Can alternative economic indicators ever be any good if they are devised solely by experts?

August 21, 2014 9 By Duncan Green

This guest post comes from Oxfam well-being guru Katherine TrebeckKatherineTrebeck

Over the last few years there has been a spate of measurement initiatives – way too many to list here.

Together they represent a positive, if disparate, effort to improve the measures that we take into account when assessing the success of something – a policy, a programme, or even a country.

Many of them are part of a rather broad ‘beyond GDP’ agenda and collectively they amount to a pretty hefty challenge to a statistic (GDP) that is increasingly recognised as a weak measure of economic performance, let alone wider understandings of progress.

At one level this flurry of activity is most welcome, but my worry is that many of these initiatives risk replacing or augmenting a problematic metric (GDP) with admittedly better ones, but which nonetheless have a serious blind spot.

And that blind spot comes in the form of constituting another top-down, elite driven initiative.

Yes some enable competition between political units in a league table (see also here; here and here); and yes they offer comparability and consistency across time and geographies. But they are still concerning for several reasons.

Firstly, I can’t help thinking that since it is the elites who have got us into this mess, relying on elites to direct us out of it through their (admittedly well-intentioned) challenges to GDP seems an insufficient rebalancing of power. Most of the emerging initiatives would be considerably better than GDP (experts are experts for a reason and know their trade, so will probably come up with a product that seems sound on paper). But experts and elites on top is missing a huge part of the deeper change we really need to see.

what is wellbeingPoverty is about powerlessness. So a large part of any challenge to the causes of poverty needs to place more power in the hands of those who are excluded.

Secondly, however clever the new indicators, their democratic legitimacy and popular mandate is weak, which undermines their traction. Oxfam Scotland’s advocacy around the Humankind Index suggests that it is the effort to reach out to people – its participatory nature – that has underpinned the Index’s positive reception.

A more participatory approach has high profile backers. Five years ago, when economists Sen, Stiglitz and Fitoussi wrote their Commission on the Measurement of Economic Performance and Social Progress they called for a ‘global debate…[and] discussion of societal values, for what we, as a society, care about, and whether we are really striving for what is important’.  In the same vein, Canadian economist Mark Anielski declares that ‘future wellbeing indicator work should have a firm foundation in quality of life values expressed by citizens in the community’.

Thirdly, consulting people often results in surprises in terms of what they identify as important. However expert the experts, they are unlikely to be entirely or automatically in line with the views of the people.

For example, when the British Office of National Statistics consulted the British people as to what wellbeing meant to them, the ONS admitted they were not expecting issues such as spiritual/ religious belief to emerge as strongly as it did.

In two projects Oxfam has run – one in India (forthcoming) and one in Scotland – it emerged that when asked, people identify issues such as respect, dignity, decent work, and work that feels meaningful, as important. Similar issues also emerged in the World Bank’s Voices of the Poor project.

These are not just nuances.  If we relied only on (even well-intentioned) expert-nominated components for our measures, it is likely we would miss happiness v researcherscrucial meanings, qualifications and prioritisations. For example, most of the well-known measures of progress include a measure of employment. But people tell us it is not necessarily employment per se, but also the quality, suitability and meaningfulness of employment that shapes their ability to live good lives. If policy makers were unaware of this difference, they might (er, hypothetically of course), prioritise a form of economic development that merely created more jobs, without paying heed to their quality (you know, zero hours contracts, that sort of thing).

Finally, there is merit in creating spaces for people to talk about their priorities – in and of itself. Hall and Rickard called this ‘serendipitous benefits’. They conclude that the ‘process [of public discussion] is…important in its own right because it can empower people to undertake action in advancing well-being in society…These benefits can strengthen the machinery of democracy, make the business of government easier, and build our capacity to foster and expand the capabilities needed for meaningful participation in society’.

A forthcoming book (coordinated by the University of Bath) lays out the variety of mechanisms to create spaces for such discussions and distil their content in order to inform new notions of success. One point of unanimity amongst the authors though is that putting people at the heart of such new measures is vital.

It might be messy. It might be imperfect and flawed (I will write in due course about some of the challenges we encountered in a recent project in India, such as adaptive preferences and low expectations potentially acting as a ceiling). It might not offer so much to those who think international comparability is crucial. And it might raise legitimate questions about what is the relevant locality for discussion (ie how do we define ‘people’?)

But none of these concerns are worth sacrificing people’s voice for.