How to measure human well-being, equity and sustainability
Published on Thu, 2012-06-14 08:36
The international community must find new indicators to measure the performance of the countries and the world on economy, equity, well-being, human rights and sustainability, suggests the Civil Society Reflection Group on Global Development Perspectives, made up of 18 leading activists and scholars from all over the planet.
“It is time to draw lessons” from the simultaneous economic, financial, food and climate crisis, that “reflect the failure of the dominant model of development and economic progress” that “confuses growth of gross domestic product with progress in society, and regards poverty as a primarily technical challenge in which categories of inequality and social justice are neglected,” urges the Reflection Group in a report that will be officially launched on Saturday in Rio de Janeiro.
The study recommends the international community “to look beyond conventional development concepts” and “to rethink fundamentally the models and measures” of “social progress – in the North and the South.”
The United Nations Conference on Sustainable Development (Rio2012) to be held next week in Brazil and the “discussions on a post-2015 development agenda” constitute “a unique window of opportunity to reconsider the current development paradigm and to develop strategies towards a holistic, rights-based development approach,” according to the Group, comprised of members of Social Watch, Friedrich Ebert Stiftung, terre des hommes, Third World Network, Dag Hammarskjöld Foundation, DAWN and the Global Policy Forum.
The search for new indicators will be discussed on Wednesday 20, the first day of Rio2012, at a special event entitled “Beyond GDP: Measuring the Future We Want”, with the participation of President Susilo Bambang Yudhoyono of Indonesia, Prime Minister Helle Thorning-Schmidt of Denmark, the UNDP Administrator Ms Helen Clark, and the co-ordinator of Social Watch and member of the Reflection Group, Roberto Bissio.
After the creation in 1953 of the United Nations System of National Accounts (SNA) that made possible to compare economic indicators between countries, the gross domestic product (GDP) growth per capita “became a synonym for development,” reads the report. But the GDP “does not give the whole picture of an economy,” because, for example, “it does not show inequalities, it does not account at all for the creation or destruction of assets, including economic infrastructure, biodiversity and ecosystems, culture and human capital” and it excludes “services provided by people to members of their own families free of charge […], even when market values of similar services could easily be found,” notes the study.
The Reflection Group analizes in its report other assessments that integrate the economic and social performance of the countries, such as the Human Development Index (HDI) computed since 1990 by the United Nations Development Program (UNDP), the well-being indicators published since 2011 by the Organisation for Economic Co-operation and Development (OECD, which includes among its 34 members all the rich economies of the world), and the Gross National Happiness index of the Bhutan.
Many UN experts want to create a new Indicator of Sustainable Development that combines the “three pillars” (society, environment and economics) in one number. The idea is attractive, and its defenders consider that without an alternative number to get the GDP off its high horse. But the Commission on the Measurement of Economic Performance and Social Progress led by Nobel laureates Joseph Stiglitz and Amartya Sen and French economist Jean-Paul Fitoussi, strongly supports the opposite idea: “‘The question of sustainability is complementary to the question of current well-being or economic performance, and must be examined separately.”
The Stiglitz-Sen-Fitoussi report summarised the state of the art in the discussion on sustainability and well-being indicators and strongly emphasised that the two categories are different in nature. The metaphor used is that of the dashboard of a car, with separate displays for speed and remaining petrol. One informs about the time needed to achieve a destination, the other one refers to a required resource that is being consumed and may reach a limit before the destination is reached. Mixing both in a single number, they say, would only confuse the driver.
According to the Stiglitz-Sen-Fitoussi Commission the sustainability of any activity derives from the non-depletion (or the regeneration) of a certain stock or asset. If pastoralists overgraze, their herds disappear. If fishing exceeds certain limits, the fish are decimated. CO2 emissions as a result of burning fossil fuels accumulate gases that produce climate change and therefore deplete the “atmospheric space”.
What to measure
The Reflection Group concluded that the GDP “is not a measure of quality of life”, nor “a measure of sustainability, and not even the right measure for economic performance”. The report remarks that according to the Stiglitz-Sen-Fitoussi Commission, that indicator “will need to be revised and complemented with others to get an accurate picture”.
To assess the equity and distribution, the Reflection Group mentions the Gini coefficient that “is only available in the World Bank database for a limited number of countries”, because “inequality has not been an important issue for research or policy-making”. “As a more sophisticated measure UNDP introduced the ‘inequality-adjusted HDI’” that “adjusts the HDI for inequality in the distribution of each of its three components (life expectancy, education and per capita income)”.
The evaluation of the well-being usually average “different indicators ranging from subjective perceptions […] to objective measures of malnutrition, mortality, educational levels or time actually used in paid or unpaid work, commuting, leisure or socializing”. These indexes “warn that while the economy might be growing, human capital or social capital […] may be deteriorating,” adds the report.
In 2009, 29 prominent scientists identified nine "planetary boundaries". Seven of them have been quantified. Three of them have been transgressed (climate, global nitrogen cycle and biodiversity). These data allow measuring the contribution of each country or economic actor (producer or consumer) to the global unsustainability. By quantifying the boundaries and the transgressions, the cost of repairing the systems can also be calculated. Thus, at least in theory, the principle of “polluter pays” requires them to recognize an "ecological debt". But the polluter countries do not want to hear about the debt they have accumulated.