7-8 JUNE 2017 / Tour & Taxis / Brussels

Measuring well-being and social cohesion for sustainable development

Measuring well-being and social cohesion for sustainable development

D4
Thursday, June 4, 2015 -
09:00 to 10:15

Key points

  • What we measure shapes what we do.
  • New indicators are receiving more attention as the Sustainable Development Goals process wraps up.
  • Gross domestic product is a poor measure of human development.
  • The Organisation for Economic Co-operation and Development and others are developing new indicators.

Synopsis

What we measure determines what policies we adopt and how we implement them. That assumption serves as a basis for work at the Organisation for Economic Co-operation and Development (OECD) and in several countries to develop indicators to replace or supplement gross domestic product (GDP).

These efforts are rising to prominence as the final touches are put on the 2015 Sustainable Development Goals (SDG), which are expected to include many measurable targets.

Policymakers who rely on GDP make two assumptions, said Isabelle Cassiers, professor of economics at the Université Catholique de Louvain and research associate at the Belgian Fund for Scientific Research: first, that economic development can be reduced to GDP growth, and second, that economic development always leads to greater well-being.

‘Well-being is confused with GDP growth,’ she said, while common sense often tells us otherwise. African villagers pool their labour to dig a well, and GDP stands still, even though human well-being is advanced. When water and air pollution ooze from a new factory, economic growth gets a boost despite detrimental health effects. ‘Many people believe that GDP is obsolete,’ Cassiers added.

On the eve of the Arab Spring, life satisfaction indexes were declining in the Middle East and North Africa even though most affected countries had robust economic growth, said Romina Boarini, Head of Section, Statistics Directorate, OECD.

The OECD measures 11 material and non-material conditions for its life satisfaction index. Material measures include income, employment and housing. Non-material measures include work-life balance, health and civic involvement.

Bhutan’s Global Happiness Index (GHI) emphasises ‘the achievement of human values’, Cassiers said. ‘The task of the government and international institutions is to bring about the societal conditions for that in the long-term. Today’s happiness cannot destroy the happiness of future generations.’

Social cohesion is judged according to three categories: social inclusion, or how jobs, healthcare and housing are distributed according factors like class, ethnicity, geography and age; social capital, involving trust (of others and government), social networks and family ties, civic involvement, etc.; and social mobility.

Where social cohesion is high, citizens are more likely to pay their taxes, giving the government more resources for social programmes, said Alexandre Kolev, Head of the Social Cohesion Unit, OECD Development Centre. Where it is low, instability may arise, with the Arab Spring again as the example.

‘There is growing dissatisfaction with the traditional development model where [overall] income growth comes first and inequality is put on the back burner,’ he added.

Different measurements can engender different policies. Bhutan rejected donor funding for educational reform because the country’s leaders disagreed with the underpinning philosophy. The GHI was also cited in Bhutan’s decision to not join the World Trade Organization, even though membership was expected to bring economic growth.

Insight

Based on work in Bhutan and elsewhere, Professor Isabelle Cassiers, Professor of Economics at the Université Catholique de Louvain, outlined four factors for new human development indicators: sustainability, sharing, care and resilience.

  • Moderator
    Henri-Bernard Solignac-Lecomte
    Head of Unit Africa, Europe and Middle-East, Development Center, Organisation for Economic Cooperation and Development (OECD)
    OECD Development Centre
  • Romina Boarini
    Head of Section, Statistics Directorate, Organisation for Economic Cooperation and Development (OECD)
  • Isabelle Cassiers
    Professor in economics at the Université catholique de Louvain and Research Associate at the Belgian Fund for Scientific Research
  • Alexandre Kolev
    Head of Social Cohesion Unit
    OECD Development Centre