What is Beyond GDP?

Funded by:

Our definition of Beyond GDP indicators…

“those indicators and indicator sets that have been proposed as necessary and central to the measurement of societal progress in a broad sense, other than those indicators,

such as GDP or the unemployment rate, that are already playing this role.”

BRAINPOoL WP1 report

It is a response to a real and to a measurement problem…

• There is a bias in policy making towards striving for GDP growth that may make resolving critical political problems more difficult, e.g.

– How do we improve lives in an era of low growth and squeezed finance?

– How do we create good jobs for people?

– How do we reduce inequality?

– How do we avoid political extremism?

– How do we deal with climate change and other threats to sustainability?

• This bias is exacerbated by the prominence of the metric itself

– The ability to maximise GDP growth defines ‘economic competence’

– Perceptions of ‘economic competence’ drive elections

– Therefore particularly strong incentives to maximise GDP

…resulting in two interdependent challenges

• Adoption of a new headline measure of progress (or a small set of such measures)

– This can balance GDP and thus indicate a more balanced political programme

• Moves towards a more balanced political programme

– The effective management of trade offs leading to better quality growth (equitable,

sustainable, high well-being)

Prima facie, BRAINPOoL is about the first of these, but they are interdependent: headline measures drive policy but real policy implications make indicators salient.

The real and measurement problem just defined focuses the discussion – as illustrated in the following charts

The bias to GDP maximisation as means to increasing well-being…

Policy Intervention

Growth Well-being

…will not be corrected by parallel objectives, which already exist…

Economic Policy

Growth

Well-being as understood by

economics depts

Other Policy Interventions

Social/ environmental

objectives

Well-being as understood by

other policy depts

…as do the relevant indicators…

Economic Policy

GDP

Other Policy Interventions

Social/ environmental

indicators

…but by a more integrated policy process

Policy Intervention

GDP Well-being –

now and future (sustainability)

‘Beyond GDP’

indicators

…allowing policy makers to target good quality growth…

Policy Intervention

↑ GDP ↑

Well-being – now and future

↑‘Beyond

GDP’ indicators

“Whatever policy objectives you have, you should set them into an integrated policy framework which has as an overarching goal the increase in people’s well-being” , OECD Researcher

…not bad quality growth

Policy Intervention

↑ GDP ↓

Well-being – now and future

↓‘Beyond

GDP’ indicators

…and in some instances to sacrifice growth.

Policy Intervention

↓ GDP

↑‘Beyond

GDP’ indicators

↑Well-being –

now and future