Beyond GDP
Measuring What Counts for Economic and Social Performance
Metrics matter for policy and policy matters for well-being. In this report, the co-chairs of the OECD-hosted High Level Expert Group on the Measurement of Economic Performance and Social Progress, Joseph E. Stiglitz, Jean-Paul Fitoussi and Martine Durand, show how over-reliance on GDP as the yardstick of economic performance misled policy makers who did not see the 2008 crisis coming. When the crisis did hit, concentrating on the wrong indicators meant that governments made inadequate policy choices, with severe and long-lasting consequences for many people. While GDP is the most well-known, and most powerful economic indicator, it can’t tell us everything we need to know about the health of countries and societies. In fact, it can’t even tell us everything we need to know about economic performance. We need to develop dashboards of indicators that reveal who is benefitting from growth, whether that growth is environmentally sustainable, how people feel about their lives, what factors contribute to an individual’s or a country’s success. This book looks at progress made over the past 10 years in collecting well-being data, and in using them to inform policies. An accompanying volume, For Good Measure: Advancing Research on Well-being Metrics Beyond GDP, presents the latest findings from leading economists and statisticians on selected issues within the broader agenda on defining and measuring well-being.
The need to follow up on the Stiglitz-Sen-Fitoussi Commission
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.
Also available in: German
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