Governments Redefining Development

As I discussed in my last post, governments and international organizations are increasingly taking an interest in alternative ways to measure countries’ development, outside of the traditional measure of gross domestic product.

For example, in 2008, the French government commissioned a report from a group of leading social scientists, known as the Commission on the Measurement of Economic Performance and Social Progress, to explore the limitations of current economic and social measures and to propose alternatives. The major recommendations of the commission’s 2009 Report are instructive and mark a departure from conventional wisdom. The commission concluded that, in today’s complex economy, better measures of economic performance are required, specifically ones that take into account household income, wealth distribution, and inequality. More important, the commission endorsed a multidimensional take on wellbeing, which considers factors such as health, education, ability to find work, political voice and governance, social connections and relationships, sustainability and environmental concerns, and economic and physical insecurity. In a relatively radical departure from previous thinking, the commission argued that this diverse set of quality-of-life indicators should consider inequalities, not just overall wealth.

The small kingdom of Bhutan has also become a leader in the alternative development measurement movement. Bhutan’s Gross National Happiness (GNH) index, first developed by King Jigme Singye Wangchuck in 1972, aims to chart progress according to the deceptively straightforward metric of “happiness.” Recognizing, as Aristotle did, that happiness does not derive solely from material possessions, the Bhutanese government has rejected per capita income as a measure of wellbeing. Calculated primarily based on household surveys and government data, the index considers seven core indicators of wellbeing: economic, environmental, physical, mental, workplace, social, and political.

The Bhutanese government has earned international recognition for its alternative index, successfully championing a UN resolution to include happiness as a development indicator. To be sure, Bhutan’s index is idealistic and might be too complex to be adopted on a global scale. But this tiny country has helped change the thinking of leading development economists and world leaders. Last year, UN Secretary-General Ban Ki-moon called for a “new economic paradigm” based on the premise that “Social, economic and environmental well-being are indivisible. Together they define gross global happiness.” With such high-level backing from world leaders, governments, and international organizations, “alternative” measurements of development and wellness might soon be commonplace.