More Governments Show Interest in New Economic Yarsdsticks

“It’s the economy, stupid,” Bill Clinton’s 1992 campaign advisors famously declared. Today, more governments might add nuance: “It’s about well-being.” Prosperity, to be sure, but prosperity with a purpose.

Economic Advance (credit: Grand Velas)

Recently, China and the United Kingdom were added to the growing list of governments interested in redefining the very purpose of economies. After adopting and then abandoning a green GDP measure in 2005, China embraced a new plan in November for economic advance based on 55 indicators—from carbon emissions per person to the share of environmental spending in the government budget. A few weeks later, U.K. Prime Minister David Cameron’s Conservative government unveiled plans to launch a Happiness Index that will serve as a complement to GDP as a measure of national progress.    

China and the U.K. are only the latest countries to focus on delivery of well-being rather than economic output alone. A 2010 report from the Wuppertal Institute identifies three major national efforts  to adjust gross domestic product (GDP) (such as Green GDP in China or Genuine Progress Indicator in the U.S.), five to replace it (such as the United Nations Development Programme’s Human Development Index or the Ecological Footprint in the U.S.), and eight to supplement it (such as the United Nations’ Millennium Development Goals). France and Austria are in various stages of studying alternative measures of economic progress, as are the European Union and the Organisation for Economic Co-operation and Development (OECD).

Growing official interest in alternative measures of progress suggests that a material yardstick may have reached the limits of usefulness in many wealthy countries, an auspicious development for the advancement of sustainable economies.

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