Beyond GDP: national intelligence quotient as a catalyst for sustainable socioeconomic welfare

Abstract This study examines the causal effects of national intelligence quotient on economic and welfare growth across 108 countries, emphasizing cognitive capital as a critical development lever under institutional heterogeneity. Using a robust instrumental variable strategy—anchored in historical and ecological variation—combined with quantile regressions, latent class models, and machine learning, the analysis reveals that higher national IQ significantly enhances GDP and sustainability-adjusted welfare. Effects are especially pronounced in low-growth and institutionally weak settings, suggesting that cognitive capacity fosters “catch-up” growth where education and trust are limited. Conversely, the highest returns emerge in countries with strong institutional trust and efficient education systems, highlighting key complementarities. Findings underscore the developmental importance of cognitive capital and inform policies that integrate cognitive skills, institutional reform, and mental health as foundations for inclusive, sustainable growth.