A Timeline of efforts to go beyond GDP.

These are the most notable efforts to replace GDP with a better measure.  There are probably thousands of other published papers and attempts that didn’t make the list even though some probably deserve to be included.  WikiProgress has a more comprehensive list with 430 different initiatives216 organizations, 65 sources of data, and thousands of articles and reports.  The really notable thing about all of these attempts is how little progress has been made.  GDP is still completely dominant and its biggest rival, the United Nation’s Human Development Index, is almost completely ignored by policymakers and other powerbrokers.

Most of the attempts to go beyond GDP have never produced more than a few years of estimates before abandoning the effort.  This list makes it look like there has been a lot more momentum in the past decade because of numerous recent projects, and some of this might be survivorship bias.  Most of the older attempts died off without leaving much trace and some of the recent attempts are probably doomed to repeat history.  But Judith Kelley and Beth Simmons have quantified the number of international performance measures and found that it is indeed growing.  The Economist magazine put their data into a graph:

The following is my timeline of notable efforts to go beyond GDP:

1947: The International Association of Research in Income and Wealth (IARIW) was founded to work on “…the development of systems of economic and social accounting and their use for economic policy; international comparisons; and other related economic and statistical matters.”  Although the AIRIW’s main works has been to develop GDP, they are also concerned with better measures and their 2017 conference theme is titled “Beyond GDP.”

1966: The IARIW began publishing The Review of Income and Wealth, a quarterly journal for the above purpose.

1972:  Measure of Economic Welfare (MEW) proposed by William Nordhaus and James Tobin

1972: Bhutan’s King coins the term Gross National Happiness in an offhand remark at an international conference.  Although his simple idea was just an old utilitarian idea, utilitarianism had gone out of fashion and his rebranding is widely cited as inspiring a multitude of mostly theoretical work in subsequent decades.  The empirical measurements of GNH that have been produced have failed to achieve widespread credibility.

1973:  The Japanese Economic Council produces a Net National Welfare (NNW) indicator under the leadership of Prof.  Shinohara based upon Nordhaus and Tobin’s MEW.

1975?: United Nations Statistics Division – Social Indicators.  Produces the oldest global “dashboard” of social indicators including measures of life expectancy, mean GDP, literacy, and other statistics.

1980:  The Physical Quality of Life Index (PQLI) by Morris David Morris was developed for the Overseas Development Council.  It is a simple weighted averaged of the literacy rate, mortality rate and life expectancy.

1990: The United Nations Development Programme releases the first annual Human Development Index (HDI).  This is the most successful alternative to GDP as a measure of economic wellbeing, but it still falls short and is mostly ignored relative to GDP.  This is why there have been so many other efforts to go beyond GDP since then.

1995: The International Society for Quality-of-Life Studies (ISQOLS).  This academic society produces dozens of proposals for improving measurements that go beyond GDP every year at its conference and quarterly journal issues.

1998: the Centre for the Study of Living Standards developed the Index of Economic Well-being, based on a paper written by Lars Osberg for the MacDonald Commission entitled The Measurement of Economic Welfare.

1999?: European System of Social Indicators (plus Japan and the US) and the German System of Social Indicators produced by the Leibniz Institute for the Social Sciences.  Now defunct.

2002: Austrailian Bureau of Statistics’s Measures of Australia’s Progress (MAP), founded, but development seemingly stopped in 2014.

2003-?: The US Government Accountability Office (GAO) in partnership with the National Academy of Sciences (NAS) begins a forum that publishes “Assessing the Nation’s Position and Progress” and “Informing Our Nation – Improving How to Assess the Position and Progress of the United States.”  This effort leads to the creation of the State of the USA in 2007 (see below).

2002?: Canadian Index of Wellbeing (CIW)

2004: China’s premier, Wen Jiabao, announced that the green GDP index would begin to replace GDP. China produced one estimate and then abandoned the effort, perhaps because it looked embarrassingly dismal compared with ordinary GDP.

2006: The United Nations Division for Sustainable Development and International Institute for Sustainable Development publish Sustainable Development Indicators: Proposals for a Way Forward.

2006: Redefining Progress publishes a Genuine Progress Indicator.

2006: The New Economics Foundation produces the Happy Planet Index.

2007: European Parliament launched its Beyond GDP initiative, in 2007, to promote “evidence-based decision-making, where the effects of policy on these indicators are quantified over time rather than simply being discussed in purely qualitative terms.”

2007: The OECD World Forum in Istanbul was entitled “Measuring and Fostering the Progress of Societies“.  This led to the establishment of Wikiprogress which is hosted by the OECD and continues to work on measuring the progress of societies.

2007:  The US GAO founded the State of the USA which is to create a Key National Indicator System (KNIS) to “to help all Americans assess the nation’s progress for themselves, at all levels, with the best quality measures,” but progress has been very slow.

2009: The Forum for a New World Governance proposes a World Governance Index which is estimated for 2008 and 2011.

2009: Report published by the Commission on the Measurement of Economic Performance and Social Progress a.k.a. ‘Stiglitz-Sen-Fitoussi Commission’ a.k.a. ‘Sarkozy commission’.  This is probably the most famous international attempt to go beyond GDP outside of the UN, but it ended up only producing reports without consensus about any concrete plan.

2009: Legatum Prosperity Index is based on 89 different variables analyzed across 142 nations worldwide.  Although Legatum uses 89 variables, they prioritize GDP per capita and ‘life satisfaction’ surveys by using regression analysis to pick 89 variables that have the biggest correlation with these two factors. This is then used to assign weights to the other 89 variables.  No wonder their index is highly correlated with GDP per capita.   One oddity is that  in 2015 they ranked the US as #1 in healthcare vs. Singapore at #14 and the UK at #20.  My best guess is that they are overweighing healthcare expenditures and underweighting healthcare outcomes.  Nobody else ranks the US at #1 in healthcare and Singapore that far behind.

2010: The United Nations changes the Human Development Index and begins using different data and aggregating the data using geometric means rather than arithmetic means.

2010: The German parliament established the Enquete Commission on “Growth, Prosperity, Quality of Life”

2010: The State of Maryland began publishing a Genuine Progress Indicator.  This seems to have built upon Nordhaus and Tobin’s MEW.

2010: UK’s Office of National Statistics began the Measuring National Well-being Programme derived from the recommendations of Stiglitz et al. (2009) and publishes the Quarterly Economic Well-being bulletin.

2011: The OECD Better Life Initiative creates annual Better Life Index.

2012:  World Happiness Report commissioned by the United Nations.

2012:  Inclusive Wealth Report first published by UNUInternational Human Dimensions Programme and United Nations Environment Programme.  Claims to be “the first serious effort to measure the true total wealth of
nations.”  Seemingly defunct after 2014.

spi-vs-gdp2013: Skoll World Forum launched the Social Progress Index (SPI) which is published by the Social Progress Imperative.  Although the SPI explicitly rejects economic variables like GDP, the index is highly correlated with the log of mean GDP as shown in the adjacent graph from The Economist magazine.

 

 

 

Recent literature reviews that have chronicled some of the numerous attempts to go beyond GDP include:

Francesco Burchi & Chiara Gnesi (2015) A Review of the Literature on Well-Being in Italy: A Human Development Perspective, by

Garry Jacobs & Ivo Šlaus (2010) Indicators of Economic Progress: The Power of Measurement and Human Welfare

Joseph E. Stiglitz & Jean-Paul Fitouss (2013) Mismeasuring Our Lives: Why GDP Doesn’t Add Up