It is something of a truism to note that recent decades have seen gross domestic product (GDP) morph from an important measure of economic growth to become the key driver of government decision-making seemingly across all areas of policy.
Less often noted are the increasing numbers of people suggesting that we need to look beyond growth to determine the wellbeing of citizens and the progress of our societies, a view which has become increasingly mainstream, even at times attracting support from the likes of Nicholas Sarkozy and David Cameron.
But the flourishing of these ideas and the emergence of a breathtaking array of ‘Beyond GDP’ indicators which measure everything from subjective happiness to inequality and food security has not produced much evidence of a resulting impact on policy making. In fact, in these latter years of the financial crisis it often appears that governments are chasing growth to the exclusion of almost anything else; as an end in itself. Thus numbers have become the objective to be reached (in the UK this equates to 0.4%=good, 0.8%=even better!) rather than as a means to achieving something more profound such as higher levels of well-being or a more equal or prosperous society.
It was this dilemma that brought together a group forty indicator experts, economists, statisticians, government officials, trade union representatives and policy makers in Venice this week. Under the banner of the BRAINPOoL project, which was established by the European Commission to shed some light on the relationship between alternative indicators and policy making, participants engaged in two days of workshops, simulation games and finally a round of commitments.
Early discussions focused on the key question of what is preventing the adoption of more integrated policy solutions that are guided by a broader range of indicators, that would allow us, for example, to target ‘good growth’ as opposed to ‘bad growth’, and in some instances even sacrifice elements of growth if it comes at the expense of well-being or long-term sustainability. In essence, attempting to identify the key obstacles to effectively going ‘Beyond GDP’.
First up, a sizable challenge. It was noted that there is clearly an entrenched bias in policy making towards striving for GDP growth which is exacerbated by the commonly held belief that maximising growth defines economic competence, which in turn is often a primary factor in winning elections (“it’s the economy stupid”). Getting politicians and particularly Ministers to shift their gaze away from the GDP figures is thus an immediate uphill struggle. It is unsurprising, therefore, to find that the successes that have been achieved through the use of alternative indicators at the national level tend to be outside the economic sphere, in the realms of public health, prison reform or farmland biodiversity.
Other barriers were suggested thick and fast. Making use of Beyond GDP indicators often involves complex analysis which can limit their use to specialists. They are often multi-disciplinary with all the resulting (but necessary) difficulties of working across silos. They reveal long term trends while the rest of world seems fixated on quarterly results and short term election and news cycles. It was suggested that alternative indicators lack a compelling alternative ‘model’ in the way that the Keynesian growth model links with GDP which can lead to perceptions of a lack of realism or even distrust of their ulterior motives.
Day two saw participants focus on how to overcome some of the hurdles that had been identified and delineating the basis of a ‘roadmap’ for the better use of Beyond GDP indicators. Communication was identified as a key feature. A strong Beyond GDP narrative needs to be developed and opportunities to communicate it need to be fully embraced. Clarity around Beyond GDP terminology needs to be improved and concepts like ‘well-being’, ‘welfare’ and ‘sustainable’ need consistency and a common standard. Indicators should be better linked to the lifestyles and concerns of citizens, and the public should be allowed to decide on the choice of important indicator domains through greater civil society consultation. Science should also be fully utilised to demonstrate the consequences of non-action.
Certain fundamentals also need to be rectified, not least in the very education of future economists. It was pointed out that current macro-economic textbooks devote only two pages to a basic summary of the entire ‘Beyond GDP’ field. It was thus cheering to hear the news that undergraduates at Manchester University have this week proposed an overhaul of orthodox economic teachings to embrace alternative theories.
Other opportunities also abound. The world is in the midst of a major policy debate about the objectives of public policy resulting from the Rio+20 conference last year and which targets and indicators should be used to define the world’s Sustainable Development Goals (SDGs) for the period 2015-2030.
Moving the focus from measurement to action to the actual use of these alternative indicators in the policy making process is going to take commitment, cooperation and years of overcoming entrenched resistance. BRAINPOoL’s roadmap is not going to achieve this on its own.
But the process should also not be insurmountable. Recent polls show there is clear international public support for using health, social and environmental statistics as well as economic statistics to measure societal progress and human well-being, and the positive outcomes for society resulting from such a shift are becoming abundantly clear.