The welfare of a nation ‘cannot be inferred from a measurement of national income,’ said Simon Kuznets (the economist who invented GDP) in 1934. It is a poor measure of anything other than the flow of money through an economy – for example it can’t measure the overall wellbeing of people and the environment. But his advice was ignored until the late 20th century, when a number of people in cities and countries all round the world started looking at what have become known as genuine progress indicators that measure a wider range of indicators of how people and nations are doing.
For example, in Canada, Ron Colman has led the development of a comprehensive suite of indicators of areas of wellbeing covering arts, culture and recreation; civic engagement; community vitality; education; environment; health; living standards and time use – all things of much more interest to most of the world’s people than GDP!
As well as ecological economics, which accounts for the environmental externalities that classical economics acknowledges are excluded from its considerations, we see the proliferation of all sorts of alternative schools of economic thought, including happiness economics.
The spark that Bhutan lit by developing a happiness index for its people has encouraged many nations to consider such measures all over the world.
But exactly who develops the indicators we use to measure these important but elusive concepts that mean many things to many people? The Millennium Ecosystem Assessment findings on governance looked at better ways to manage our interactions with the natural world and to reduce the risk to business and communities (we could add vulnerable nations to this list) of progressive ecosystem decline.
We could look at a few simple models.
The ‘Grassroots-up’ model lets communities have their say. Better communication – especially the Internet – and education enables better public participation in decision-making by improving people’s use of existing procedural or democratic rights and empowering groups particularly dependent on ecosystem services or affected by their degradation, including women and indigenous and young people. It leads to more transparent decision-making, increased accountability and reduced corruption and can provide better information about products and services which allows people to exert consumer pressure more effectively.
The ‘Top down’ model sees governments take more effective action than merely commissioning another report. Governments need to be reassured that their constituencies want such change, and we do see some international cooperation and agreements and some better ways to centralize decision-making to solve environmental issues that cross international boundaries.
Ideally, these two meet in the middle in a ‘Bottom up meets top down’ model, where we develop ways to devolve decision-making to local and regional communities while ensuring effective coordination of their various efforts at national and community scale.
The A new New Zealand project aims to engage all New Zealanders in a debate about what matters most to all of us, to define and work towards achieving the outcomes we co-create. We are a small nation, and trying new stuff on behalf of the rest of the world is something we do well. An exciting phase may be about to begin!
And learning together as we go is the key: find out about some of the research and tools that are now available at Dr Will Allen’s resource-rich website, Learning for Sustainability.
Some of the content of this blog is adapted from some thoughts I put together for the wonderful Ann Andrews of The Corporate Toolbox for her ebook, “378 Predictions for doing business in 2010”. Many thanks to Ann for allowing me to reproduce some of that material here.