For effective development, listen, learn and measure more than GDP
Hal Varian, Google’s chief economist, famously remarked recently that being a statistician would be the sexiest profession of the 21st century. After hearing discussions at this week’s Annual Bank Conference on Development Economics, I think he may be on to something. The conference has confirmed my view that good data is an essential ingredient for development. I’m not just talking about how data has illuminated many of the excellent conference papers and debates. I’m also talking about how data helps governments design and measure better policies for better lives.
So how should governments measure whether lives are indeed getting better? In a 2009 report commissioned by the French Presidency, Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi showed that the data used to measure success have a major influence on what societies strive to achieve – if we measure only GDP, we will strive only for growth.
But after focusing on growth for a long time, we now know that we need to look at a much more nuanced picture of societal progress – it takes more than income to make lives better. What about better health? What about a cleaner environment? These issues are important to people, and we need to start measuring them better and more prominently. In this context, I am looking forward to seeing the outcomes of the OECD’s new Better Life Initiative, which allows individuals to build a personal index using their own better life indicators.
The question of what constitutes effective development and how it should be measured is also sure to figure prominently at the Fourth High-Level Forum on Aid Effectiveness in Busan, Korea (29 November – 1 December 2011). While all countries might agree that reduced infant mortality and higher literacy rates constitute “development”, I am sure that many other priorities will differ from country to country. Discussing these priorities and deciding how to measure them will be crucial, and will rely on solid data.
Organisations such as the OECD and the World Bank, with their vast experience in producing and using good data, can certainly support such discussions. However, what we have learnt at this week’s ABCDE is that we also need to become much better at listening to our partner countries’ needs and learning how they see development. Now you may or may not view that idea as sexy, but I hope you agree that it is extremely important.
Paris21 Statistics for development