The measure of poverty

We’ve both got a dozen loaves. On average of course.

The economic crisis recedes in the rear-view mirror, but its impact on people’s lives remains visible. Two groups show particular signs of lingering economic hurt – the poor and the young. According to the OECD, poverty rose by 2 percentage points in rich countries between 2007 and 2011, and by rather more in countries like Spain and Greece.

Now, if you’re a regular reader, you may be asking yourself, what sort of poverty? The answer is a little complicated, but it helps to illustrate an important idea: Standard measures of poverty don’t always tell us what’s really happening in people’s lives. That can be especially true during a recession in developed countries and, as we’ll see later, for people living in – or on the edge of – poverty in developing countries.

For OECD countries, the most widely used poverty measure is “relative poverty,” or the proportion of people earning less than half their country’s median income. (Median income is the point that separates the top half of earners from the bottom half.)

But there’s a problem with “relative poverty”– it’s … eh, relative. It tells you only how a person or a group is faring compared to the general population. That can become an issue during a recession, when there may be a general decline in people’s income (and, thus, in median income). As a result, even if poorer people are suddenly earning a lot less, they may not be very much worse off in relative terms.

And that’s pretty much what happened in the wake of the financial crisis. Poverty certainly deepened between 2007 and 2011 in OECD countries, but relative poverty didn’t change all that much.

This explains why OECD inequality data also looks at what’s called “anchored poverty”. In effect, instead of looking at how low earners are doing compared with the current median income it looks at how they’re doing now compared to sunnier economic times, in this case 2005.

This anchored measure reveals sharp rises in poverty in a number of OECD countries between 2007 and 2011. It rose by almost 15 percentage points in Greece and by around 8 points in Ireland and Spain. According to the OECD, the rise in poverty during the crisis in recent years erased “a significant part of the gains in living standards achieved by low-income households over the past 20 years.”

What about young people? The OECD data show that they suffered the biggest income losses during the four years of the recession. Based on household disposable income (essentially, income minus taxes paid to, and benefits received from, the state), the young saw their incomes fall by 1% compared with a drop of 0.7% for older adults (25 to 65). In some countries, most notably Greece, Iceland and Ireland, the losses were much higher. The only group that didn’t suffer was the over-65s. They actually saw a rise in income, 0.9%, that was only slightly smaller than the loss among the young.

This data add to a picture of a long-term economic slide among young people. Today, they are the age group at the greatest risk of income poverty while the over-65s are least at risk – a reversal of the situation 25 years ago.

The OECD isn’t alone in trying to dig beneath the usual measures of poverty. Recently, the OPHI, a development research centre at Oxford University, released the latest edition of its Global Multidimensional Poverty Index. This seeks to measure deprivation not in traditional monetary terms – the famous “dollar a day” – but in terms of people’s ability to meet their basic needs, such as nutrition, and their access to what most of us would regard as basic services, such as clean water and schooling. As Oxfam’s Duncan Green notes, “being poor and sick is very different from being poor and healthy”.

Judged by this multidimensional measure, the number of people living in poverty in developing countries is not the widely cited figure of 1.2 billion but rather 1.6 billion. More than half of these live in south Asia with 29% in sub-Saharan Africa. What’s perhaps most striking is that most of them – about 71% – live not in “poor” countries but middle-income countries. Just as with the widening income gaps in the rich OECD countries, this continuing poverty amid growing prosperity raises a nagging question: Why isn’t economic growth benefiting more people?

Useful links

OECD Income Inequality Update (June 2014)

OECD work on inequality and poverty and inclusive growth.

OECD work on development.

The transatlantic trade deal must work for the people, or it won’t work at all

Unions TTIPOn June 16 we published an article by EU Trade Commissioner Karel De Gucht on the Transatlantic Trade and Investment Protocol (TTIP). Today, Bernadette Ségol, General Secretary, European Trade Union Confederation (ETUC) and Richard Trumka, President, AFL-CIO and of the OECD’s Trade Union Advisory Committee (TUAC) reply.

In 2013, the United States and the European Union began talks on the Trans-Atlantic Trade and Investment Partnership (TTIP). The AFL-CIO and the European Trade Union Confederation (ETUC) believe that increasing trade ties could be beneficial for both American and European workers, but only if TTIP promotes a people-centered approach which considers the interests of the public and not just those of corporations. As with all other economic relationships, the rules of the TTIP will matter because TTIP is about much more than just trade. Its rules will make the difference between a Trans-Atlantic New Deal, which envisions an important role for democratic decision making, and a Trans-Atlantic corporate hegemony that privatizes the gains of trade while socializing the losses. Increasing trade between the U.S. and the E.U. can only help create quality job growth with shared prosperity on both sides of the Atlantic if the project is approached and concluded in an open, democratic, and participatory fashion and with these goals in mind.

Unions believe that TTIP could represent a “gold standard” agreement that improves living and working conditions on both sides of the Atlantic and ensures that standards are not lowered. However, the risk of the current model of trade and economic integration agreements to democratic decision making cannot be overstated. The U.S. has already lost state-to-state challenges to its anti-smoking, meat labelling, and tuna labelling policies, and even now, European multinationals are using the investor-to-state system to challenge decisions to phase out nuclear energy and raise minimum wages. Simply put, these policies are part of a government’s most basic responsibility to promote the general welfare of its people.

Trade and investment rules that not only allow but promote such challenges undermine support for trade even as they reduce the ability of governments to be more responsive to their publics than they are to well-heeled global corporations. This is no accident. Global corporations have long wanted to “overcome regulatory sovereignty,” See, for example Trade on the Forefront: US Chamber President Chats with USTR, and NAFTA Origins: The Architects Of Free Trade Really Did Want A Corporate World Government.

We envision a set of rules that respect democracy, ensure state sovereignty, protect fundamental labour, economic, social and cultural rights and address climate change and other environmental challenges. In a people and planet-centred agreement, the negotiators should consider: how will this decision create jobs, promote decent work, enhance social protection, protect public health, raise wages, improve living standards, ensure good environmental stewardship and enshrine sustainable, inclusive growth? If negotiators are not pursuing these goals, the negotiations should be suspended.

Rules on the protection of workers should not in any way be regarded as trade barriers. The TTIP should not undermine provisions for the protection of workers set down in laws, regulations or collective agreements, nor collective trade union rights such as freedom of association, the right to collective bargaining and the right to take industrial action. The TTIP must ensure that all parties adopt, maintain, and enforce the eight core conventions of the International Labour Organisation for all workers, as well as the Decent Work Agenda, and that those minimum standards set a starting point for regular improvements that are built into the architecture of the agreement. The U.S. and EU should also explore adopting transatlantic mechanisms in line with EU instruments to provide for information, consultation and participation of workers in trans-national corporations; stronger protections for workplace safety and health; and requirements to ensure “temporary” workers receive equal treatment with regard to pay, overtime, breaks, rest periods, night work, holidays and the like. In other words, the TTIP should not just raise standards for those whose standards currently do not measure up, it should create a system for continuous improvement.

This must include advancing democracy in the workplace. Only when workers are free to organize, associate, peacefully assemble, collectively bargain with their employers and strike when necessary can they provide a vital balance to the economic and political influence held by global corporations.

The TTIP must be aligned with—and never work at cross purposes to—international agreements to protect the environment, including commitments to slow catastrophic climate change. As part of its rules, the TTIP must advance a sustainable balance between human activity and the planet. Rules must not encroach or dilute national and subnational efforts to define and enforce environmental rules, measures and policies deemed necessary to fulfil obligations to citizens, the international community and future generations. Rules must respect the right of parties to prohibit corporations from capturing gains through predatory extraction, unsustainable resource utilization, and “dumping” of pollutants and refuse.

The TTIP must have at its core state-to-state commitments and modes of conflict resolution; it must reject all provisions that allow corporations, banks, hedge funds and other private investors to circumvent normal legislative, regulatory and judicial processes, including investor-to-state dispute settlement (ISDS). State-to-state commitments and enforcement mechanisms reinforce the notion that the agreement is between sovereign nations, for the benefit of their citizens. It also recognises the right of different states to make different choices about how to best promote the general welfare. A hold-over from the discredited era of market fundamentalism, ISDS is used by private actors to constrain the choices democratic societies can make about how best to protect the public interest. It gives the government’s duty to secure the general welfare the same status as private interest in profit—undermining public trust and placing governments in the position of having to pay a ransom to protect the public interest. At the same time, investors must assume their responsibilities, and it is imperative that respect for instruments such as the OECD Guidelines for Multinational Enterprises be fully be integrated in TTIP. We also ask that Contact Points meet the highest standards and those in EU countries be better coordinated.

Only when American and European workers can meaningfully participate in the development and design of the TTIP will they be confident that it is being created for their benefit, rather than as a secret deal that will amplify the influence of global corporate actors and diminish the voice of the people. Secret trade deals may have been appropriate when they were limited to tariffs and quotas, but given the broad array of issues covered under “trade” agreements – including healthcare, intellectual property, labour, environment, information technology, financial services, public services, agriculture, food safety, anti-trust, privacy, procurement, and supply chains – secrecy can no longer be defended. The proper place to debate and reach agreement on these domestic policy issues is in the public forum—if an idea cannot stand the light of day, it must not be pursued.

The AFL-CIO and the ETUC are united in a commitment to ensure that the TTIP represents a global new deal that would create high quality jobs, protect worker rights and the environment and benefit workers on both sides of the Atlantic. A new trade model that puts people first can create a high standard for not only the US and the EU, but for global trade. Workers deserve a deal that delivers improved living and working conditions on both sides of the Atlantic.

Useful links

OECD work on the benefits of trade liberalisation

Bernadette Ségol and Richard Trumka talk about the TTIP

How to stop businesses behaving badly

"Safe and hygienic"? Rana Plaza, 24 April 2013
“Safe and hygienic”? Rana Plaza, 24 April 2013

Forty of the 100 largest economic entities in the world in 2012 were corporations, not countries, according to business consultants Global Trends. The sheer size of multinational enterprises (MNEs) leads many citizens to worry that they will abuse their economic power and political influence. This is not a new concern, and in fact was one of the reasons the OECD produced its Guidelines for Multinational Enterprises in 1976. The original Guidelines were published as an Annexe to a Declaration on International Investment and Multinational Enterprises. At the time, much of the pressure to create some kind of framework for MNE activities came from the firms themselves.

After the Second World War, government intervention in the economy was direct and widespread, through nationalisations and strategies designed to build strong national champions in key domains. At the same time, today’s highly integrated, globalised economy was starting to emerge, and companies at the forefront of the process wanted reassurances that their investments abroad would be safe and government regulation would not constrain them too much.

There were calls for new rules from other points of view too, for example trade unions, but also from developing countries. The OECD texts actually came two years after the UN’s Charter of Economic Rights and Duties of States.

Given the impenetrability of much official language, then as now, the Guidelines were remarkably clear and straightforward, saying in a few dozen pages what companies and governments could and could not do, and recognising that there are problems, not just “challenges”. Subsequent revisions have respected this approach, for example stating that enterprises should: “Contribute to the effective abolition of child labour”; or “Not discriminate against their employees… on such grounds as race, colour, sex, religion…”.

The big question of course is how useful the Guidelines are in making corporations behave responsibly and resolving conflicts between firms and the communities they operate in. The Guidelines are not legally binding and contain no means of punishing companies that don’t respect them. They operate through National Contact Points which are expected to help resolve issues concerning implementation of the Guidelines. points out, “In the specific instance mechanism, the Guidelines possess a unique feature that provides the means to actively attend to and potentially resolve conflicts between aggrieved communities and companies”.

The Guidelines act as a global benchmark of corporate social responsibility and a strong signal of a government’s attitude towards corporate behaviour. They can also inspire actions that will be pursued through other instances. However, their biggest impacts could be due to reasons the creators of the original text could not have foreseen.

At the time of the 2000 revision, NGO Corporate Watch published a particularly severe criticism of the Guidelines, saying they were little more than a PR handbook. This criticism was echoed elsewhere, since even if a National Contact Point made a strong recommendation, the means to verify its implementation were usually missing, or beyond the means of those bringing the case. That’s still true to some extent, particularly in non-democratic countries, but the sudden, massive expansion of modern means of communication and social media over the past few years has changed things.

This is altering the balance of power between those with something to hide and those seeking to expose it. When the Guidelines were created, few cases got much attention in national let alone international media. In August 2010, when trade unions in France and the USA announced they were going to bring a case under the Guidelines concerning labour practices in Colombia, the news was published in the Internet editions of major newspapers even before the unions had time to update their own websites.

The fact that workers in North America, South America and Europe can mobilise so easily around a common grievance, and see the Guidelines as the best tool for doing so, suggests that an Annexe published nearly 40 years ago can be a useful weapon in the fight to make the 21st century economy fairer. And as the Colombia case shows, the company doesn’t have to be operating in the OECD area, it only has to be registered in a country that has signed up to the Guidelines. That’s why the WWF were able to bring a case against UK oil company Soco under the Guidelines last year to stop them drilling in the Virunga World Heritage site in the DR Congo. Earlier this month, Soco announced it was ending its operations in Virunga.

But despite every big company now boasting about their ethics and efforts, there is still a large gap between what responsibility means in theory and how it is implemented on the ground. At the OECD’s Global Forum on Responsible Business Conduct this week, policy makers, businesses, trade unions, and civil society are debating how to bridge that gap. There are some fairly technical sessions on how the Guidelines work, but most of the Forum will be looking at controversial issues including the clothing industry after the Rana Plaza tragedy in Bangladesh; investing in Myanmar; due diligence in the extractive sector; agricultural supply chains; and responsible business conduct in the financial sector.

Useful links

OECD work on corporate governance

OECD Watch, an “international network of civil society organisations promoting corporate accountability and responsibility”

What teachers – and the rest of us – can learn from the OECD Teaching and Learning International Survey – TALIS

TALIS 2013Today’s post is by Andreas Schleicher, Director of the OECD Directorate for Education and Skills

We entrust our children – and our countries’ future – to teachers; but do we really know how they feel about teaching, or what teaching practices they consider effective, or what makes them successful in their work? Today we reveal the results from our Teaching and Learning International Survey (TALIS), which asked more than 100,000 teachers in 34 participating countries about how their daily work is recognised, appraised and rewarded, about their attitudes towards teaching, and about their own experiences as lifelong learners. The results are important.

For example, if a teacher is convinced that students learn better when they are encouraged to think through and solve problems on their own, then they are likely to use more active, student-centred approaches to teaching and learning, such as having students work in small groups or doing project work. Indeed, TALIS shows that over 90% of teachers believe that students should be allowed to think of solutions to a problem themselves before teachers show them the solution. But in Italy, Norway and Sweden, only between 45% and 59% of teachers agree that students learn best by trying to solve problems on their own.

No matter how good teachers’ initial teacher education was, it won’t have prepared them for all the challenges they face in the classroom. TALIS shows that induction and mentoring programmes can provide teachers new to a school or new to teaching with invaluable assistance; and participating in professional development activities throughout a career hones teachers’ skills even further. These activities do not have to be costly or involve external experts. For example, TALIS shows that mentoring systems can be based on collaboration with other teachers in school. Teachers can also form, or join already established, collaborative research groups and teacher networks, and/or simply observe their colleagues as they teach.

TALIS also shows that constructive and fair teacher appraisals and feedback have a positive effect on teachers’ job satisfaction and on their confidence in their abilities as teachers. Some 88% of teachers, on average, said that they receive feedback in their school. But in Denmark, Finland, Iceland, Italy, Spain and Sweden between 22% and 45% of teachers said that they have never received feedback in their current school. That’s very disappointing, because feedback makes such a difference. On average across countries, 62% of teachers said that the feedback they receive in their school led to moderate or large positive changes in their teaching practices: more than one in two teachers said moderate to large improvements in their use of student assessments (59%) and in classroom management practices (56%), and 45% of teachers said that feedback led to moderate or large improvements in the methods they use for teaching students with special needs. What this tells us is that teachers can use appraisals and feedback as tools to improve teaching practices that will, in turn, improve student learning. They should also work with other teachers to develop a system of peer feedback on all aspects of teaching, from lesson planning and classroom practice to student evaluation.

While in many countries there is a lot of debate about the ideal class size, TALIS finds that class size has no measurable impact on teaching efficacy. But teachers who reported that they teach classes where more than one in ten students are low academic achievers or have behavioural problems also reported significantly lower levels of confidence in their abilities to teach, or what is known as self-efficacy. Yet TALIS also finds that having good relations with students and with other teachers in school can at least partly offset the negative impact of teaching these kinds of classes.

Most encouragingly, nine out of ten teachers across countries said that, overall, they are satisfied with their jobs, and nearly eight in ten said they would still choose to become teachers if they had to make the decision all over again…even though fewer than one in three teachers believes that teaching is a valued profession in society.

So what can teachers learn from these findings? Since TALIS finds that teachers who participate more in decision making in their school are also more likely to believe that society values teachers, they should be open to work together with colleagues and school leaders. If formal collaborative activities aren’t already established, they should take the initiative to create them. They should also take advantage of professional development opportunities, especially if they are provided in the school and involve colleagues.

And what can the rest of us learn? That we need to value our teachers more and treat them like the professionals they are.

Useful links

Teaching and Learning International Survey (TALIS)

How’s Life in your region?

BLI regionalHow’s life in your neighbourhood? Do you take reviving lungfuls of clean fresh air when you step outside your front door, or struggle to peer through a miasma of polluted particles? Is it easy to find a job or is unemployment higher than in neighbouring areas? When it comes to measuring wellbeing, national figures are all very well, but they cannot tell you what it’s like to live in a particular region or city.

Our day-to-day experience is essentially local – how easy is it to find a job, is there good Internet access and how clean is the air? And how can you find out these things about a new area?

The OECD’s Regional Wellbeing tool enables you to do just that. It compares wellbeing indicators for 362 OECD regions in eight topics – income, jobs, health, access to services, environment, education, safety, and civic engagement. A score has been calculated for each topic and you can compare your region with other regions in your own country, or with regions in other countries. So you can discover, for instance, that northeast England and Utah have a similar wellbeing level, or that life in Nunavut in Canada is similar to that in Chihuahua, Mexico, at least from a wellbeing standpoint.

But why should we care about regional wellbeing? For one thing, metropolitan areas are a major source of economic growth. More than 50% of economic growth and job creation in the OECD area occurs in the 275 metropolitan regions (each with a population of more than 500,000). But now in almost half (45%) of these metropolitan areas unemployment is higher than for the national economy. Once you know that a disproportionately high share of national unemployment is concentrated in a limited number of regions, and which ones they are, you can start to look at regional policies that can help. Does the workforce in the region have a good level of education? The regional wellbeing tool can tell you what proportion of the population has at least completed high school. In Korea the capital region scores highest on a national comparison, and in the top 28% among OECD regions.

If health is what matters to you most, then perhaps your region should take a leaf out of the Ile-de-France’s book. The area round the French capital is the top area in France in health, and in the top 1% among OECD regions.

The new regional tool follows many of the topics already covered at national level in the OECD Better Life Index, and brings wellbeing measures down to a more local level. So, how’s life in your region?

Who listens to policy advice, and what happens when they do?

Container cranes
Providing leverage

Today’s post is by Erik Solheim, Chair of the OECD Development Assistance Committee

Countries applying the right policies have achieved remarkable development success over the past 50 years. In the space of just two generations, South Korea went from being one of the poorest countries in the world to one of the richest by choosing the right policies on trade, investment and education. One of the main tasks of international organisations such as the OECD is to advise governments on policy. Research and policy papers should make a difference in the real world and improve people’s lives. So a recent report by our colleagues at the World Bank came as quite a shock to many in the “policy community”: nearly one-third of the Bank’s policy reports on economic sector work or technical assistance had never been downloaded and almost 87 percent was never cited. How about the OECD? How do we know that our work is having any influence?

One way is through regular assessments. The Development Assistance Committee for example wanted to know in more detail about the impact of the OECD contributions to the Aid for Trade Initiative led by the World Trade Organization, which aims to build the supply-side capacities and infrastructure that developing countries need to turn trade opportunities into trade flows. There is now abundant evidence of the effectiveness of aid for trade programs. According to research, 1$ in aid for trade is associated with an 8$ increase in exports for all developing countries, 9$ for the low and lower-middle income countries and as much as 20$ for the least developed countries. These results confirm the findings of other empirical studies and clearly signal the effectiveness of aid for trade. Aid-for-trade programs lower trade costs through additional infrastructure, better institutions such as customs and standards authorities, as well as more trade-friendly policies and regulations. It is particularly effective when recipient countries have stable macroeconomic policies and a business environment that encourages private investment. The big question is how the OECD contributes to this success.

Based on interviews, surveys and a literature review, independent evaluators recently reported that monitoring, policy analysis, and policy dialogue, OECD’s three main outputs in this area, are highly regarded. In terms of relevance, the evidence strongly suggests that our contributions have been central in establishing the credibility of the Aid-for-Trade Initiative, and in shaping the ways in which countries and organizations design and implement their aid for trade programmes. The monitoring activities were found to be the most effective, although the findings for policy analysis work and policy dialogue were also strongly positive.

As World Trade Organization Deputy Director General Agah commented “the OECD has been the linchpin of the Initiative.” In fact, many aid-for-trade practitioners and academics suggested that without the data from the OECD Creditor Reporting System, serious monitoring and evaluation of aid for trade would be close to impossible. They highlighted that data production and dissemination have the characteristics of a “global public good”, meaning a good which is accessible to everyone and whose consumption by one person does not reduce the amount available to other people. Allow me to return the compliment and add that the leadership of the World Trade Organization has been the key to the success of the Aid-for-Trade Initiative.

These finding are corroborated by an earlier OECD and World Trade Organization survey which concluded that “… donor agencies consider the monitoring of aid for trade either very useful or useful, while providers of South-South co-operation were also positive.”

The joint publications with the World Trade Organization are widely disseminated and more easily used by non OECD members. For instance, the 2013 joint publication Aid for Trade at a Glance: Connecting to Value Chains attracted 150,000 unique views on the websites, and on this blog, articles on Aid for Trade are among the most popular.

The evaluation also found the Aid-for-Trade Initiative has led to broad-based engagement from donors (bilateral, multilateral and providers of South-South cooperation), developing countries, in particular the Least Developed Countries, the private sector, non-governmental organizations and academics. It has encouraged closer cooperation between the development and trade community, including in non-OECD Member countries.

This partnership has resulted in greater awareness about the positive role of trade for economic growth and development, mainstreaming trade in development strategies, and alignment of aid around trade-related development priorities. Over the past decade, donors have more than doubled their assistance to aid for trade, reaching 53.8 billion US dollars in 2012.

Despite these positive results, there is room for improvement. OECD should further engage providers of South-South co-operation and the private sector. It is necessary to expand the focus from development assistance to development finance to mobilize more resources. We are working to improve the conditions for regional projects and better manage Aid for Trade and development results. The Global Review on Aid for Trade – the pre-eminent forum for discussing trade and development issues – must continue to put a spotlight on aid for trade and in particular these issues. Finally, with inclusive economic development becoming a central theme of the post-2015 development debate, there is a clear on-going role for aid for trade to contribute to more inclusive economic development.

To answer the question the headline asks, good policies can for sure lead to economic gains and development in the long term.

Useful links

Aid for Trade

Does happiness score goals? The Better Life Index meets the World Cup

BLIDo happy countries make great football teams? With the World Cup in full swing, we have already seen some great wins and some devastating losses. But do the performances of the players and the team reflect the situation back home?

The favourites, Brazil, definitely seem like a cheerful bunch with their colourful banners and clothes, their samba dancing, and their extravagant style of football. But looking at how they score in the 11 Better Life dimensions may give a different picture. Compared with other countries, Brazil performs well in only a few dimensions. A fact that has sparked great controversy, as 11 billion dollars were spent on the World Cup preparations, money that some argue could have gone into raising Brazil’s well-being ranking.

And what about the skilful Italians or the precise-passing Spaniards? Both are considered world champions in football but when it comes to better life they are not among the highest performers. On the other side of the post, the winning country for well-being is Australia, as it ranks above average in all aspects of well-being, except for work-life balance. Unfortunately, the Australians’ ranking in football does not match their better life ranking, and their performance so far has not been so joyful, with a 3-1 defeat by Chile.

In some cases correlations can be found between well-being and happiness. For example, Germany, which out-ranks Portugal in all the better life dimensions apart from housing, annihilated the Portuguese 4-0 in their last game, and overall they win by 10 games to 3. However this is an exception, and even if we only consider life satisfaction i.e. how happy people are with their life, the two rankings still do not add up. Although the Brazilians score a lot of goals in life satisfaction, giving a 7.2 grade to their overall satisfaction with life, many other footballing nations don’t score high. Furthermore, using the 2013 Gallup Positive Experience Index we see that four of the the top five countries (Paraguay, Panama, Guatemala, Nicaragua and Ecuador) did not even qualify for this year’s World Cup, Ecuador being the happy exception.

Maybe more of a case can be made for the positive effects of football on a country’s happiness. In a 2012 OECD report it was found that football could improve social cohesion with programmes, such as “Goals for a Better Life” in Colombia, that promote education through football. Football also has the potential to break down social boundaries by including people of all ages, gender and ethnic background in one activity. Thailand’s new rulers believe so much in the power of football to make people happy that they have ordered free World Cup TV for the population as part of their “happiness campaign”.

On a national level, hosting an international event such as the World Cup can have benefits for the host country by improving infrastructure, increasing tourism and trade and creating a sense of national pride. Following their analysis on the impact of Football for the Socio-Economic Development of Brazil, the Fundacao Getulio Vargas, believe that if well-harnessed, the World Cup could take Brazilian football to the same position off-pitch as on the field.

There is, however, a dark side to football. Although it can foster social inclusion, it can also worsen social exclusion and can amplify existing problems such as discrimination. Also, if not done right, hosting a major event can have a negative effect on a country’s image and hinder future investments. As we have seen in Brazil, the World Cup has caused huge controversy and the jury is still out on whether or not it will be a good thing for the country.

It seems then, that the relationship between football and happiness is unclear. Happiness does not necessarily make a good football team, just as football does not make a country happy. Maybe the real joy comes from simply watching your team play, regardless of whether your country or team is doing well.

But if happiness doesn’t make a great team, what does? Is it team tactics, players’ salaries, fan support…? Decide for yourself by playing our new game where the Better Life Index meets Fantasy Football.

Fantasy football