Thursday, May 26, 2011
Measuring National Happiness
Who said economics was the dismal science?
Nearly three years ago Jigme Singye Wangchuck, the fourth King of Bhutan, inaugurated his Gross National Happiness Index instead of the more common gross domestic product to measure social, economic and political changes in his isolated Himalayan Shangri-la.
Now the 34-nation Organization for Economic Cooperation and Development – the OECD – seems to have bought into the idea. Earlier this week, the Paris-based OECD announced it was inaugurating its own interactive Your Better Life Index as part of a "larger OECD Better Life Initiative that measures well-being and progress."
If both of them sound frivolous, they're not. Given escalating ferment in many countries – with rapidly-improving China, for instance, still recording as many as 300,000 incidents of social unrest involving more than 15 people annually, economists are searching for new metrics to gauge well-being beyond gross domestic product, defined as the total value of a country's annual output of goods and services at market prices, excluding net income from abroad.
The current Economist magazine web debate series asks whether " new measures of economic and social progress are needed for the 21st-century economy" and invites readers to join the debate.
Richard Layard, Emeritus Professor of Economics at the London School of Economics, argues in the series that "Our future policies must be based on serious evidence about their effects. This applies to health care, education, family policy, social care, employment and welfare benefits. It is not enough to say ‘let democratic politicians decide' unless we provide them with the tools."
The OECD's index, according to the news release, hasn't assigned rankings to individual countries. Rather, the site is designed to allow readers to investigate how each of the 11 topics contributes to well-being – whether housing is more important than the environment. Visitors to the site are allowed to build their own indexes, then click "Share this index" to extend the debate.
The index, the website says, "allows citizens to compare lives across 34 countries, based on 11 dimensions -- housing, income, jobs, community, education, environment, governance, health, life satisfaction, safety and work-life balance -- giving their own weight to each of the dimensions." Each of the 11 dimensions has two to three separate indicators.
"Your Better Life Index is designed to let you visualize and compare some of the key factors – like education, housing, environment, and so on – that contribute to well-being in OECD countries," according to the organization's press section " It's an interactive tool that allows you to see how countries perform according to the importance you give to each of 11 topics that make for a better life."
Those indices sound strikingly like the Bhutanese king's GNH indicators, which have been designed to include "nine core dimensions regarded as components of happiness and well-being." They were "selected on normative grounds, and are equally weighted, because each dimension is considered to be relatively equal in terms of equal intrinsic importance as a component of gross national happiness."
Bhutan's nine indicators include psychological wellbeing, time use, community vitality, culture, health, education, environmental diversity, living standards and governance. Each of these is then broken down. Psychological wellbeing, for instance, include general psychological distress indicators, emotional balance indicators, and spirituality indicators. The community vitality indicators consist of a family vitality indicator, a safety indicator, a reciprocity indicator, a trust indicator, social support indicator, socialization indicator and kinship density indicator.
The Your Better Life Index, according to the OECD, encapsulates the OECD'S role in "pushing the boundaries of knowledge and understanding in a pioneering and innovative manner," said OECD Secretary-General Angel Gurría in a prepared statement. "People around the world have wanted to go beyond GDP for some time. This index is designed for them. It has extraordinary potential to help us deliver better policies for better lives."
Certainly, Jigme Singye Wangchuk himself appears happy enough now. He prescribed democratic government for his 800,000-odd subjects, abdicated in favor of his Oxford-educated son, Jigme Khesar Namgyel Wangchuck, in 2008, and got out of the game. The son last week announced his engagement to an exotically beautiful fiancé. Muammar Khadafy, take note.