Beyond GDP: Counting What Counts

Written By Derek Storkey

Counting what Counts is the title of a report produced recently by the United Nations Secretary General’s independent high-level expert group on beyond GDP, tasked to “develop recommendations for a limited set of country-owned, universally applicable indicators of sustainable development that complement and go beyond gross domestic product (GDP)”. The report can be found here: https://www.un.org/sites/un2.un.org/files/high-level_expert_group_on_beyond_gdp_final_report.pdf 

This article is interested in the extent to which the new proposals will relate to the environment.

Why is it important? Because in order to improve something, it is necessary to be able to measure it. This document proposes 31 measures of factors relating to human wellbeing, which would be published by all countries regularly allowing a more comprehensive comparison between countries and a better assessment of their progress.

What is GDP? GDP, or Gross Domestic Product, is a measure of the economic output of a country, obtained by adding up all of the monetary outputs of individuals, businesses and government in a country. It is very widely used by economists and politicians, to compare countries and to measure economic progress in countries. Similarly GDP per capita, GDP divided by the number of people in a country, is used to compare the average standard of living between countries. For example, in this list of world GDPs, the UK comes 5th, but in this list of GDP per capita, the UK comes 19th.

As you would expect when trying to represent the complexities of a national economy by a single number, it has many shortcomings. It does not take account of how income is distributed, and it makes no distinction between sustainable and exploitative economic activity. As the report says, “GDP is an indispensable measure of economic activity, but it was never designed to capture the full range of outcomes that shape people’s lives. We have come to expect answers from it that it was never designed to give.”

The purpose of the report is to suggest further indicators which will give a ‘dashboard’ which more fully represents the economy and wellbeing of the population of each country.

The indicators are grouped into 4:

  • foundational principles: peace, human rights and respect for the planet,

  • current well-being, including work, health, education, security, personal wellbeing, social cohesion (loneliness), public services and environment,

  • equity and inclusion: wealth and income inequality, poverty, and regional inequalities, and

  • sustainability and resilience: produced capital, human capital, social capital, institutional capital and natural capital.

Disaggregation indicators: the intention is that the indicators should be recorded along with different groupings, such as region, race, religion, and, in particular, gender, allowing comparisons of the measures between these groupings, so called ‘horizontal inequalities’. The document does not specify what groupings to use, stating that the committee was unable to reach consensus.

Spillovers are effects of a country which reach beyond its borders, such as vaccination rates, anti-microbial use, and open source software. The report states that in today’s interconnected world it is not satisfactory to ignore them, but it does not recommend any measures.

Here are some examples of indicators that relate to the environment.

  • ‘Respect for the planet’: total and per capita greenhouse gas emissions, biodiversity intactness index (produced by the UK Natural History museum).

  • ‘Environmental quality’: fine particulate matter in the air, proportion of population with safe drinking water.

  • ‘Natural capital’: Environmental assets. Measures are already collected for some countries by the UN System of Environmental Economic Accounting (SEEA).

In a bid to speed implementation and acceptance, many indicators already exist. Half are sustainable development goals. Some of the chosen indicators would need to be evaluated by some sort of poll or survey.

The document is addressed to economists and demographers who will be developing and fine tuning these measures. However some indicators are not yet ready. 

Implementation The document calls for actions on individual governments, the UN, and the international statistical community. It also calls on civil society, academia and the private sector especially in cases where there may be a real or perceived conflict of interest with the national government.

Further reading

The report also includes an extensive list of references.

Derek Storkey
Next

People’s Emergency Briefing Screening