Is redefining growth really taking off?

Using GDP as a main indicator for a country's development and overall well being has been critiqued pretty much since it began. The UN was critiquing GDP way back in the 1950s. Despite its nay-sayers, it obviously has had a field day, much to the frustration of many engaged with sustainable development. In recent years, the protests against using GDP seems to be growing. Next month, the World Bank is having their annual conference in Stockholm. When they do so, they are going to have a substantial section on alternative perspectives to growth. Happiness - which, despite disgruntled people such as myself's objections to this 'new' notion - is gaining fast currency even in the skeptical and somewhat cynical development circles and will be a major theme at the conference.  Happily, so will wellbeing. And I have to wonder, are we finally going to see a greater transition away from using GDP as the primary indicator of the 'health' of the economy?

Last Fall, Sarkozy commissioned nobel prize winners Stiglitz and Sen to head a commission looking into appropriate measurements of a society's well being. Good question, well-respected (to say the least) people, well done Sarkozy, even if most of us could have guessed about the basic outcomes of their report before they launched into it.   They organised their approach into traditional GDP issues, well being and (environmental) sustainability - their own version of the golden triangle of sustainable development. They suggest that GDP even when taken for its traditional issues - measuring output and input and the difference between them, etc. - is struggling in the current quickly changing, service- and knowledge-orientated approach. Of course, GDP also fails to measure a host of other essential parts of the economy, including the amount of (unpaid) time put into basic services (aka 'women's work' - cleaning, washing, etc.) and the informal economy (which in some countries makes up to 70% of their economy). They recommend focusing on income and consumption rather than production; emphasizing the household perspective and focus on distribution of income and wealth, not just aggregate numbers, among other things. When discussing a multi-dimensional approach to well being,  they encourage the inclusion of both objective and subjective measures of well being.  They also take a 'stock approach' to measuring sustainability. They also suggest finding physical indicators for measuring environmental sustainability.

Implimenting alternative GDPs will take time. China tried it once and abandoned it quickly when its provinces complained. But it is possible that post financial crisis we may well be able to (finally) get greater traction for a non-GDP indicator - at least as a shadow indicator (as has been the Human Development Index). Certainly the more voices shout for it, the better chances of getting a real change.

Photo credit: realtyworldnca