DP blog #5. What are good national indicators?

Abstract: This blog follows up blog number 3, in relation to the failures of the GDP, and what elements of society need to accessed in order to accurately report on the whole of society. It has proven nearly impossible to find one indicator that accurately paints a picture of society. However, certain indicators such as the Calvert Henderson Quality life indicator do exceptionally well at coming close to understanding the quality of society in a holistic approach. They prime the canvas with the environment and energy and build up layers of society through both monetized and non monetized aspects of society. We have identified holes in the statistical data. Through the identification and scrutiny of imperative aspects of society we can create more dimensional indicator. If we can illustrate our attributes and shortcomings more accurately, a society as a whole can then hold policy makers accountable for their shortcomings. In my next blog I will try to accurately access the state of my naiton- U.S.A. I hope to give America a real rating, taking into account the various aspects of society.

“Euclid is supposed to have told Ptolemy: There is no royal road to geometry. It is not clear that there is any royal road to evaluation of economic or social policies either. A variety of considerations that call for attention are involved, and evaluations have to be done with sensitivity to these concerns,” (Sen, 85).

I have concluded that the GDP fails to report on the whole of society. At first, I thought that through critical analysis and research I would be able to identify one or at least a couple of key indicators that could best be used to report on the whole of society, (reporting on the 13 factors that affect a citizen and the whole societies well being that I have identified in my previous blog). However, I have not found one particular formula that equally evaluates all sectors of a nation. Amartya Sen has been a great influence and resource for me, in her introduction to Development as Freedom she states, “Growth of GNP or of individual incomes can, of course, be very important as means to expanding freedoms…but freedoms depend also on other determinants’, such as social and economic arrangements.”(3) To expand upon her perspective I want to state that indicators should work towards ensuring a lasting happiness and economic growth does not necessarily result in lasting well being.

Furthermore, the level of sustainable development needs to be highly investigated and accounted for when reporting on the well being of a nation. If we do not take into account the varying aspects of a nation we fail to create a complete picture and cannot create policy to move a nation forward towards happiness. However, through my research it has been made evidently clear that the assessment and measurement of a nation is far more complex then I had once presumed. A variety of methods and indicators must be utilized in order to work for the benefit of the nation.

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We need a multi criteria analysis for indicators. Among them to name a few, (because I have learned there are tons) are as follows the Calvert-Henderson Quality of Life Indicators, the Daly-Cobb Index, UNDP’s Human Development and Poverty Indices and New Economic Foundation’s National Accounts of Well-Being and (Un)Happy Planet Index. I also wanted to include what I learned in Environmental Economics and the NAMEA system but this only focuses on the environment. I do however want to state that I believe the NAMEA accounting system uses an ecological approach that best accounts for the degradation and use of the environment. The (Un) Happy Planet index combines human happiness with environmental impact. I think it is very important to first access the ecological efficiency and the state of the environment in a nation, then from the state of the environment, we should move to the efficiency of energy. I think that the land in which we live off of is the foundation for which a society can be built. Degradation of the environment seriously harms the future generations and should be accessed so it can be limited and prohibited. If our environment: the air in which we breathe, the water that we drink and the land in which we farm is secured and sustained then you can move up the ladder to the society and its state.

The Calvert-Henderson Quality life Indicator resulted from an extensive six year study that drew on a variety of players and multiple statistical approaches to account for the well being of a society. I think that it is one of the best indicators not only for the encompassing of 12 different sectors of a society but also for the dedication to constantly be improving the indicator. This constant development to me implies progress this is seen as the indicator is multifaceted and constantly worked on and improved. The Calvert- Henderson Quality life Indicator, reports on the following twelve indicators:
• Energy
• Education
• Employment
• Environment
• Health
• Human Rights
• Income
• Infrastructure
• National Security
• Public Safety
• Re-Creation
• Shelter
The best part of this report is the attention brought to energy. Energy demands are growing exponentially and I think the government should be working to ensure a diversified portfolio when it comes to energy. Energy availability and use should be evaluated in relation to the environment. If this is adequately accessed then we can move to individual freedoms and rights. The GDP reflects on the monetized aspects of society yet ignores key productive non monetized areas of the nation that very much contribute to the well being of a nation. The old paradigm of the industrialized GDP is breaking down and the globalized world is looking towards the Calvert Henderson Indicator as it gains traction and recognition in a new age. Other indicators such as the Daly-Cobb Index of Sustainable Economic Welfare was developed intended to replace the GDP as a more comprehensive indicator but is used only in the US.

In America the reflection of the failures of GDP have led activist and theorist to work towards finding a new index to answer questions about volunteer labor and how it is accounted for, the cost of crime, family breakdown, underemployment, ozone depletion and general environmental degradation. The Daly-Cobb index takes into account average consumption and distribution and environmental degradation. As of today this indicator has only been used in the United States. This indicator is important because it factors in elements of the environment such as depletion of nonrenewable resources and soil erosion and urbanization, loss of wetlands and the cost of air and water pollution. Again, this measure is a great indicator but is not easily measured in developing countries that lack the tools and manpower to seek out comprehensive data in regards to the environment. This same drawback is seen in the HDI, as the indicator reports on infant mortality rate and this statistic is only taken once every ten years in developing countries. The accuracy of data is screwed. So therefore, again, no one indicator can account for the whole of society.

Human Development Index (HDI), pioneered by the United Nations Development Program annually since 1990, which was developed by, the late Mahbub ul Haq and Dr. Inge includes poverty gaps, relative budget priorities between military spending and education, health, gender, environment and other aspects of government performance in over 180 countries. It is clear the Human Development report is trying to work towards a combined measurement of development by encompassing indicators such as life expectancy, educational attainment and income. The HDI seeks to create a single statistic that included both social and economic development. While the HDI represents a distinct improvement over income figures as a measure of human well-being, it so far says nothing about environmental degradation. So, yes the Human Development Indicator is an improvement but fail to report upon the lasting satisfaction of a nation. In my research I have found that different authors weigh different aspects of ones life as more important than others. T.N. Srinkivasan critiques the HDI report and proposes to include operational metric for weighing commodities. I agree that it makes more sense to understand how far ones dollar can go. And that a person who is able to feed themselves on one dollar is clearly better off than a person who has five dollars and is unable to feed themselves. (so we can use things like the Purchasing Power Index) But, I am not sure how much it really tells us. I think there needs to be both a direct comparison as well as a “distinguished capability comparison,” (Sen, 82) I would certainly hope the Human Development Index would be at the top of policy makers list when evaluating their nation but again can not be the only indicator.

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Happiness, well being, and subjective well-being all have different meanings yet when an individual is asked about each and how they feel they all seem be answered in the same way. There is no one single definition as to what makes someone happy. As we have learned in development class there are a lot of loaded words such as development, aid, progress and well being that have no one single definition and are unable to be accessed in one clear way. Gross National Happiness was first proposed by Bhutan’s king in 1972 to replace the GDP. Of course, the use of GNH is more easily said than done. I love that the GNH is based on material and spiritual development as one in the same. The GNH can be compared the Genuine Progress Indicator. The Gross National Happiness is based on the following seven criteria:
• Economic Wellness:
• Environmental Wellness
• Physical Wellness
• Mental Wellness
• Workplace Wellness
• Social Wellness
• Political Wellness
These seven factors are evaluated through both statistical research and surveys. We learned with David Sanderson that the best approach to learning about a community is PRA. A new social science assessment tool that uses participatory rapid appraisal. It aims to incorporate the knowledge and opinions of people to help in the planning and management of development. It seemed like common sense to me, as I think it is common sense to judge the well being of a country by just, simply asking its citizens. However, in developed countries such as America where spirituality seems to be a dying concept, people are assuming that money will buy their happiness. So, even if surveys are conducted how accurate are they in reporting on the lasting satisfaction of a country when moral and opinions are subject to change. I now want to draw some conclusions about income and how money really fails to tell us anything.

Money does not buy happiness. Income and wealth is a key factor in a citizens well being. However, the US for example the levels of satisfaction have not risen over the past 50 years despite the fact that real per capita income has grown during this period. (Bok, 11) So, if my country is apparently winning the GDP race, why aren’t we a happy country. America falls in 15th in a comparative survey on the average satisfaction with life. (Bok,24) Bok continues to point out the rise in income only affected the top 20% so the gap between the rich and the poor has only grown and the overall happiness has not changed. So, therefore this exemplifies how the GDP fails to report on the entirety of the nation. Just because a select few are getting rich does not mean the entirety of the nation is benefiting. The trickle down theory is wrong. Furthermore, the idea that more money will lead to happiness is also wrong. The elite are stating that their happiness has not been affected by the ups and downs of their incomes and that if there level of happiness was accessed longitudinally was barely affected over the course of ones life. Happiness, and more importantly lasting satisfaction is linked with marriage, social relationships, employment, perceived health, religion and the quality of government, (Bok) The champions of the GDP are painting the portrait that the more money you have the happier you will be. “Moreover, an excessive obsession with the creation of material wealth can obscure the ultimate objective of enriching human lives.” (http://hdr.undp.org/en/statistics/hdi/) Bok continues to bolster this perspective stating that “the pursuit of financial goals as a treadmill in which people’s aspirations are forever beyond their reach leaving them perpetually unsatisfied,”(13) In conclusion, it is not the amount of money you make but stable your income is that makes or breaks ones happiness. Incomes in the US have remained stagnant for year except of course for the super rich. In fact the Washington Post stated that between 1980 and 2004 the wages of typical workers actually fell. Yet, our GDP rose. Policy makers should not reflect on the well being of a nation using the GDP because it report on champions a few and ignores the growing gap between the rich and the poor.

A productive country and a satisfied country needs to honor the private and public sector which can be monetized as well as account for the implications of the underground economy, the social well being of individuals and first and foremost the environment. Efficiency and effectiveness of policy makers can only be derived from accurately accounting for the different sectors of society. The Calvert-Henderson Index stands at the top of my list when accessing the well being of a society. I think it is closest to my previous 13 proposed sectors of society. It is clear that we need more reporting and more research to bolster any one indicator. The politics of happiness is far greater social science then I had first assumed. It was easy to debunk the GDP but has proven nearly impossible to find one single indicator as a solution. The indicators that use a multi faceted approach are the best because they draw from many aspects of society and therefore are giving a more complete picture of the lasting well being of a society.

Work Cited: All previous sources were used in addition to:
Bok, Derek Curtis. The Politics of Happiness: What Government Can Learn from the New Research on Well-being. Princeton: Princeton UP, 2010. Print.

Home | Happy Planet Index. Rep. Economics as If People and the Planet Mattered. Web. 29 Dec. 2011. .

Sen, Amartya. Development as Freedom. Oxford: Oxford UP, 1999. Print.

Sowell, Thomas. Economic Facts and Fallacies. New York: Basic, 2008. Print.

“The World Economy | Economy Watch.” World, US, China, India Economy, Investment, Finance, Credit Cards | Economy Watch. Web. 29 Dec. 2011.


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