Katana VentraIP

Broad measures of economic progress

Although for many decades, it was customary to focus on GDP and other measures of national income, there has been growing interest in developing broad measures of economic well-being. National and international approaches include the Beyond GDP programme developed by the European Union, the Better Lives Compendium of Indicators developed by the OECD, as well as many alternative metrics of wellbeing or happiness. One of the earliest attempts to develop such an index at national level was Bhutan's Gross National Happiness Index and there are a now a number of similar projects ongoing around the world, including a project to develop for the UK an assessment of national well-being, commissioned by the Prime Minister David Cameron and led by the Office for National Statistics.

GNH[edit]

The Gross National Happiness (GNH) phrase was initially used as an off-hand remark by the King of Bhutan to indicate his lack of interest in western materialistic style of economic development. The implementation of the GNH philosophy was meant to prohibit TV and Jeans from becoming part of the culture of the Bhutanese population.[1] Despite modernization of the GNH concept by Karma Ura, Up to date the GNH is seen by some to hide some values that are in contradiction to western lifestyle.[2]


In 2005, a US based think tank, the International Institute of Management, published a working paper[3] followed by a policy white paper in 2006 calling for the implementation of GNH philosophy in the United States. The papers called for a secular and more scientific implementation of a public policy framework and econometric measurement tool also known as Gross National Well-being or GNW and launched the first secular global gross national happiness index survey. Despite, the differences in the visions, both papers credited the King of Bhutan for the inspiration.


The American GNH framework and GNH Index Survey was referenced by various researchers and policy makers as an answer to the failures of unchecked capitalism and hyper-focus on GDP. Among the prominent proposals was a report to US congress, UK Prime Minister Office, and Government of Goa.[4][5][6]


Later happiness and well-being development frameworks were similar to the proposal. For example the Bhutan GNH Index published in 2012 after 2 years of research was not dissimilar from the first secular GNH framework and Index of 2005. The main difference was the addition of spiritual elements such as Karma and prayers indicators to fit the local Bhutanese culture. The Bhutan GNH philosophy was initially dismissed due to its generality and was considered as touchy-feely concept, but later taken seriously after it published an econometric framework.[7] [8][9]

Complementing GDP with highly aggregated environmental and

social indicators

Near real-time information for decision-making

More accurate reporting on distribution and inequalities

Developing a European sustainable development scoreboard

Extending national accounts to environmental and social issues.

[12]

In 2007, the European Commission, the European Parliament, Club of Rome, OECD and WWF hosted a conference titled "Beyond GDP". The consensus was to widen measures of economic growth and come up with measures that can inform policy making.[10][11] The conference was attended by over 650 policy makers, experts and social activists. Spurred by its success the European Union released a communication titled GDP and beyond: Measuring progress in a changing world[12] that identified five actions to improve the indicators of progress in ways that make it more responsive to the concerns of its citizens:


Following this communication and its adoption by the European Parliament in June 2008, many European governments and policy makers have started work on developing new measures of economic development.[13]


In August 2013, the European Commission published the Staff Working Document on "Progress on 'GDP and beyond' actions" , in which reviews what had been achieved on the five steps identified in the communication GDP and beyond: Measuring progress in a changing world. Some of the most significant actions taken include:


In addition, the European Commission provides a list of different indicators that can be categorised into five categories :

Suggested measures[edit]

Some other measures that have been suggested as a replacement of GDP are Index of Sustainable Economic Welfare (ISEW) as suggested by Friends of the Earth and Environmentally Sustainable National Income (eSNI) by Dr. Hueting.


Numerous other measures have been suggested to supplement, not simply replace GDP, creating a "dashboard" of metrics to track the economy and well-being.[17]

European Union.

[1]

. [2]

OECD

Office for National Statistics (UK)

[3]