Wellbeing not GDP must be our measure of progress
Yardsticks other than economics can improve policymaking and resource use
The pursuit of economic growth has often come at the expense of our own wellbeing and that of our environment.
Over the past few months, each of us has been forced to re-evaluate what is most important in our lives. We’ve placed our health before wealth in ways never seen before. The threat of the pandemic galvanised us to make the seemingly impossible happen, creating a universal healthcare system and closing down the economy, all in a few short weeks. All sectors adapted and collaborated. We now have an opportunity to make permanent some changes that improved wellbeing and quality of life for everyone. Some of these choices will be individual and others require action across sectors, especially from Government.
At Government level, we’ve long used gross domestic product , an economic indicator, as the primary indicator of our welfare in Ireland. This indicator guided the policies and behaviours that led to the 2008 financial crash. After the crash, GDP continued to guide policymaking in Ireland and most other governments across the world. While the economy eventually rebounded here, quality of life deteriorated for many, not least because of unaffordable housing. Rising rents may increase GDP, but they do not improve quality of life for the majority. The government failed to understand that quality of life is what matters, and they felt the full force of this on the doorsteps and in the polling booths last February.
"It is time for a new north star for Ireland, time for wellbeing to replace GDP as the primary indicator of progress.
It is time for a new north star for Ireland, time for wellbeing to replace GDP as the primary indicator of progress in this country. There has never been a more opportune time to make this transition. The recently published programme for government places quality of the life for all as the number-one mission of the next government, subject to party members ratifying it. It states, “Our overriding focus is to improve the wellbeing of the Irish people and society. We will develop a set of indicators to create a broader context for policymaking, to include: a set of wellbeing indices to create a well-rounded, holistic view of how our society is faring; and a balanced scorecard for each area of public policy, focused on outcomes and the impact that those policies have on individuals and communities.” The Government envisages these wellbeing indicators sitting alongside existing economic indicators, and has a thoughtful plan on how to make it happen.
Quality of life
If executed properly and wellbeing indicators supersede economic, it has the potential to dramatically improve policymaking and resource allocation, affecting many aspects of our lives. It is true to say that you make what you measure. As a nation we’ve proven we can measure and consistently grow GDP. Now, instead, let’s focus on improving the wellbeing of everyone. There is some correlation between economic performance and quality of life, but only to a certain point. Across the various wellbeing indices, the United States rarely appears in the top-10 countries of the world, despite its economic might, and ranks just ahead of Costa Rica in terms of social progress. Indeed, the pursuit of economic growth has often come at the expense of our own wellbeing and that of our environment. By focusing on quality-of-life improvements, decoupled from economic growth, we have some chance of growing sustainably and improving wellbeing through this recession and beyond.
"None of our biggest challenges can be addressed by politicians or government agencies alone
The government widely recognised as doing an outstanding job at the moment is that of New Zealand under the leadership of Jacinda Ardern. In recent years, like ourselves, GDP has grown quickly, but so too have mental health issues, homelessness, child poverty and domestic abuse. In response, in 2018, it developed a living standards framework and, in 2019, the first wellbeing budget, redirecting policy and budget towards improving wellbeing. By way of example, they invested more than €1 billion in mental health alone. This work is cross-government and being led from the finance department.
To be successful, and as outlined in the new programme for government, we need a robust wellbeing index for Ireland. We have to get to a place where we can better understand the implications of policy and budgetary decisions on our wellbeing. We have to be able to monitor progress across all areas of life and keep ourselves accountable. While budgeting will get more complex with consideration for both wellbeing and climate, the good news is that many of the investments we have to make to reduce carbon emissions also enhance wellbeing for all, from active transit to warmer homes, from improved food, water and air quality to rewilding communities – the list goes on. There are several international indices that help us understand how we are progressing versus other countries across the world. They include the Social Progress Index, where Ireland ranks 14th and the UN Human Development Index where Ireland ranks third. We can be proud of our progress and standing in the world, but progress is unequal and so much remains to be done.
None of our biggest challenges can be addressed by politicians or government agencies alone. They each require cross-sector collaboration, a way of organising that we are not yet adept at. Our government has gone from being all-consumed by Brexit to Covid-19, but what progress is being made on important projects like Sláintecare in the meantime? To move the needle on wellbeing, Ireland has to get better at progressing multiple big priorities at the same time. The Government has the opportunity now to make investments that ensure our economic recovery aligns with our wellbeing improvement priorities in housing, health and climate.
By focusing our collective efforts and resources, including those of business, the citizen sector and academia, on improving wellbeing, we can embark on an exciting new direction and trajectory for Ireland. This will lead to important improvements in our quality of life and the process itself can give us all a strong sense of purpose. There’s a role for everyone in this, so find your way to contribute, however big or small. And make a start.