Developing Development Indicators

Economics is largely about achieving ends—determining the best ways to arrive at a goal. For years we have known that governments, economists, and policy makers tend to overemphasize “economic growth” as if maximizing income per/person per capita was the primary goal of policy and development. Below you can see the first paragraphs of a comment referring to a new report aimed at improving techniques for measuring well-being. Click the link to see the full news article and click the link further below to go to the full report of the commission.

Towards a better measure of well-being

By Joseph Stiglitz

Published: September 13 2009 19:59 | Last updated: September 13 2009 19:59

A political leader attempting to promote the well-being of his citizens is pulled in different directions: he will be graded on economic performance but there are many other dimensions to the quality of life, including the state of the environment. While there is no single indicator that can capture something as complex as our society, the metrics commonly used, such as gross domestic product, suggest a trade-off: one can improve the environment only by sacrificing growth. But if we had a comprehensive measure of well-being, perhaps we would see this as a false choice. Such a metric might indicate an increase in wellbeing as the environment improved, even if conventionally measured output went down.

This was one of several motivations for Nicolas Sarkozy, president of France, when he established the International Commission on the Measurement of Economic Performance and Social Progress, which I chaired and for which Amartya Sen served as adviser and Professor Jean-Paul Fitoussi of the Institut d’Etudes Politiques served as co-ordinator, and whose final report is issued on Monday.

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