STUDY Measuring Progress and Well-Being Achievements and Challenges of a New Global Movement CHRISTIAN KROLL October 2011 The current debate on measuring progress and well-being is rapidly gaining in im- portance throughout the world. Efforts to this end have the potential to bring about a real paradigm shift concerning what we as a society consider to be progress and how, as a consequence, we will shape how we live together. Case studies from vari- ous pioneering countries are presented here to highlight what has been achieved two years after the landmark Stiglitz et al. report, as well as what future challenges need to be addressed. In many countries national round tables are being conducted for the purpose of de- veloping new sets of indicators for measuring well-being. Indicators of this kind can provide citizens with more accurate information on progress in their country, and they offer decision-makers crucial guidance for policy action. In future, these indicator sets will need to be fed into national political debates by means of a properly thought-out communication strategy. Effective ways to achieve such an end, this report argues, include an annual »indicator-based State of the Un- ion address« by a senior politician, as well as Regulatory Impact Assessments with a focus on quality of life (QOL-RIA). If the initiatives portrayed in this study are pursued with continuous energy the ulti- mate reward would be a victory for evidence-based policymaking and the democratic culture in the form of more transparency and accountability. Christian Kroll | Measuring ProgRess and Well-Being Content 1. Introduction: Finding new answers to important questions. 3 1.1 What is well-being?. 4 2. Country profiles and case studies . 5 2.1 United Kingdom. 5 2.2 Germany . 7 2.3 Italy . 8 2.4 France. 9 2.5 United States of America. 10 2.6 Canada. 11 2.7 Australia. 13 2.8 Organisation for Economic Cooperation and Development (OECD) . 14 2.9 European Union . 16 2.10 Other countries and stakeholders . 17 2.10.1 Spain . 17 2.10.2 The Netherlands. 17 2.10.3 Latin America . 18 2.10.4 Developing and emerging countries: UNDP, OPHI. 18 2.10.5 Bhutan. 18 2.10.6 China and India . 19 3. Conclusion: Differences and similarities in past achievements, challenges for the future. 19 3.1 Actors . 19 3.2 Indicators . 20 3.3 Dashboard or index?. 20 3.4 Subjective well-being . 21 3.5 Involving the public. 21 3.6 The next steps . 22 Bibliography. 24 1 Christian Kroll | Measuring ProgRess and Well-Being 1. Introduction: measurement of quality of life and (iii) more attention Finding new answers to important questions paid to sustainability (Stiglitz et al. 2009). Fundamental questions are being posed anew in many But how does one measure comprehensively something countries today. What do progress and well-being mean as apparently vague as quality of life and what can be for us and how can we measure and improve them? Is done politically to increase it? There is more and more public policy successful in making our lives better? Finally, talk in the media about a so-called »happiness index« how in future do we want to organise how we live to- as a guide for policy (see, for example, Stratton 2010). gether, building on what we have learned? These ques- The Stiglitz Commission proposes that the focus should tions are crucial for politicians who as decision-makers be on eight areas of quality of life in particular: (i) mate- have the power and responsibility to exert an influence rial living standards (income, consumption and wealth); for good. But it is in the interest of every citizen to obtain (ii) health; (iii) education; (iv) personal activities, including accurate information on the extent to which his or her work; (v) political voice and governance; (vi) social con- country’s decision-makers and all of us as a society are nections and relationships; (vii) environment (present and capable of meeting the challenges of our time. future conditions); and (viii) insecurity, of an economic as well as a physical nature. For further discussion of We use specific indicators to guide our political, eco- such issues the Commission also advocates that »at the nomic and social action. Only in this way can we discern national level, round-tables should be established, with whether things are improving over time, how we are do- the involvement of stakeholders, to identify and prioritise ing in comparison to other countries and regions and those indicators that carry the potential for a shared view whether the actions of the government are bearing fruit. of how social progress is happening and how it can be The most widespread indicator of progress and societal sustained over time« (Stiglitz et al. 2009: 18). well-being since it was devised in the 1930s is gross do- mestic product or GDP. It measures the total volume of The present study follows-up from here and examines goods and services produced in a country in the course the new ways that selected countries are taking to meas- of a year. For some time now, however, the application of ure well-being. It looks at the cross-national differences this measure for the purpose of measuring societal well- and similarities in the recent debate, emphasising the being has been coming under strong criticism. The Com- search for indicators of the well-being of nations and mission on the Measurement of Economic Performance individuals. Using key case studies it considers which ac- and Social Progress (the Stiglitz-Sen-Fitoussi Commission tors are examining this topic, what conclusions they have or the Stiglitz Commission for short), a group of experts reached, and where future challenges lie. Two questions including Nobel Prize winners, recently presented a sum- have a central role in this: (a) the selection of key indica- mary of the problems pertaining to such a use of GDP tors for national well-being and (b) the relevance of the (Stiglitz et al. 2009). For example, GDP does not take into indicators selected for policy. In the concluding section account distribution and sustainability, not to mention the central cross-cutting issues which have emerged in various activities which take place outside the market the debate are addressed and we take a look at what (housework, neighbours helping one another, bringing lies ahead. up children or voluntary work) which nevertheless play an important role in both individual and social well-being. This study is therefore intended primarily for both the In conclusion, the Commission advises »to shift empha- interested public and specialists interested in a system- sis from measuring economic production to measuring atic look beyond national borders in order to identify so- people’s well-being« (Stiglitz et al. 2009: 12). If we orien- called best practices in the measurement of well-being. It tate our actions in accordance with purely economic and, can serve as an introductory overview, a contribution to moreover, inadequate indicators such as GDP, the argu- the debate and a reference point. A unique window of ment is, when it comes to it we may make quite different opportunity is opening up at present since many coun- decisions compared to what we might opt for if we took tries are working on similar questions in parallel. Interna- human well-being as the central guideline of our actions. tional harmonisation of efforts is therefore eminently de- In future, the Commission would therefore like to see (i) sirable and learning from one another as well as we can a revision of economic indicators, (ii) more broadly-based would benefit all actors with an interest in this debate. 3 Christian Kroll | Measuring ProgRess and Well-Being In the countries presented here official statistics and so- A noteworthy feature of the initiatives presented here cial indicators on the issues of sustainability and social is that the current global movement seeking new ways well-being are available going back many years.1 On top of measuring well-being has a different quality in terms of that, a continuously growing branch of academic re- of its political and social relevance than earlier efforts search is dedicated to the measurement of quality of life.2 in this area. There have been similar debates before: in The initiatives described here, building on this, prima- the 1930s Simon Kuznets, who devised GDP, deemed rily investigate the question of what measures should be that »the welfare of a nation can, therefore, scarcely chosen from this mass of information as central guide- be inferred from a measure of national income«. In the lines for policy action and as a yardstick for well-being, 1960s and 1970s, criticisms of a one-sided focus on as well as what strategically significant gaps in the data growth multiplied, expressed by pioneers such as Robert infrastructure need to be closed. The challenge is to es- Kennedy, according to whom GDP measures everything tablish what indicators of national well-being are suffi- »except that which makes life worthwhile« and the ideas ciently accepted, robust and relevant to be able to play a on the limits of growth of the Club of Rome (Meadows key role in social reporting in each country. In that way, et al. 1972) and Fred Hirsch (Hirsch 1976). both citizens and decision-makers will be kept more con- cisely informed than hitherto on progress in their country. However, the current international efforts in this direc- tion, this survey will show, have the potential to have For reasons of space, this cannot be a complete overview a lasting effect.