The Australian Economic Review, vol. 46, no. 1, pp. 78–91
Policy Forum: The Measurement of Well-Being
Measuring the Kind of Australia We Want: The Australian National Development Index, the Gross Domestic Product and the Global Movement to Redefine Progress
Mike Salvaris*
Abstract 1. The Real Wealth of Nations
There is a growing global movement to re‐ Too much and for too long, we seemed to have define progress beyond gross domestic product surrendered personal excellence and community values in the mere accumulation of material things. (GDP) and develop new measures of equitable Our Gross National Product, now, is over $800 billion and sustainable well‐being. GDP’s shortcom- dollars a year, but that Gross National Product – if we ings as the chief measure of societal progress judge the United States of America by that – that Gross have been clearly exposed, but it is still widely National Product counts air pollution and cigarette used in this role, with increasingly adverse advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the consequences. This article examines the les- jails for the people who break them. It counts the sons from this global movement and the destruction of the redwood and the loss of our natural technical and democratic requirements for wonder in chaotic sprawl. It counts napalm and counts developing new national progress measures. nuclear warheads and armored cars for the police to fi ’ fl It focuses on a new Australian project, the ght the riots in our cities. It counts Whitman sri e and Speck’s knife, and the television programs which Australian National Development Index, which glorify violence in order to sell toys to our children. Yet will develop a composite index of national the Gross National Product does not allow for the progress and key progress ‘domains’ through health of our children, the quality of their education or a national community engagement process the joy of their play. It does not include the beauty of supported by a cross‐disciplinary research our poetry or the strength of our marriages, the intelligence of our public debate or the integrity program. of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. [Kennedy 1968]1
In a famous speech just months before he was assassinated, Robert Kennedy argued that the real wealth of a nation is not its economic output alone. Rather, it is the well‐ being, skills and wisdom of its people, the values and qualities of its society, the vitality * Applied Human Rights and Community Wellbeing, and integrity of its culture and institutions RMIT University, Victoria 3000 Australia; email
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Published by Wiley Publishing Asia Pty Ltd Salvaris: Measuring the Kind of Australia We Want 79
The underlying question that Kennedy Keynes (1931) argued to a similar effect, posed—What is true progress or well‐being although without explicitly advocating a for a society?—is in fact a very old one, ‘steady‐state’ economy or rejecting a continu- debated for thousands of years in many ously growing economy. He believed that, at a civilisations. Yet, despite differences of lan- certain point, common agreement will be guage, culture and history, it is surprising how reached on what he regarded as the secondary often the same themes have recurred over the or instrumental ‘problem’ of how to operate an ages: Is progress primarily about individual or economy for the benefit of society, which could collective development? Is it the ‘destiny’ of then apply its attention to higher order problems humankind or merely an enlightened possibil- such as culture and human relations. Smith ity? Is it a necessary consequence of political (1776) argued for limits to economic growth or economic power? (see, for example, Bury from a somewhat different perspective. He 1920; Nisbet 1980; Salvadori 2008; Salvaris believed that the population growth generated 2010). by economic growth might start to produce Perhaps, the most venerable question of all is negative impacts on human progress and this: How far does true progress (or well‐being quality of life, such as depressed wages and or ‘the good life’) consist of an increase in depleted natural resources.2 On the basis of material wealth and living conditions, rather these views, all three might have made than qualitative improvements, such as in common cause with the Club of Rome and wisdom, happiness, justice, peace, spiritual latter‐day economists and environmentalists and cultural well‐being, or merely ‘a balanced like E. F. Schumacher, Kenneth Boulding, life’? This problem has preoccupied especially Nicholas Georgescu‐Roegen, Manfred Max‐ philosophers in all ages and cultures. Aristotle’s Neef, Herman Daly, Donella Meadows, John (1952, p. 341) memorable aphorism ‘Wealth is Cobb, Hazel Henderson, Paul Hawken, Robert evidently not the good we are seeking, for it is Costanza and Tim Jackson. merely useful and for the sake of something Ultimately, though, the meaning of progress else’, had its counterpart in Confucian and early for any given society is not just a philosophical Islamic thinking and its echo 2,000 years later or an economic question. It is a matter of intense in John Ruskin. ‘That country is the richest public, practical and democratic concern. which nourishes the greatest number of Throughout history, the idea of ‘progress’ has noble and happy human beings’ Ruskin and been a powerful political driver, which carries Rosenberg (1980, p. 270) and in Amartya Sen with it a sense of inevitability and national (see Nussbaum and Sen 1997) and Robert destiny (see Salvaris 1998). The way that Kennedy in our own times. progress is officially defined and measured in It is a question that has also engaged some any society—and by whom—has direct con- thoughtful economists, in this form: Is con- sequences, not just for national policies and tinuous growth in the economy a necessary pre‐ public debate, but most importantly for the condition of human and social progress? Adam actual outcomes and life chances of ordinary Smith, John Stuart Mill and John Maynard citizens. In a truly democratic society, there- Keynes, all in their different ways, argued for a fore, citizens have the right, and the duty, to shift from quantitative economic growth to participate in defining the goals and priorities— quality of life, not only because of resource and hence the broad directions of progress—for limits or physical laws but also on ethical and their society. social grounds. Mill (1848) argued that the economy would 2. Is Gross Domestic Product (GDP) an 3 reach a certain point of size or efficiency at Obsolete Measure of Progress? which it would become stable and regenerative In a world divided by religion, politics, and culture, there and not need to grow any larger; at this point, is at least one thing that unites us. From Washington to men would be free to concentrate on more Pyongyang, Bombay to Berlin, Mecca to Rome, govern- important aspects of moral and social progress. ment and business the world over worship this one thing
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with absolute devotion. Legions of acolytes track its one is prepared to argue that producing and progress and prophesize its future course, believing consuming goods and services in a market wholeheartedly that growth in this thing is the road to salvation, and decline in it the path to damnation. This economy represents the highest form of human thing is a number. The number is Gross Domestic progress or societal good. This seems, at best, a Product. strangely hollow and reductionist view of the [Butler 2004] richness and diversity of human life and the possibilities of cultural and societal develop- For nearly 60 years, GDP has been the ment as noted by thinkers through the ages. It world’s most recognisable and influential shrinks the notion of social progress to one measure of the overall progress of nations. simple equation: ‘life equals shopping’. How did this come about, when on its face, it Criticisms of GDP as the single or principal seems unsuited for the purpose? measure of societal progress have been gather- GDP is usually defined as: ing from many different directions over the past 50 years. Some focus on its narrow scope and fi the total market value of all nal goods and services methodology, others on its implicit social produced in a country in a given year, equal to total consumer, investment and government spending, plus rationale: that the progress of society is best the value of exports, minus the value of imports. achieved, and most other problems can be [OECD 2008a, p. 236] solved, by continuous growth in the production of goods and services in a market economy. From this definition and as a matter of logic Some of these criticisms may reflect a alone, it is difficult to see how GDP could itself misunderstanding of the original (and limited) constitute a satisfactory measure of the ‘overall purpose of GDP, but others more justifiably progress of society’. target the knowing misuse of GDP. A sample of The concept of societal progress, by even the these criticisms includes the following: most parsimonious definition, is complex and multi‐faceted. It necessarily includes social, ‘(Economic) growth is not an end in itself, environmental and governance dimensions, as but rather an instrument for creating better well as economic. It embraces both the material conditions of life.’ (Ministerial Council of and non‐material aspects of individual well‐ OECD, quoted in OECD 1982, p. 7). being, such as income and health, on one hand, and relationships, culture and meaning on the ‘GDP is not an appropriate metric of other. It must take account of the advancement progress. It includes economic activities of societal values (such as justice) and the that can reduce well‐being (see, for example, proper functioning of societal systems and production and consumption of “goods” with institutions (government and the economy), as negative impact on human health and natural well as the health of larger enabling systems environment). It does not include all avail- such as the ecology. Finally, true progress must able resources (in particular the resources of be sustainable (that is, able to benefit future households). It excludes several important generations). factors of well‐being (health, education, Certainly, economic production is reason- working conditions, equity, time use, social ably considered an important ingredient in the relations, social cohesion, citizenship etc.). It wider picture of societal progress and a key ignores essential factors of sustainability of means to material well‐being. On this account, well‐being (see, for example, environmental, GDP could be claimed as a necessary measure human and social capital).’ (Suarez de of progress, but not a sufficient one, because Miguel 2010, p. 13). economic production does not axiomatically contribute to broader societal well‐being. This ‘We put too much emphasis on measuring will depend, for example, on what is produced what we produce, principally through GDP, and in what manner and how the benefits are and not enough on assessing our well‐being distributed. Nor is it an end in itself, unless and progress. Too many important policy
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decisions are taken with GDP as the main (which) reflect a society’s values and goals and measurement rod. GDP takes no account of become the key drivers of economic and the productive activity which occurs at home technological choices’ (Henderson 1996) and […] We need new indicators that measure because GDP is presented as a single un- what we value as a society. We need to raise ambiguous index of success or failure, whose living standards and confidence, not just regular release can uplift or cast down GDP.’ (Gurría 2010, p. 2). politicians and editorial writers alike. The GDP today is ‘a celebrity among statistics, a ‘GDP cannot distinguish between growth (an giant calculator strutting about adding up every increase in quantity) and development (an bit of paid activity’ (Uchitelle 2008). improvement in quality).’ (Harris and Burns There is, unfortunately, ample evidence to 2004, p. 1). suggest that GDP has been, and will continue to be, knowingly misused. Gittins (2011) said ‘Endless growth is impossible in a finite that: world and cannot be clung to as the measure of success of our economic system.’ (David When you argue that GDP is a poor measure of national Suzuki, quoted in Australian Conservation well‐being and point out its various limitations, the Foundation 2011, p. 11). economists will agree. But that will not stop them continuing to treat GDP as though it is the one thing that matters. ‘Citizens rightly consider that the main purpose of political action is to improve Given the prestige and power which GDP ‐ present and future well being. Increased confers upon its acolytes and interpreters, it production of goods and services, as meas- seems that it is simply too tempting to continue ured by the GDP growth rate, is only an benefiting from a flawed measure, rather than intermediate target. Economic growth may trying to fix it. fi well be necessary, but it is not suf cient for This might help explain why, with some ’ ’ society s progress. (European Statistical honourable exceptions, most of the pressure to Commission 2012, p. 10). correct GDP and develop new and better measures of societal progress has not come It is a great historical irony that no one was from economists. In the frank assessment of more aware of the limitations and the potential a senior Australian Treasury officer, David for misuse of the GDP than its chief inventor. Gruen: For Simon Kuznets, American economist and Nobel Prize Laureate, GDP was never intended Economists and statisticians have long known that GDP as a measure of overall social well‐being. is not, and was never intended to be, a measure of well‐ Kuznets famously remarked that ‘the welfare of being or progress. While we have long known its a nation can scarcely be inferred from a limitations, we as a discipline have not done enough to measurement of national income as defined discourage its use in inappropriate places. In fact, we ’ arguably, if inadvertently, do much to promote GDP as a by the GDP . Nor was growth itself necessarily measure of progress. a good thing, he said: ‘Goals for “more” growth [see Tandon 2010] should specify growth of what and for what’ (Kuznets 1934, p. 7). Nordhaus and Tobin (1972, p. 4) said much Yet despite this clear warning, and by default the same 40 years earlier: over many years, GDP has come to be used as the key measure of national progress and GNP (gross national product) is not a measure of political success, especially by politicians and welfare. Maximization of GNP is not a proper objec- economists. Certainly, when used in this way, it tive of policy. Economists all know that, and yet — their everyday use of GNP as the standard measure has had tremendous political power all the of economic performance apparently conveys the more potent in a world where statistics have impression that they are evangelistic worshippers of become ‘the structural DNA codes of nations GNP.
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Even so, there have been some significant aggravating two current world crises, climate interventions against GDP by mainstream change and the Global Financial Crisis, and if economists. In 1995, 400 leading American not corrected, they would continue to contrib- and Canadian economists, including Nobel ute to poor policy decisions: laureates, issued a joint statement supporting an alternative measure to GDP. They argued that: What we measure affects what we do: if our measure- ments are flawed, decisions may be distorted […] one of the reasons that the (Global Financial) crisis took many … [ ] since the GDP measures only the quantity of market by surprise is that our measurement system failed us […] activity without accounting for the social and ecological Choices between promoting GDP and protecting the costs involved, it is both inadequate and misleading as a environment may be false choices, once environmental ‐ measure of true prosperity. Policy makers, economists, degradation is appropriately included in our measure- the media, and international agencies should cease using ment of economic performance […] The time is ripe for the GDP as a measure of progress and publicly our measurement system to shift emphasis from acknowledge its shortcomings. New indicators of measuring economic production to measuring people’s progress are urgently needed to guide our society. well‐being. And measures of well‐being should be put in [Colman 2010, p. 4] a context of sustainability. [Stiglitz, Sen and Fitoussi 2009, pp. 7, 12, 18] Perhaps, the most authoritative critique of GDP by eminent economists was delivered in Finally, and perhaps unexpectedly, for an 2009 in the lengthy report of the International expert technical report, Stiglitz and his panel Commission on the Measurement of Economic unambiguously argued for the democratic Performance and Social Progress (see Stiglitz, principle that new progress measures de- Sen and Fitoussi 2009). This Commission, set manded a community debate around the world. up by then French President, Nicolas Sarkozy, included amongst its 25 members five Nobel fi 4 3. The Global Movement to Rede ne Prize winners in Economics and was chaired Progress by Professor Joseph Stiglitz. Its final report was a comprehensive dissection of the failings of Over the past 10 years or so there has been an explosion GDP as a measure of both social progress and of interest in producing measures of societal progress […] that go beyond GDP to represent a broader view of economic performance. the ways in which societies are progressing and As an economic measure, the Commission regressing […] Initiatives to do just this are being run argued, GDP is deficient on four counts: (i) it in many countries rich and poor […] by governments, by fails to take account of increases in quality and civil society, by academics and the private sector […]A productivity; (ii) it allows grossly inflated price world movement is emerging and the linkage between statistical indicators, policy design and democratic reporting for some key market transactions (that assessment of the performance of a country (a region, is, shares, financial); (iii) it misreports the a city etc) is at its core. ‘product’ or ‘added value’ of some key [OECD Statistics Directorate 2008] components of the economy (such as public health and education, which it simply values at The hegemony of GDP as a social progress input cost); and (iv) it fails to provide a ‘balance measure is now being challenged by a new sheet’ of assets and liabilities or report the global movement. The origins of this move- overall sustainability of the economy (that is, it ment are diverse and date back at least 40 years. takes no account of growing debt and shrinking Some of the key drivers include: the environ- resources), something that is essential in the mental movement and the Club of Rome; the basic accounting of any business. women’s movement and its focus on the unpaid Most tellingly, Stiglitz, Sen and Fitoussi domestic economy; the United Nations Devel- made the point that these are not theoretical opment Programme and the Human Develop- problems, but have serious practical conse- ment Index of the 1970s; the Kingdom of quences for both economic performance and Bhutan and its Gross National Happiness social outcomes. The reporting failures of GDP, program, from the early 1980s; the local they argued, played some part in generating or community planning movement; Canada’s
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Salvaris: Measuring the Kind of Australia We Want 83 pioneering community‐research project, the established in 2009. The Pittsburgh Summit of Canadian Index of Wellbeing (CIW), begun the Group of Twenty Finance Ministers and in the 1990s; ‘triple bottom line’ business Central Bank Governors called for work on management; and the growth of happiness measurement methods that ‘better take into research in psychology. account the social and environmental dimen- For many years, these various projects and sions of economic development’ (G20 2009). movements had mostly developed apart, de- The UN General Assembly held a special spite a shared concern about the inadequacies of workshop and then passed a unanimous GDP. However, in 2004, a significant catalyst resolution in 2012 on incorporating happiness and unifying force emerged in the Organisation and well‐being measures into development for Economic Co‐operation and Development’s programs. (OECD’s) global project, ‘Measuring the This year, the United Nations Secretary‐ Progress of Societies’, led by Italian economist General’s High‐Level Panel on Global Sustain- and statistician, Enrico Giovannini. This proj- ability (2012, pp. 64–5) called for a common ect was specifically designed to create a global global framework for measuring progress: platform to bring these different elements together and to promote a global debate about While material prosperity is important […] it is a long ‐ … the meaning of progress ‘beyond GDP’, not just way from being the only determinant of well being [ ] purely economic indicators say nothing about whether its measurement. In 2007, these goals were material well‐being is bought at the expense of formally agreed in a joint declaration by the environmental and social impacts or at the risk of OECD, the United Nations (UN), the European putting undue stress on natural resources. Commission and the World Bank at the OECD World Forum in Istanbul.5 National initiatives to develop new social The OECD has pursued these goals with progress measures are now in place in countries energy and flair. Initiatives have been launched including Australia, Germany, Italy, Ireland, and workshops convened in all global regions. Japan, Korea, New Zealand, Slovenia, Spain, Four World Forums since 2004 (in Italy, Thailand, United Kingdom and United States.7 Turkey, South Korea and India) have each At the sub‐national level, community, local and attracted up to 1,500 participants. Much has regional initiatives around well‐being, quality been done to raise awareness and change of life or sustainability measurement systems attitudes concerning, for example, ‘the growing now number in the hundreds.8 gap that exists between the image conveyed by official macro‐economic statistics such as GDP, 3.1 Lessons and Implications from the and the perceptions of ordinary people about Global Movement their own socioeconomic conditions’ (OECD 2011). Research networks have been set up (the In the unfolding of a global movement, what ‘Global Progress Research Network’), a major began as a statistical problem has been global internet platform and knowledge base gradually transformed into a set of fundamental has been developed (‘Wikiprogress’) and a new questions about the nature of progress in the progress measurement framework has been twenty‐first century. These questions have built (the ‘OECD Better Life Index’).6 become steadily more urgent and insistent Following this lead, other international under the pressure of global problems such as initiatives have been moving in the same climate change and the world financial crisis. direction. The European Union launched its Now, after nearly a decade of intensive long‐term ‘Beyond GDP’ project in 2007. The activity and at many different levels of World Economics Forum set up a Global community and society, it is possible to identify Council initiative on ‘Benchmarking the Prog- some of the key lessons and agreements from ress in Societies’ in 2008. The International this global movement. They are spelt out in Commission on the Measurement of Economic many reports and conference declarations and Performance and Social Progress (above) was in a growing number of research projects and
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research 84 The Australian Economic Review March 2013 international collaborations reviewing broader be best understood and applied in practice developments, comparing case studies and (that is, ‘mainstreamed’). evaluating best practice (some important examples include Bertelsmann Foundation The last point of agreement is the least 2013; European Union 2012a, 2012b; New charted. What are the practical implications of a South Wales Parliamentary Research Office ‘new paradigm of progress’ and of entrenching 2012; U.S. Government Accountability Office new national progress measures? How could 2012). they be put into effect? What would it mean for From these diverse sources, consensus government planning and policy making? For can generally be identified on six basic the economy? For public debate? For the propositions: expectations of citizens? Even for the nature of our current politics? The potential costs may (i) The GDP, despite its value as measure of be significant and the effects far‐reaching, market economic activity, is an inadequate but so too, in the longer term, might be the measure of societal progress, and perhaps benefits. even of economic well‐being, and persist- The fact that governments and policy makers ing in using it as such will have negative are beginning to take these questions more impacts on economic and social progress. seriously is itself another positive trend in the global movement. The policy implications of (ii) Societies need to develop better and more major changes in the key measures of national integrated (‘holistic’) measures of their progress, including economic planning and progress; at a minimum, these should take redistributive impacts, are being noticed and account of five inter‐dependent domains of discussed.9 Some of these are already clear: a broad societal progress, well‐being and shift from production to emphasise equitable sustainability: economy, society, culture, and sustainable well‐being; a greater focus on environment and governance. the factors which create well‐being and good communities; the use of indicators and indices (iii) Better measures of progress must take into as a positive evaluation and planning tool; and account qualitative and not just quantita- the involvement of citizens and therefore the tive dimensions of progress, such as use of indicators as a democratic engagement subjective well‐being, community belong- device. ing, relationships, life satisfaction and Finally, one other form of convergence is happiness. underway which may, in the long run, prove the most powerful driver of the global movement. (iv) The underlying problem we are facing may This can be described as a kind of ‘cultural’ or not be the wrong measure but the wrong ‘model’ convergence: the movement towards a model of societal progress and a better common global ‘measuring progress’ model model of true progress than ‘increasing and agenda by four models, each with different economic production’ would be ‘increas- purposes and cultural origins: ing equitable and sustainable well‐being’. the essentially European, ‘positivist’ (that is, (v) Developing a new progress paradigm and primarily policy‐ and statistics‐driven) new measures is, in part, a civic and model, represented by the ‘Beyond GDP’ democratic task that requires the engage- and OECD approach; ment of citizens, working with academics, scientists and policy makers. the UN Millennium Development Goals, with indicators specially calibrated to a (vi) People and governments now urgently limited number of essential development need to consider the implications of these targets for the world’s poorest countries, new progress measures and how they can rather than a general ‘progress’ model;
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the broader global movement for ‘sustainable initiative, the ABS became the first national development’ and the development of sus- statistical organisation in the world to develop a tainable development goals and indicators;10 framework which acknowledged the limita- and tions of GDP as a measure of societal progress and sought to combine economic, social, the influential ‘Gross National Happiness’ environmental and democratic dimensions of model, with its Buddhist emphasis on well‐ progress. The MAP itself was to become the being, cultural development and balance key stimulus for the OECD’s global project, (exemplified by national projects of Bhutan ‘Measuring the Progress of Societies’, launched and Thailand). in 2004. In 2012, after continuous revision and innovation, MAP remains a global leader This convergence has been accelerated among national statistical offices. chiefly by two factors, from within and without. Over these two decades, a wide range of External pressures noted earlier (climate progress measurement initiatives has been change, the world financial crisis and growing developed across Australia, from neighbour- global inequalities) have all served to highlight hood and municipal to regional, state and the defects of GDP and the need for better national levels. Some of the best‐known progress measures. At the same time, increas- examples are: Tasmania’s20‐year community ing interaction and dialogue between the planning project, ‘Tasmania Together’,12 and protagonists of the four models through the South Australia’s Strategic State Plan13 (both of global network and shared platforms has which have developed comprehensive meas- brought increasing recognition of their com- ures of state progress, well‐being and sustain- mon ground. ability, based on community input); and Community Indicators Victoria,14 a community 4. Australia’s Role and the Australian progress and planning framework for 79 local National Development Index Project governments, cited by the OECD as a global model. Australia has played a significant role in the global movement and shares many of the 4.1 The Australian National Development concerns which drive it. We now have quite a Index long tradition and a wide spread of innovative work on measuring progress and well‐being at In May 2010, a major citizens’ initiative to different levels of government and society, develop a new national index of progress was supported by a strong academic and research launched: the Australian National Develop- base. We are also confronted with the same ment Index (or ANDI).15 It will be based on an kinds of problems and challenges in defining, extensive national community and research measuring and planning our future societal program that addresses the question: ‘What progress as many other OECD countries. kind of Australia do we want?’ Twenty years ago, the Australian Senate The Australian National Development Index instituted an inquiry into a new system of is a direct product of the 20‐year history of re‐ measuring national progress (Senate Legal and defining progress work in Australia. Its imme- Constitutional Committee 1995, 1996). Four diate progenitors were the Victorian health years later, the first national, cross‐disciplinary promotion agency, VicHealth (a long‐time conference on measuring progress was con- supporter of the development of new national vened in Canberra in 1997.11 In 1999, and well‐being indicators), and the national ‘Ideas partly as a result of that conference, the Summit’ that was convened in 2008 by then Australian Bureau of Statistics (ABS) under Prime Minister, Kevin Rudd. At the Summit, new Australian Statistician, Dennis Trewin, one ‘big idea’ which attracted extensive support began to develop its pioneering ‘Measures was ‘a national index […] to measure Austral- of Australia’s Progress’ (MAP). With this ia’s economic, social and environmental
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research 86 The Australian Economic Review March 2013 progress’, based on ‘engaging with the com- forums; video and film projects and school munity in discussions about what is important programs. for progress and development’ (Department of The Australian National Development Index Prime Minister and Cabinet 2008, pp. 173, will also aim to build a national network and 180). resource base for the growing national move- The Australian National Development Index ment to develop community well‐being meas- is a coalition of 50 Australian non‐government ures at local, state and national level and to organisations representing a diverse range of become a participant in the OECD’s global community interests and expertise, supported project, ‘Measuring the Progress of Societies’. by a team of universities. Partners range from An early priority will be to develop a high‐ trade unions and business groups, churches and quality and community‐friendly website linked local governments to environmental, social to the global project’s Wikiprogress site and welfare, human rights and youth organisations. a national education and communications It will also have some government partners, but program. funding and governance will be predominantly In structure and funding, ANDI is modelled community based.16 on the CIW, now in its 10th year and an The Australian National Development Index acknowledged world leader.19 The CIW has aims to be ‘a strong national voice’ in support of agreed to ‘partner’ the Australian project, an the ‘paradigm shift’ now being urged around arrangement which ANDI’s developers hope the world—to redefine progress, from increased will bring mutual benefits through the exchange economic production to equitable and sustain- of ideas, people and practices. able well‐being. Taking the advice of the The Australian National Development Index OECD17 and the International Commission also envisages a strong complementary rela- on the Measurement of Economic Performance tionship with the ABS. It will support MAP by and Social Progress,18 it will aim to promote a drawing on MAP’s key data and its new ‘MAP broad national debate about what progress 2.0’ measurement framework and feeding means to Australians in the twenty‐first century back the priorities identified by the ANDI’s (‘What kind of Australia do we want?’) as a pre‐ community discussion; this in turn should requisite to the development of new measures strengthen ABS’s plans for the future develop- and indices of national progress: ment of MAP 2.0.20 The ANDI’s use of indices will complement the ‘dashboard approach’ ANDI is a community initiative to revitalise our used in MAP. democracy and engage all Australians in a national debate about our shared vision for Australia. Based on 4.2 Progress Domains and Composite the idea of an ongoing national conversation about what kind of society we want to be, (ANDI) will develop clear Indices ongoing measures of our progress towards that vision: an Australian National Development Index. The Australian National Development Index’s [Allen Consulting Group 2012, p. 3] national progress index will be built around 12‐ key ‘domains’ of progress (subject to their It is this feature which perhaps sets ANDI confirmation by the community and research apart most clearly from projects aimed merely process): children’s and young people’s well‐ at statistical innovation. It is intended as a civic being; community and regional life; culture, process and the scale of its aims here are recreation and leisure; governance and democ- ambitious. It proposes to undertake a 2‐year racy; economic life and prosperity; education, national community engagement program that knowledge and creativity; sustainability and the will directly reach half‐a‐million Australians, environment; health; Indigenous well‐being; using a comprehensive array of participatory justice, fairness and human rights; subjective platforms and techniques: social media and well‐being and work and work life. GetUp!‐style campaigns; online and formal Each ‘progress domain’ will be supported by surveys; town meetings and local government a group including research, community and
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Salvaris: Measuring the Kind of Australia We Want 87 policy interests and will develop a ‘domain 2008; European Union 2008; Hoskins and index’ aggregated from perhaps a dozen Mascherini 2009). leading indicators. Each domain index will be The Australian National Development In- released annually, but in a different month. It is dex’s national progress index will be developed hoped that this will enable a continuous carefully and transparently and mindful of these discussion in the media and the public sphere difficulties. In the end, this need not be an about the quality of Australian life and what ‘either/or’ argument: an index and a dashboard Australians believe are the priorities for approach (using multiple ‘leading’ indicators) national progress. The Australian National are not mutually exclusive, but indeed can Development Index’s key research partner complement each other. An index is a valuable will be the Australian Council of Learned means to attract publicity (with journalists and Academies, the national peak group represent- politicians especially) but it also is a natural ing Australia’s outstanding scholars and re- ‘door‐opener’: a vehicle to create interest in the searchers across all universities and disciplines. underlying indicators that caused the overall The development of composite indices to index to move. Just like the GDP. measure broad phenomena, such as social progress, is expected to be complex and 5. Citizens’ Progress Measures: controversial, but nonetheless such indices A ‘Reassertion of Democracy’? are in wide use globally. A recent report by the United Nations Development Programme We are facing both an opportunity and a duty to rethink what progress really means and to build stronger and lists 178 indices on subjects ranging from child more inclusive visions for the future of our societies. development and social disadvantage to human Citizens are looking for new ways to improve their lives. rights, democracy and happiness (see Bandura We need committed citizens, scientists and well‐ 2008). Statisticians are wary of indices, but they informed leaders ready to engage the whole of society … still use them: the ABS’s Socio‐Economic in an assessment of the challenges ahead [ ] We have to move towards measuring welfare not just output. It will Indexes for Areas is such a case. The most constitute a major contribution to stability and democ- common objections tend to be on methodo- racy. logical grounds: for example, that there is no [Gurría 2009] reliable means to compare different units of measurement or to weight the different From a policy perspective alone, the poten- components. It is also argued that a single tial benefits of developing clear national number hides the complex differences and progress measures are substantial. They can movements of the component indicators or improve governance and public debate in a obscures what may be a skewed distribution number of ways: clearer policy and planning and so, in either case, can give the wrong policy goals, better evaluation of success and a more signals. clearly defined and shared ‘vision’ that can Index supporters argue that a single number provide a concrete starting point for debate and is a powerful means to attract attention and that policy development. there are sound statistical methods to overcome However, as we have seen, there is a growing the technical problems, such as Z‐scores to realisation that this is not purely a policy or a standardise measurement scales and commun- technical issue. It is also a democratic issue. ity preference surveys to guide weightings. New progress measures will guide public Four recent European papers support the idea of policy and debate, just as the old ones did, a composite index to measure concepts, such as and so will directly influence the distribution of well‐being, sustainability and democracy opportunities and life chances in a society. (although with some qualifications), and pro- Citizens need to be engaged, for at least two vide clear suggestions as to how the methodo- reasons. First, because it is ultimately the logical issues can be tackled (see Nardo et al. responsibility of citizens in democracies to 2005; Commission on the Measurement of decide the broad goals and priorities of their Economic Performance and Social Progress communities, to which any sensible notion of
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research 88 The Australian Economic Review March 2013 progress must be directed. Second, because approach the limits of its effectiveness’ (see
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Salvaris: Measuring the Kind of Australia We Want 89 striving for what is important.’ (Stiglitz, Sen and Fitoussi Eckersley, R. (ed.) 1998, Measuring Progress: 2009). Is Life Getting Better?, CSIRO Publishing, 19. See
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research 90 The Australian Economic Review March 2013
Hoskins, B. L. and Mascherini, M. 2009, ress of Societies: What Is the Relevance for ‘Measuring active citizenship through the Asia and the Pacific?, OECD, Paris. development of a composite indicator’, Social Organisation for Economic Co‐operation and Indicators Research, vol. 90, pp. 459–88. Development 2011, Global Project Update, Kennedy, R. 1968, Address, University of viewed July 2011,
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development’, presented to project on United Nations Secretary‐General’s High‐ ‘Measuring Progress of the Arab Societies’, Level Panel on Global Sustainability 2012, 1st Coordinators’ Workshop on Measuring Resilient People, Resilient Planet: A Future the Well‐Being and Progress of Arab Worth Choosing, United Nations, New Societies, Beirut, 1–5 November. York. Tandon, S. 2010, ‘Treasury admits GDP used United Nations World Commission on Envi- inappropriately’, ABC Radio, 17 September. ronment and Development 1987, Our Com- Uchitelle, L. 2008, ‘Economists look to expand mon Future: Report of the World GDP to count quality of life’, New York Commission on Environment and Develop- Times, 1 September, viewed December 2012, ment, Oxford University Press, New York.
°C 2013 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research