Wellbeing versus GDP (Gross Domestic Product) in guiding policies

Bhutanese people - Photo by Pema Gyamtsho on Unsplash

Bhutanese people – Photo by Pema Gyamtsho on Unsplash

“Gross National Happiness is more important than Gross Domestic Product.” So said the fourth King of Bhutan, King Jigme Singye Wangchuck, in the late 1970s. Bhutan developed a Gross National Happiness (GNH) Index to guide government, NGO and business policy. 

The Index includes traditional socio-economic measures such as living standards, health and education and also takes into account culture, community vitality and psychological wellbeing. It’s a reflection of the general wellbeing of the Bhutanese population rather than ‘happiness’ alone. 

Back then, that idea would have been fairly novel to many western governments who measure progress largely in economic terms. 

By measuring 33 indicators across nine categories that add such things as cultural diversity and ecological diversity and resilience to the mix, the Bhutanese government was able to develop an index of wellbeing.

A person’s ‘happiness’ is indicated by his or her ‘sufficiency’ in relation to the measures. The good news is that the results of the 2022 GNH Index, based on over 11,000 people from every Dzongkhag (administrative area), show a significant improvement in the overall wellbeing and happiness.

The results enable the Government to focus on policies to improve life for the ‘not yet happy’ people and to allocate resources according to criteria that include poverty rates and geographic isolation. 

If only we could do that in Australia! Maybe we can. In July, Australia joined several other countries including New Zealand, Iceland and Scotland in implementing wellbeing measurements. 

Treasurer Jim Chalmers released Australia’s first national “wellbeing framework”. Measuring What Matters “will track our progress towards a more healthy, secure, sustainable, cohesive and prosperous Australia”. 

The framework broadens our measures of success beyond the traditional ones of Gross Domestic Product (GDP), inflation and unemployment. Its themes – healthy, secure, sustainable, cohesive, prosperous – are supported by 50 indicators to monitor progress. How well this represents our wellbeing, and how effectively it influences policy and resource allocation, are yet to be seen, but it’s a start towards a more holistic approach to judging the success of government policies.

Other places are adopting a so-called ‘doughnut’ approach to create an economy that goes beyond industry growth and profitability. The idea is guaranteeing food, education, health, housing, water, energy, work, as well as other basic needs of people, without further harming the environment. 

The upwelling of these conversations in governments and communities offers hope. That’s where we come in. A key concept in the Bhutanese happiness index is ‘sufficiency’. It’s worth considering what that means to each of us.

Rising consumption is driving activities that damage society and the environment for short-term gain, including forest destruction, industrial pollution, plastic use and CO2 emissions from fossil fuels.

Our individual decisions, as well as government initiatives such as Measuring What Matters, have an influence. Hopefully, like the Bhutanese, we can improve wellbeing for society overall and for the ‘not yet happy’ people.

More information: Measuring What Matters https://treasury.gov.au/publication/p2023-mwm#