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Beyond GDP

Measuring What Counts for Economic and Social Performance

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Metrics matter for policy and policy matters for well-being. In this report, the co-chairs of the OECD-hosted High Level Expert Group on the Measurement of Economic Performance and Social Progress, Joseph E. Stiglitz, Jean-Paul Fitoussi and Martine Durand, show how over-reliance on GDP as the yardstick of economic performance misled policy makers who did not see the 2008 crisis coming. When the crisis did hit, concentrating on the wrong indicators meant that governments made inadequate policy choices, with severe and long-lasting consequences for many people. While GDP is the most well-known, and most powerful economic indicator, it can’t tell us everything we need to know about the health of countries and societies. In fact, it can’t even tell us everything we need to know about economic performance. We need to develop dashboards of indicators that reveal who is benefitting from growth, whether that growth is environmentally sustainable, how people feel about their lives, what factors contribute to an individual’s or a country’s success. This book looks at progress made over the past 10 years in collecting well-being data, and in using them to inform policies. An accompanying volume, For Good Measure: Advancing Research on Well-being Metrics Beyond GDP, presents the latest findings from leading economists and statisticians on selected issues within the broader agenda on defining and measuring well-being.

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The continued importance of the “Beyond GDP” Agenda

This chapter looks at what has changed since the 2009 Commission on the Measurement of Economic Performance and Social Progress (Stiglitz-Sen-Fitoussi Commission). It describes the contribution of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress (HLEG) to moving “Beyond GDP” when assessing a country’s health, towards a broader dashboard of indicators that would reflect concerns such as the distribution of well-being and sustainability in all of its dimensions. The challenge is to make the dashboard small enough to be easily comprehensible, but large enough to include a summary of what we care about the most. The chapter argues that what governments measure strongly influences what they do. If they do not regularly include income inequality or economic insecurity in their dashboard of indicators, for example, they may not notice that these are getting worse. The chapter also argues that distorted metrics can lead to misleading assessments, for example when gauging success solely through the lens of GDP while failing to measure the potential environmental damages caused by economic activities

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