This short book provides our personal perspective, as Chairs of the OECD-hosted High-Level Group on the Measurement of Economic Performance and Social Progress (HLEG), on the most salient issues discussed by the Group over the past five years (from 2013 to 2018). Over this period, the HLEG periodically convened to discuss many of the issues that are reflected in this book. The HLEG, whose members are listed in below, was created to pursue the work of the Commission on the Measurement of Economic Performance and Social Progress convened by former French President Nicolas Sarkozy in 2008 (the “Stiglitz-Sen-Fitoussi Commission”). A companion report, For Good Measure: Advancing Research on Well-being Metrics Beyond GDP, provides a series of authored chapters, prepared by some HLEG members, on those topics that have been the focus of the HLEG work, and which are also discussed here.

The release of the Report by the Commission on the Measurement of Economic Performance and Progress in September 2009, was a defining moment. During his presentation of the Report, the then President of France, Nicolas Sarkozy said: “In today’s circumstances, this report is important not just technically (but) also politically. It deals with questions that concern not only economists, statisticians and accountants, but also politics, and as a consequence, the whole world”. The Report’s key message was simple: change the focus of our statistics from measuring the size of economic production, which is what GDP is about, to measuring what shapes the well-being of people today and that of future generations. This change of perspective is crucial, in the words of Nobel laureate Joseph E. Stiglitz – one of the Commission’s chairs: “What you measure affects what you do”.

The High-Level Expert Group on the Measurement of Economic Performance and Social Progress(HLEG) builds on the analyses and recommendations of the 2009 Commission on the Measurement of Economic Performance and Social Progress (the “Stiglitz-Sen-Fitoussi” Commission, SSF) in highlighting the role of well-being metrics in policy and encouraging a more active dialogue between economic theory and statistical practice. The report makes explicit the often-implicit assumptions hidden in statistical practices and their real-world consequences. Its central message is that what we measure affects what we do. If we measure the wrong thing, we will do the wrong thing. If we don’t measure something, it becomes neglected, as if the problem didn’t exist.

This chapter looks at what has changed since the 2009 Commission on the Measurement of Economic Performance and Social Progress (Stiglitz-Sen-Fitoussi Commission). It describes the contribution of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress (HLEG) to moving “Beyond GDP” when assessing a country’s health, towards a broader dashboard of indicators that would reflect concerns such as the distribution of well-being and sustainability in all of its dimensions. The challenge is to make the dashboard small enough to be easily comprehensible, but large enough to include a summary of what we care about the most. The chapter argues that what governments measure strongly influences what they do. If they do not regularly include income inequality or economic insecurity in their dashboard of indicators, for example, they may not notice that these are getting worse. The chapter also argues that distorted metrics can lead to misleading assessments, for example when gauging success solely through the lens of GDP while failing to measure the potential environmental damages caused by economic activities

This chapter summarises how inadequate metrics (and models) might have affected the assessment of, and response to, the 2008 crisis, and what can be done about it. It argues that GDP may have given an over-optimistic account of how well the economy was doing both prior to the crisis and in the recovery phase, and of the sustainability of growth. The problem was that too many analysts didn’t look beyond GDP. If we had had better metrics, including measures that had incorporated more adequately the increases in people’s economic insecurity, we might have realised that the consequences of the downturn were deeper than the GDP statistics indicated, and governments may have responded more strongly to mitigate the negative impacts of the crisis. The chapter emphasises two shortcomings in standard metrics: only looking at government liabilities while ignoring the asset side of the government (and country’s) balance sheet, and ignoring measures (broader than the standard unemployment metrics) of the unused resources in the labour market. It stresses the need to complete existing data with measures of economic security and subjective well-being, and to include changes in human and social capital in models.

This chapter looks at work carried out since the 2009 Stiglitz-Sen-Fitoussi Commission on going “Beyond GDP”. It argues that the 169 targets agreed by the international community on the Sustainable Development Goals are too many, and that countries have to select a set that corresponds to their priorities. It shows that growing inequality in income and wealth are global concerns and that, even in developed countries, data are often inadequate. It warns against over-reliance on broad averages, since these fail to reflect important inequalities across given groups (“horizontal inequalities”) and say nothing about how resources are shared and managed within households. The chapter argues that what matters are not just inequalities in outcomes but inequalities in people’s opportunity to achieve those outcomes, and that measuring this is possible. Other areas where more work is needed include subjective well-being and economic insecurity, which interact with social capital and trust, as well as sustainability across its social, economic and environmental dimensions.

This chapter evaluates what is different when policy is approached through a well-being lens. It describes the different ways in which well-being indicators could be used in the different stages of the policy cycle, from identifying priorities for action, to assessing the pros and cons of different strategies to achieve policy goals, to allocate the resources (budgetary, human, political) needed to implement the selected strategy, to monitor interventions in real time as they are implemented, and to assess the results achieved and take decisions on how to change policies in the future. The chapter argues that a broad framework encompassing the most important dimensions of people’s lives, paying attention not just to average outcomes but to how policies affect each of the segments of society, and giving a balanced consideration to well-being today, tomorrow and in other parts of the world, holds the promise of delivering better results and bridging the divide that separates policy-makers and ordinary people today.

This chapter argues that the success of the 2009 Stiglitz-Sen-Fitoussi Commission report reflected its capacity to give expression to concerns that were widely shared on the inadequacies of the metrics that are currently used to guide policies, and to provide a vocabulary for linking streams of research that had, until then, been perceived as disconnected. While much remains to be done to translate the recommendations made by the Stiglitz-Sen-Fitoussi report in statistical practice, this short chapter provides a set of 12 new recommendations building on the work done by the HLEG over the past 5 years.

Abramovitz, M. (1959), “The Welfare interpretation of secular trends in national income and product”, in Abramovitz, M. (ed.), The Allocation of Economic Resources – Essays in Honor of Bernard Francis Haley, Stanford University Press, Stanford, CA.

Since its release in 2009, the Stiglitz-Sen-Fitoussi Commission report has had much resonance within the statistical community, spurring a large number of measurement initiatives worldwide. It has also acted as a catalyst for research, and for communicating on the “Beyond GDP” agenda to the general public. Some of the key initiatives are described below, distinguishing between those undertaken by individual countries at the national level and those carried out by international agencies with a more global perspective.