Going Beyond GDP: Making the leap from measurement to policy

This blog is by Alistair Whitby, Senior Policy Officer at the World Future Council one of the 7 partners of the BRAINPOol project. The post discusses some of the project's recent conclusions on how to broaden the measures of progress in societies. 

Turn on the news on any given day and you would be forgiven for thinking that market growth was the answer to all our problems. At a time of economic fragility it is perhaps unsurprising that the minds of policy makers tend to return frequently to the question of kick-starting growth. But the opposite perspective, that the objectives that have dominated economic policy for the last 40 years – maximising Gross Domestic Product (GDP) and market efficiency – are not only inadequate goals for society but might even be part of the problem, is becoming increasingly mainstream.

But how can this emerging realisation that we need broader methods of measuring the progress of our societies start to have an impact in shaping politics and policy? It was to tackle this question that the BRAINPOoL project was set up two and a half years ago and some of its recent conclusions seem to be gaining traction:

People Power

One problem we encountered frequently in the project was the current disconnect between the Beyond GDP movement and the general public. While there is great demand from parts of civil society for positive social and environmental change, people tend not to think in terms of indicators, and thus the measurement debate has so far often been left to experts. This needs to change. If we are going to deal seriously with the issue of ‘what really matters’, we are going to have to make much better efforts at actually asking people what matters to them. Beyond GDP concepts need to be rooted in processes, goals and targets that have legitimacy. Citizens should be involved in selecting political priorities.

The good news is that there are positive signs of change. A diverse array of people from social scientists and citizens groups to NGOs and psychologists are now actively engaged in the alternative indicators debate. Furthermore, whether ‘what matters’ to the public turns out to be job security, health, quality of life, environmental sustainability, social cohesion or overall well-being, all of these things can now be more accurately measured, providing policymakers with robust options for new policy objectives. As noted in the conclusions of last week’s EESC event ‘Let’s Talk Happiness’, these developments mean Beyond GDP can act as an instrument promoting democratic renewal, enabling citizens to make informed, democratic choices with greater proximity to the policy making process.

A New Story of Progress

A key element to winning public support will be communicating a compelling Beyond GDP narrative that provides an alternative story to the current growth-at-all-costs mantra, showing the real differences that the use of alternative indicators will make to policies and outcomes. To be successful indicators must connect with things that have impact on people’s lives (good jobs, equality, security and happiness) highlighting problems and pointing towards solutions. This beyond GDP narrative needs to be able to win votes if it is to become mainstream, and it needs to explain in a consistent way how the world is. Articulating a more holistic vision of progress which strongly resonates with the public should not prove too problematic, however, as the broad themes of this agenda match the public’s preferences to a far greater degree than growth pure and simple. International surveys consistently support this impression.

The advent of big data, wearable devices and mobile technology are converging to allow the creation of new, more timely Beyond GDP indicators that can give us real-time impressions of health, well-being, environmental and social trends, providing a readily available alternative picture to the regular quarterly economic data. Daily air pollution updates are already available in many cities, while apps that track the happiness levels of wearers throughout the day are providing valuable new insights on the foundations of human well-being.

New Ways of Making Policy

All this innovation does pose challenges for policy however. We found a number of barriers to ‘going beyond GDP’ that relate to the particular difficulties for policy-making of adopting a more holistic, multi-dimensional view of progress. Innovation and experimentation will be needed (for example considering combinations of policies that have not been tried before). This shift will require the ability to manage the greater complexities of the world outside of economic statistics, and without falling back on the standard economic thinking and models. This will not be easy, but is both necessary and possible.

One of the exciting aspects of the BRAINPOoL project’s Final Conference was to hear experienced policy makers from France, the UK, Finland and Italy confirm that the adoption of B-GDP indicators can really change the priorities of political action. Imagine what labour market policy could look like if explicitly driven by the aim of maximising well-being: A “living” minimum wage? Flexible or shorter working week? Generous provision of parental leave? The positive benefits for society resulting from a Beyond GDP shift are becoming abundantly clear.

- Alistair Whitby

 

To read more about the BRAINPOoL project’s results please see www.brainpoolproject.eu or read our short summary of results and recommendations here.

We are already in a Beyond-GDP world, but we need a compass

This blog, written by Donato Speroni, provides some highlights from the final conference of the BRAINPOoL project which prove useful for moving beyond GDP. The post is based on an article published on numerus.corriere.it and is part of the Wikiprogress Series on Data and Statistics.

Being a journalist and blogger about statistics and politics, I have been following the “Beyond GDP” (B-GDP) research since the 1st OECD Forum on “Statistics, Knowledge and policy” in Palermo in 2004. We all know that the need to find new ways for measuring progress was outlined almost 50 years ago by Robert Kennedy and that the research became a global effort from 2009, after the publication of the Stiglitz Report. The economic crisis dramatized the need for new parameters, because it changed the values contributing to an acceptable well-being, while sustainability is also becoming a growing concern.

Everywhere new statistics were provided, dashboards and composite indicators were tested, but the real problem was the limited use of these experiences by decision makers, especially at national level. The whole “measuring progress initiative” was risking to run aground, to remain a stimulating intellectual exercise with no impact on the real word.

In this framework, the final conference of the BRAINPOoL project on March 24 in Paris set a turning point. BRAINPOoL means “bringing alternative indicators into policy”, and the European Commission finances the project. The Paris meeting included two panel discussions, the first hosted personalities who had governmental or political responsibilities (Enrico Giovannini, Helen Goodman, Chantal Jouanno and Mikael Jungner), the second hosted economists and civil service directors from different countries (Jan Verschooten, Gus O’Donnell, Andrew Dean, Volker Schmitt, Wanda Gaj, Stefan Kooths), under the Chair of Martin Durand, OECD chief statistician. 

Here are some outputs that I found particularly interesting and stimulating:

• Testimonials who held effective political and administrative power confirm that the adoption of B-GDP indicators might really change the priorities of political action. For example, labour market policy might be different if explicitly driven by the aim of maximising well-being. Today’s politicians mainly look at employment and unemployment rates. The use of alternative indicators would show greater importance for a work-life balance, quality working conditions and job security.

• Inequalities impair the adoption of alternative indicators. The have-nots, who should benefit more from the B-GDP policies, cannot afford a trade-off between actual economic benefits, however limited, and future improvements of the social or environmental context. Talking about alternative indicators does not win votes.

• In order to go beyond these difficulties, we need a “new narrative”. The alternative indicators should be presented in an effective and understandable way, putting the accent on the risks that we are taking if we stick to the traditional political targets. Data like GDP or unemployment are important, but place the attention on the short-term goals of political action. B-GDP indicators envision problems and collective interventions that might have an influence on the quality of life after five years or more, well beyond the electoral cycle. This contrast is evident if we take into consideration the environmental changes or the deterioration of the human and social capital of a community. A new narrative must be capable of arousing interest and engagement in the media, in public opinion and hence in political leaders, presenting the future effects of these current unsolved problems. Without this narrative, the short-term problems to be dealt with before the next elections will always prevail.

• We need social and environmental data just as timely as the economic data. Almost all the social data comes out yearly, while the economic figures come out quarterly or monthly. Instead, “we want to know in real time how many people are alone at Xmas” as was said in Paris. Polls are not enough; we need reliable information, based on adequate investments in social statistics. In the UK, Margaret Thatcher decided to cut the social surveys because she did not want too many figures about poverty while she was implementing free market policies. Now (I think) we still need policies based on the free market (for instance, cuts in public spending), but we also want to know as soon as possible the social consequences in order to manage timely interventions.

• In any case, the ideological quarrel about GDP should be scrapped. Tax revenues, public deficits and European policies aimed at reducing the sovereign debts all depend on the trends of the domestic product. GDP determines the dimension of public expenses and of social contributions. Therefore, it is a bad mistake (and a lost battle) to present GDP indicators and policies as a banner for “anti-market economics”.

• The core of B-GDP is finding a way to enhance people’s satisfaction with their lives. It cannot be done without stronger policy interventions. This means having public powers which care about citizens’ relations, long life training and maybe people’s capacity to “extract happiness” from their condition. Do we really want this “invasive” public action? This is the real political issue, which requires common sense and “middle of the road” answers. We probably cannot accept ideologies in favour of knocking down State intervention with the wrong idea that the free market will “someday” overcome excessive inequalities in incomes, health or instruction. Most of us want public powers that protect the right to pursue happiness, but not many of us want a government telling its citizens “how to be happy” and “how to behave for their own good”. It’s a delicate political balance.

• We need B-GDP models, as we have models based on GDP, but we do not know how to put the social data into these models. It would be even more difficult to include the environmental data about phenomena which cannot be priced, like biodiversity. Econometric models are not perfect and their predictions are often wrong, especially in these times of crisis, but they are employed to evaluate different alternatives in fiscal and monetary policy. National and international institutions have their own models, constantly updated. Now we would need to enlarge these systems of equations in order to obtain a “well-being forecast”, which should tell us, if new public decisions might increase or decrease collective quality of life, distances between social classes, preservation of natural or cultural resources, or even warn us of the risks of social unrest or environmental catastrophe. It’s a big challenge.

The general impression after the Paris debate was that we are already “beyond GDP”, because political decisions do not depend only on growth and other economic factors. We currently have many statistical indicators which might help in this process, much more than ten years ago, However, decision makers use them randomly, following their own convenience without any effective consensus on the choice of the data considered important in the political debate. We are in a B-GDP Europe, but we still don’t have a compass to help us find our way. This is an important topic for the next European elections and for the incoming Commission in Brussels. The BRAINPOoL process offered a lot of food for thought and needs to be continued.

In a short time, another important B-GDP project will come to a conclusion: the E–Frame project by the National statistics institutes will produce a “Handbook for the use of alternative indicators”. Italy has an important role in this process, with the leadership of E-Frame by Istat (together with Statistics Netherlands) and the new national Bes indicators for equitable and sustainable well-being. I hope that the government in Rome will give adequate attention to the B-GDP issues during the Italian semester of the European presidency starting on July 1st of this year.

- Donato Speroni
@dospe

See Also:

• Review report on Beyond GDP indicators: categorisation, intentions and impacts 
• Barriers to the use of alternative (‘beyond GDP’) indicators in policy making and how they are being overcome and can be overcome
• The National Well-being Project
• New Economics Foundation

 

What are the barriers for using Beyond-GDP indicators?

This blog, written by Dora Almassy, is about the current BRAINPOol project and the barriers the project has found in trying to establish alternative indicators beyond GDP. The post is a part of the Wikiprogress series on Data and Statistics.

The final conference of the BRAINPOol (Bringing Alternative Indicators into Policy) project takes place today, on 24th March 2014, in the premises of Organisation for Economic Co-operation and Development (OECD) Conference Centre in Paris. (Click here for the event programme.) Given the increasingly important role of Beyond GDP indicators in the economic policy debate, the event aimed to catalyse the adoption of new measures of progress, bringing together representatives from the spheres of politics, academics and civil society. During the conference, the project’s key findings and recommendations were also presented. 

The BRAINPOol project, funded by the European Commission’s 7th Framework Programme, aims to summarise existing knowledge of alternative indicators and to promote their use in policy-making processes. In the framework of the project, Beyond-GDP indicators were first reviewed and categorised, then characterised by demand for these indicators.

Most recently, the BRAINPOol project published a report on barriers to the use of alternative indicators in policy-making and discussed how these barriers can be overcome. The barriers were identified by studying seven case studies, carried out for Germany (German National Welfare Index), the UK (British Business Bank and Welsh Government Sustainable Indicator Set), Midi-Pyrenees in France, Rotterdam (Sustainability Profile), Chrudim in the Czech Republic (Healthy City Indicators) and at the OECD. 

Barriers

From the case studies, twelve different types of barriers were identified and grouped under five categories: resources; resistance; communication; complexity; organisation. 

Resource constraints

Under this category, two main barriers were identified. Firstly, many countries, regions and cities face budget limitations when it comes to statistics and introducing alternative indicators. Secondly, data is not available in many cases, or it is limited to a certain timeframe or geographical coverage. 

Resistance

The project found a passive resistance to the use of alternative indicators in many of the studied areas, due to perceived norms, habits and risk aversion. For example, many policy-makers, who in theory would support the use of alternative indicators, take a more conservative view. This is due to the fact that the existing traditional models are considered more robust and well-established. As a result, Beyond-GDP indicators are often considered redundant by politicians and business organisations. 

Communication

Since there is no agreed practical consensus on Beyond-GDP indicators, the variety of options results in divergence or sometimes even in contrasting ideas. Thus, there is confusion about the concepts and terminologies used among different stakeholders. Sometimes, this also means that incorrect assumptions are associated with alternative indicators, from either politicians or businesses. In addition, the project found that a strong narrative for engaging the public is also often missing.

Complexity

The lack of a single Beyond-GDP indicator not only results in communication barriers,but also makes it difficult to replicate the simple headlines, which are currently linked to GDP measures. Similarly, while GDP indicators can offer a simple narrative, the variety of Beyond-GDP measures makes it more complicated to describe and analyse progress towards well-being.

Organisation

Lastly, several constraints were identified by the project in terms of institutional take-up. The potential users of alternative indicators are reluctant and sceptical in many cases. Due to the complexities of the well-being topic, interlinkages must be considered, inducing the need for working across departments and organisations. A lack of inter-institutional human capacity was also identified as a potential barrier. 

Overcoming the barriers

In order to overcome some of the aforementioned barriers, the BRAINPOol project suggests: to demonstrate how Beyond-GDP indicators can result in more informed policy choices; to promote these indicators at different fora; to develop a database of such indicators; to identify potential users and tailor the indicators to their needs; to develop facilitation mechanisms for internal and inter-organisational co-operation; and lastly, to invest in human resources.

The project also suggests that, first, two key barriers should be tackled head-on: We need to create a strong narrative for alternative indicators and new techniques for integrated policy analysis.

The full report is available at the project website: Barriers to the use of alternative (‘beyond GDP’) indicators in policy making and how they are being overcome and can be overcome 

- Dora Almassy

See Also:

BRAINPOol

Beyond GDP

Characterizing Demand for 'Beyond GDP'

Review report on Beyond GDP indicators: categorisation, intentions and impacts

A roadmap that goes beyond ‘growth’?

This blog is by Alistair Whitby, Senior Policy Officer at the World Future Council which works with 7 other partners on the BRAINPOol project. 

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.

Where is the Demand for Beyond GDP Indicators?

This blog by Saamah Abdallah, nef (the new economics foundation) profiles the recent report by BRAINPOoL*, Characterizing Demand for ‘Beyond GDP’. This article is part of the Wikiprogress series on Statistics and Data.

Where is the demand for Beyond GDP indicators? 

Which actors are interested in using such indicators and how do they want to use them? 

How might a societal demand for these indicators be understood? And, when there is a lack of demand, what factors explain it? 

These are the questions that are posed and answered in a recent report by BRAINPOoL, the EU funded project on bringing alternative indicators into policy. The presentation below provides a summary of the report.  Whilst there are some greenshoots emerging, it does highlight the many challenges faced by promoters of alternative indicators in terms of getting them to be use in the policy process.

Where is the demand for ‘Beyond GDP’ indicators? from Wikiprogress_slides

Saamah Abdallah

*BRAINPOol (Bringing Alternative Indicators into Policy) is a consortium of European partners with the aim of influencing policy makers to consider indicators for well-being and progress alternative to GDP. It was formed in 2010 following a push for further engagement in a beyond GDP society, and is funded by the European Commission’s 7th Framework Program. 

Read the report - Characterizing Demand for ‘Beyond GDP’