Measuring sustainable wellbeing

Tuesday, 3 July 2012 01:18 -     - {{hitsCtrl.values.hits}}

The Oxford Dictionary tells us that being ‘happy’ is being cheerful with feelings of pleasure or satisfaction. ‘Satisfaction’ is, in turn, when you are pleased because you have achieved something or because something has happened as you wanted it to. A synonym is being ‘content’ – being happy and satisfied with what you have.

Rulers have constantly tried to measure happiness as an indicator of the quality of life of the ruled. Sustainable is defined as something which survives and can be maintained without change.


Gross Domestic Product

One measure adopted by rulers, encouraged by their economic pundits, is the Gross Domestic Product, better known by its initials, GDP, which also has been the professional economists’ chosen measure of a nation’s wellbeing for over 70 years.

Economic growth is assumed to equate to wellbeing. However it is well recognised to have serious limitations, for example it takes no account of environmental pollution and degradation, which negatively affects sustainability, also it excludes all unpaid services which exist in the economy, such as volunteering and domestic housework – homemaking.

Robert Kennedy, Attorney General of the USA and brother of President John. F. Kennedy, put it succinctly, when he said that GDP, ‘measures everything … except that which makes life worthwhile!’

Economic performance measured by Gross Domestic Product (GDP) is a measure of the value of goods and services produced in a country. It has been defined as the total of all economic activity in one country, regardless of who owns the productive assets.

However, it has many flaws and does not even measure the value of goods and services precisely. Further people’s feelings of happiness or satisfaction or optimism also depend on things GDP does not capture.


Difficult and challenging times

We live in difficult and challenging times. Financial markets are under huge stress. Standard and Poor’s and Moody’s are downgrading national economies and major banks. Governments and their acolytes are getting into puerile name calling and trying to shoot the messenger, without getting down to addressing the issues raised by the rating agencies and investors, who are fleeing with their money, in droves, while all heads of governments and their acolytes can do, is to mouth meaningless platitudes and/or mount vituperative criticism.

Global poverty and inequality stubbornly persists and the threat of the negative consequences of global climate change looms over all our heads. At a UN gathering in Brazil, the Rio +20 World Sustainability Conference, those who were concerned enough to attend, that is – the major players simply kept away!

The 238 point final agreement entitled ‘The Future We Want, was arrived on the day appointed for the conference to end, a sure sign for an ineffective UN conference, there was no real controversy, where there are controversial ‘real’ issues raised, the meetings go on until the early hours of the morning, trying to hammer out a compromise.

The EU’s climate change commissioner commented on the final communiqué: “Telling that nobody in that room adopting the text was happy. That’s how weak it is.”

At a recent workshop on Promoting Social Protection, at the IPS Auditorium, organised by the IPS, Department of National Planning and the World Bank, D.E.W. Gunasekera, Senior Minister for Human Resources, described Rio+20 as a “damp squib”!

There were some potentially useful ideas, like a commitment to devise new environmentally friendly development bench marks, in areas such as renewable energy and food security, to replace the millennium development goals which would expire in 2015.

A growing number of ordinary people around the world are recognising the mutual interconnectedness of these issues and the need to think of a way to evolve a measure of development which would capture the real situation of the status of humanity as to their thinking of their present and future.

How is ‘sustainable progress’ to be measured in the 21st century? The traditional indicators of economic activity simply don’t tell us enough about ordinary peoples hopes, goals and aspirations. It is this realisation that prompted the United Nations to host a High Level meeting on Happiness and Wellbeing.

For the same reason the few world leaders who actually attended Rio +20 were involved in negotiations on development indicators which ‘would go beyond GDP’.



Happy Planet Index

The New Economics Foundation, responding to this need has created a Happy Planet Index (HPI). The HPI is considered to be one of the leading global measures of sustainable wellbeing. As a measure of human progress, it measures the extent to which countries deliver long, happy, sustainable lives for their citizens.

The 2012 HPI report, published on 14 June 2012, ranks 151 countries based on their efficiency – defined as the extent to which each nation produces long and happy lives for their citizens, per unit of environmental input.

Clearly the results show that we are not living on a happy planet. No country has good performance on three critical indicators – life expectancy, experiential wellbeing and ecological footprint.

Some countries certainly do well, but maybe not the ones you expected. None of the top 10 in the HPI are the world’s rich countries. Of the top 40 in the HPI, only four have a GDP per capita of over $ 15,000. The highest ranking Western nation is Norway at 28. New Zealand is 29th. Costa Rica leads the HPI table, with its very high life expectancy, high experiential well and an ecological footprint one-third of the USA’s.

The HPI results show that progress is not just about wealth. That it is possible to live happily in a sustainable way, without doing irretrievable damage to the environment and that this is measurable.


The ‘Better Life’ index

The OECD, a mainly rich country think tank has attempted to address this issue of developing an accurate indicator for development has created the ‘Better Life’ index. The index uses 24 variable indicators across 11 sectors, to create a measure of welfare for 34 of its members, plus Brazil and Russia. If the 11 sectors are grouped into two broader categories-America excels most in money and jobs, Switzerland in health and education,

The index was launched in May 2011; it was the first attempt to bring together internationally comparable measures of wellbeing. The 11 sectors measured includes- housing, income, jobs, community life, education, environment, governance, work life balance.

Each topic was considered using three indicators, for work life balance three indicators were considered, the number of employees working long hours, the percentage of working mothers, and the time people devoted to leisure and personal activities.

A UNDP report, published some time ago – ‘The Real Wealth of Nations: Pathways to Human Development’ – says that employees in Sri Lanka are the most satisfied, up to 86% have declared to be so. An earlier survey has shown that Sri Lanka has topped an Asian list of people most satisfied with their lives. 93% of those surveyed in Sri Lanka said they were satisfied. One wonders about the sustainability?



The HDI, Human Development Index, developed by the UNDP under the guidance of the late Dr. Mahbub ul Haque was an alternative measure. Dr. Haque said: “The human dimension of development is not just another addition to the development dialogue. It is an entirely new perspective, a revolutionary way to recast our conventional approach to development.”

In 1999 the Planning Commission of Bhutan organised a workshop in Thimpu to consider whether or not the concept of Gross National Happiness – GNH – as articulated by the King of Bhutan as a development target of his Kingdom, could be related to the HDI indicators of the UNDP.

The workshop considered a number of issues: Could an index for GNH be constructed in the same way as the index for HDI? What are the main ingredients of happiness and what are the indicators for happiness? Were the four platforms of economic development, environmental preservation, cultural promotion and good governance through which Bhutan was pursuing GNH the appropriate ones?

In 2007 a British academic Adrian White published a league table of happiness which put Denmark in number one position. White took data from diverse sources as UNESCO, WHO and the CIA and obtained data from 80,000 people in 178 countries. He concluded that factors such as health care and education were significant when it came to a person’s happiness.

In early 2009 a British think tank, the New Economic Foundation, produced a Happiness Index; referred to earlier, they used criteria such as life expectancy and the ecological footprint of the population as criteria. Lord Layard, an emeritus professor at the London School of Economics, one time the British Governments’ Happiness Czar and an academic, is of the view that happiness can be measured in this way, for example by simply asking people.

Lord Layard also is of the view that relationships are a lot more important that researchers normally allow for, people who want to be happy have to pay a great deal more attention to relationships and be not so willing to sacrifice them for the sake of income or productivity.

Lord Layard says, on this strategy to measure happiness: “I think it’s wonderful; it’s something I and others have been advocating for some time. It’s based on the idea that unless you measure the right things, you won’t do the right things.”


Measuring national wellbeing

British Prime Minister David Cameron, promised at the election he won, to measure subjective levels of wellbeing, when the Government sets about collecting other data for the census and measuring the usual things such as income levels and fear of violent crime.

Britain’s National Statistician, Jill Matheson, said that “there is a growing international recognition that to measure national wellbeing and progress there is a need to develop a more comprehensive view, rather than focusing solely on gross domestic product”.

France has also jumped on this band wagon of this ‘science of happiness’ movement, instead of confining oneself to only rupees and cents. In 2008 President Sarkozy appointed a Commission on the Measurement of Economic Performance and Social Progress, chaired by Nobel prize laureate Joseph Stiglitz consisting of 25 prominent social scientists, five with Nobel prizes in Economics including Stiglitz and Amartya Sen.

The Commission presented its report on September 14, 2009, calling for the world, in the words of Stiglitz to abandon its “GDP fetishism”. The Commission dealt with the criticisms of GDP as measure of wellbeing.

GDP takes no account of depreciation of capital goods, although the value of production is based on market prices, not everything has a price, the value of these services, such as owner occupied housing and voluntary child care by parents is imputed by assumption.

Canada has also developed a national wellbeing index. The Canadian survey asks subjective questions like ‘How much do you enjoy your life? Are you comfortable with your current level of debt’ and asks about Canadians core values, living standards and their identification with minority or ethnic groups. The British survey was expected to follow this format.

Richard Easterlin asked the question: “Will raising the income of all raise the happiness of all?” Lord Layard in his book ‘Happiness: Lessons from a New Science’ says: “There is a paradox at the heart of our lives. Most people want more income and strive for it. Yet as Western societies have got richer, their people have become no happier.”


Wellbeing of future generations

The Commission also examined the wellbeing of future generations. Our successors will inherit a stock of resources, machines, buildings and institutions, the quality of their lives will depend to a great extent on our behaviour and investments we make today, especially in their human capital, education and health and the environment.

Economic activity can be described as sustainable if future generations can expect to be at least as well off as us. The report concludes that finding any one measure which catches up all this seems too ambitious and that it is wiser to look at a wide range of indicators that is a basket of figures broadening official statistics beyond GDP alone.

In Brazil a Senate Committee has approved an amendment to the constitution which would make the pursuit of happiness a fundamental right. A Brazilian NGO was pushing for this. . This brings the Brazilian Constitution somewhat in line with the USA’s Declaration of Independence which includes the phase “life, liberty and the pursuit of happiness”.

The Brazilian NGO Movimento Mais Feliz (Happier Movement) say that the amendment was supposed to emphasise those other essential rights, such as access to adequate services in health and education, were essential to the achievement of happiness.

Professor Cristiano Paixao of the Faculty of Law at the University of Brasilia described the amendment as “a useless and worrying change to the constitution”. Can you guarantee happiness by law, is his question.

The NGO’s position is that it aims to promote happiness through five fronts: increasing popular awareness, mobilising social groups, stimulating participation in social projects, training ‘multiplier’ community activists and motivating citizens to contribute to its projects.

It says “the state has an obligation to create conditions to provide education, health, security, etc., the idea is to force the state to assume the responsibility of meeting these needs so that citizens can seek happiness”.

A Gallup poll has found that Brazil was 12th happiest of 155 countries surveyed, one position happier than the USA. Four of the five happiest countries were in Scandinavia. Gautama the Buddha probably has had the conclusive word on this when he preached that the way to happiness and satisfaction was to limit and control needs and eliminate greed and craving, the second of the Four Noble Truths – Samudaya – is that suffering is caused by craving. The surest way to ensure happiness and satisfaction is to minimise needs.

Generally, surveys have shown that when people have been asked to say how happy they were as compared to the past , the answers show that for the very poor, level of income really matters, when they self assess their level of happiness. But similar surveys have also shown that an enhanced income does not contribute to happiness, among segments of the population who have something over and above than the basic necessities of life.


Way forward

Nobel laureate Joseph Stiglitz, who chaired former President Sarkozy’s Commission on the Measurement of Economic Performance and was also involved in the OECD Better Life Index, in a recent book entitled, ‘The Price of Inequality: How Today’s Divided Society Endangers our Future’ which he has written in response to the Occupy Wall Street Protesters.

Stiglitz says that the Occupy Wall Street protesters slogan of ‘We are the 99%,’ echoes an article he wrote in 2011 in Vanity Fair entitled ‘Of the 1%, by the 1%, for the 1%’ in May 2011. This inequality Stiglitz argues is the result of public policy being captured by an elite who have feathered their own nests at the expense of the rest of the community.

They have abused their power to distort the political debate on these issues, pushing through tax cuts and concessions to favour the rich and adjusting monetary policy to favour the banks and financial houses.

The challenge is how to measure these inequalities accurately so that there could be effective policy responses. The Rio+20 commitments to new environmentally-friendly development benchmarks as an alternative to GDP may be a way forward.

(The writer is a lawyer, who has over 30 years experience as a CEO in both government and private sectors. He retired from the office of Secretary, Ministry of Finance and currently is the Managing Director of the Sri Lanka Business Development Centre.)