweden	0.659	0.931	0.705	0.933	0.718	0.933	0.663	0.916	0.699	0.916	0.744	0.920	0.725	0.924	0.738	0.937	0.727	0.933	0.683	0.938	0.696	0.933
Turkey	0.084	0.282	0.094	0.281	0.098	0.285	0.089	0.277	0.099	0.290	0.102	0.298	0.106	0.319	0.110	0.304	0.108	0.289	0.101	0.280	0.101	0.262
United Kingdom	0.681	0.804	0.702	0.796	0.674	0.786	0.619	0.788	0.627	0.787	0.652	0.798	0.659	0.795	0.657	0.813	0.683	0.813	0.671	0.823	0.654	0.821
United States	0.758	0.673	0.756	0.682	0.764	0.699	0.743	0.707	0.737	0.704	0.744	0.710	0.757	0.709	0.766	0.722	0.781	0.723	0.797	0.716	0.811	0.719

Notes: 1. The final value of them is equal to 10 minus of the original because HR and EI were negative and range from 0 to 10.

2. In terms of DI, it was counted every two years from 2007 to 2010, so the value of 2007 was equal to 2008 and the value of 2009 was equal to 2010.

3. As for CPI, the range of values increased tenfold since 2012, so the final value was divided by 10.

4. There were five missing data: Saudi Arabia’s GCI in 2006, Luxembourg and Malta’s EI and HR in 2006. All of them are estimates based on the trend line of the following decade.