Today’s post is from Mike Salvaris, Director, Australian National Development Index (ANDI) Ltd
The Australian National Development Index (ANDI) could fairly be described as ambitious. It’s a five year national project to engage half a million citizens and a large team of university researchers in developing a new set of national progress measures. ANDI has evolved organically over time, and its present form reflects both its local origins and Australia’s participation in the larger global movement to develop societal progress measures “beyond GDP”.
How ANDI developed
Australian work in this field goes back at least 20 years. In 1993, a group of researchers and community groups successfully petitioned the Australian Parliament to set up an enquiry into new measures of national well-being. A Senate report in 1996 approved the idea and recommended that the Australian Bureau of Statistics (ABS) work with researchers, policy makers and community groups on this task. Two years later, Australia saw its first national conference on measuring progress which drew together several hundred researchers, policy makers and citizens from many different fields of social progress. In 2002 the ABS became the world’s first National Statistics Organisation to develop a new statistical model for measuring national progress; rather than simply putting existing data together in a new combination, it was based firmly on the idea that to measure a society’s progress, you must first be able to describe and define clearly what social progress looks like. (Sadly this pioneering project was discontinued this year due to agency budget cuts.)
Fast forward to 2008: a newly elected Labor government decides to convene the nation’s first ‘National Ideas Summit’, seeking new projects and new thinking for Australia’s next decade. The idea of an Australian National Development Index based on extensive community engagement and research was highly rated. Two years later, ANDI became a national, not-for-profit, citizen-owned company with a Board of Directors that included a number of eminent Australians.
Mike Salvaris explains the Australian National Development Index (ANDI) in The Zone.
In the last decade, the quest for better measures of progress and well-being has truly become a “new global movement”, as the OECD described it, noting some seventy current projects around the world. And while the OECD has played a crucial leadership role in the process through the Better Life Initiative, the movement itself has built up from the convergence of many different streams over perhaps forty years. Environmentalism, the women’s movement, the local community well-being movement, the UN Development Program and the example of world leading projects like the UN Human Development Index, Bhutan’s Gross National Happiness Index and the Canadian Index of Wellbeing and the OECD’s own earlier work on social indicators in the 1980s – all of these have played a part in the journey.
Australia has been both a contributor and a major beneficiary in this worldwide movement, so vigorously championed by the OECD. Australian researchers, policy makers and community leaders have been part of most of the key OECD forums and meetings, but also kept in touch with colleagues and projects all over the world: not just those in our part of it (Thailand, Japan, Bhutan, New Zealand etc), but in Europe, Canada, USA and Latin America.
In trying to design the best national model we can for Australia, we are very conscious of learning from global ‘best practice’. Today, with so many ideas and so many different projects in this field, there is much to choose from. But perhaps we should start with the common values and the shared experience that underlies most of these various endeavours.
What have we learned?
Two years ago at the Delhi World Forum, I tried to identify what I thought were the key conclusions and agreements that have emerged from this decade of intensive global work and thought about redefining society’s progress, and I’ve listed them below. These are now largely embodied in research articles and reports (like the Stiglitz-Sen-Fitoussi commission’s) but also in broader formal declarations like the Istanbul Declaration of 2009 and the Delhi OECD World Forum Communiqué in 2012.
- GDP may be a good measure of economic output but it is a poor measure of the quality and wellbeing of society as whole, and using it this way can distort policy outcomes in practice.
- A new model of societal progress is needed, not just new measures. True progress is an increase in equitable and sustainable wellbeing, not just in economic production.
- Measures of true societal progress must integrate the economic, social, cultural, environmental and governance dimensions of progress; and they must consider the subjective wellbeing of people and the qualities of the society, such as justice and sustainability, not just the material outcomes.
- The task of developing new progress measures is one that must engage citizens, scientists and policymakers. The process can be an important new tool to strengthen democracy, reverse the growing alienation of citizens, and create new shared visions of national progress.
- It is now time to apply these new measures and processes in practice, to planning, policy-making and government, in the media and the community.
ANDI has taken all these lessons very seriously. And while we want to build the best features of all these models into our Australian index (allowing for own special priorities and culture) we have chosen to give special emphasis to two features that will make us a little different from our colleagues (I would never say “competitors” in the present context, although it is a term Australians naturally favour).
The first difference will be in the scale and range of ANDI’s community programme (and thus, hopefully, in its contribution to the larger democratic process). ANDI will aim to engage 500 000 Australians from all walks of life and all corners of the nation in a conversation addressing the central question: “What kind of Australia do we want?”. The programme will be carried out over 2 years, through a wide array of platforms and programmes: surveys, focus groups, town hall and kitchen table meetings, social media and blogs, school curricula, film and video. It will be funded from philanthropic, corporate and community sources, and will fully utilise the extensive networks of ANDI’s 60 partner organisations and their two million members.
A second difference is in the index itself: ANDI will produce each year an index of overall national well-being, but also twelve separate indexes and status reports in each key component domain of progress. These domain indexes will be released in different months, in order to maximise publicity, discussion and policy relevance, and aggregated into the national well-being index. The aggregate index will be weighted according to the relative priorities accorded to each of the 12 component domains. This is similar to the weighting process that is possible with the OECD’s Better life Index but in ANDI’s case, the weighting will be based on a national survey rather than the preferences of self selected individuals. Collectively these features will make for a more sophisticated policy-diagnostic tool, with the capacity to identify the key driver of change in progress and wellbeing, not just at the level of broad domains, but within each domain.
Two months ago twenty entries were shortlisted for the OECD’s 50th Anniversary Video Competition. Produced by young people from around the world aged between 18 and 25 years, each of the films represents personal visions of progress in today’s world. After an international public vote to decide the most popular videos, six winners were invited to attend the OECD’s 50th Anniversary Forum. Paul Clare from the OECD’s Centre for Co-operation with Non-Members, one of the competition organisers, asked them for their thoughts on the whole experience.
That’s us – six young people, flown to Paris from places as far away as Australia, Colombia, India, Peru and Ukraine. Honestly, there had been a little uncertainty about what to expect, but we could never have imagined that we would soon be sharing such a unique and overwhelming experience.
We met people from every walk of life. Every time we turned a corner we encountered a new face with a story or idea to share. What we all found to be the most exciting was that we felt we were at the epicenter of a world exposition of ideas.
And we even had the opportunity to contribute our own ideas, in very diverse ways, such as at the launch of the extraordinary Better Life Index.
We think that the reason we were able to participate is because we portrayed a vision of progress that others could believe in. So, it’s important to realise where the OECD has come in its fifty young years, and where it is going next year, in the next decade and well into the future.
A university professor had told us: ‘Only ten years ago, the core function of such forums was to improve the finances of a select club of nations’. These past three days we have seen people excited about improving gender equality, the environment, and even measuring and improving the happiness of people around the globe.
The one over-riding vibe, however, is that the OECD is keen to break from its member country mould and allow its work to benefit billions of people. If this is not progress, then we don’t know what is.
Until the next time!
Alina, Desiree, Hew, Javier, Stephanie and Vidhya
As we mentioned a few days ago on the Blog, this week marks the launch of the OECD’s brand new Your Better Life Index . A quick reminder: The Index is designed to let you compare and contrast the various factors that determine people’s well-being – not just GDP, but a much wider range of things like education, income, housing, security and so on.
The Index was launched this morning in Paris by OECD Secretary-General Angel Gurría l, who quoted Bob Kennedy, who in 1968 said of GNP – a more traditional economic measure – that it “does not allow for the health of our children, the quality of their education, or the joy of their play; it does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials … It measures everything, in short, except that which makes life worthwhile.”
Danilo Türk, president Republic of Slovenia, spoke next and described the Better Life Index as a “very important and very precious present” from the OECD as it marks its 50th anniversary. He praised the Index’s “imagination and creativity,” and said he hoped it would help drive a rethinking of measuring progress: “I hope the quote from Kennedy will look obsolete in a few years’ time,” he added.
Inevitably, with such a new project, there were plenty of ideas from panellists at the opening sessions of the OECD Forum on how the Index could be improved and, just as importantly, made relevant to people’s lives and to policymaking.
Jacques Attali, Chairman of PlaNet Finance, a non-profit that works on microfinance issues, felt the Index needed to take more account of democracy issues, freedom of speech and corruption. He said it had become clear that these issues were missing in many international indicators, especially the Millennium Development Goals, but that they were essential to social progress.
Pravin Jamnadas Gordhan, South Africa’s Minister of Finance, said a test of the Index’s usefulness would be whether it helped publics to communicate with politicians. He warned that “significant parts of the population feel excluded,” citing groups like young people in Spain and workers in Greece. He said there was an urgent need for “ruling elites hear voices that are marginalised in society.”
Sharan Burrow, General Secretary, International Trade Union Confederation, liked the Index, but warned that its focus on a broader approach to thinking about well-being needed to be reflected in policy: “The Index means little if it remains separate from our dominant economic thinking.” She also was critical of mixed messages from the OECD: The organisation’s policy thinking on structural issues was bad for workers and would foster inequality, she said, which was at odds with that the thinking behind the Index.
Also commenting was Yoshinori Suematsu, a Japanese Senior Vice-Minister, who said the catastrophes that have struck his country this year had focused people’s attentions on what is really necessary for living a good life. One of the most important, he said was social networks, and he noted that since the earthquake and tsunami sales of engagement rings had jumped by 50% in Japan – a mark of people’s little need for engagement in a dark time.
A quick final note: The Index is already getting plenty of media coverage: “Canadians can’t complain,” reports The Globe and Mail which reckons that the Index shows Canada is a pretty good place to be. What do you think? Take a look at the Index and let us know.
“That action is best which procures the greatest happiness for the greatest numbers.” – Francis Hutcheson (1694-1746)
What’s in a number? If the number is GDP, the answer is almost everything or not enough, depending on your point of view. To some economists, GDP is a good – or as good as we’re ever likely to get – measure of progress. If an economy’s growing, then people are (probably) getting richer and able to spend more on the things they need and the things they want. Ergo, progress.
But to others, not least the Nobel laureate Joseph Stiglitz, as well as a growing number of social scientists and environmentalists, GDP leaves out a lot. (Indeed, the strengths and failings of GDP as a measure are being debated right now at The Economist.) Yes, it may show economic growth, but it doesn’t show if that growth is sustainable, if it’s creating unwanted side-effects like pollution, or who’s benefiting. To use an analogy from the WWF, GDP is a great speedometer, but doesn’t a car need other indicators – a dipstick in its petrol tank, brake lights, temperature gauge?
Such questions have come to the fore in recent decades. Increasingly, people are asking if we should pursue economic growth – rising GDP – for its own sake. In the eyes of many, growth has come to be associated with environmental disaster, growing social inequality and – especially in the wake of the 2008 financial meltdown – instability. None of this is fully reflected in GDP.
Does that matter? Yes. “Statistics are not an end in themselves,” says the OECD’s Angel Gurría. “Their importance lies in the policy discussions they stimulate as much as the evidence they provide.” In other words, what we measure governs the things we strive for, And if we can’t measure what’s really happening in our lives we won’t design policies that best serve our economic, social and environmental needs. That’s why numbers matter.
But which numbers? Over the past 80 or so years, our societies have been gathering ever more hard data – first on the economy, then on the health of our societies and later about the environment – as well as “soft” data (like, “do you feel happy?”). Indeed, so much is now available that it can be hard to work out what matters and what doesn’t. In response, there have been numerous attempts to combine data to show the progress of people and societies, for example the Genuine Progress Indicator, the UN’s Human Development Index and the European Commission’s Beyond GDP project. Governments are getting interested, too: Late last year, the UK government announced plans to measure people’s “happiness”.
The question has also been the focus of a lot of work here at the OECD – since 2008, the OECD has hosted the Global Project on Measuring the Progress of Societies, which has its own wiki – wikiprogress.org.
And next week, the story of measuring progress steps up a pace with the launch of (drum roll, please) … Your Better Life Index.
Unlike other projects, Your Better Life Index is fully interactive and reflects primarily the interests and concerns of you, the user. So, rather than the OECD ranking countries in terms of quality of life, it’s up to users like you to rate your country on the things you feel make for a better life – housing, income, education, the environment and so on. You can share your findings with other users, and over time Your Better Life Index will build up a picture of the issues that people in OECD countries and, eventually, further afield, believe are most important to their societies.
It all goes live here during OECD Week on May 24 at 10am in Paris (5pm in Tokyo, 9am in London and 4am in New York).
Today’s post is contributed by John Mutter, Professor of Earth and Environmental Sciences/Professor of International and Public Affairs and Director of PhD in Sustainable Development, Columbia University, NY
In the hours (not days) after the enormous earth and tsunami hit Japan on March 11th before it was even known that the Fukushima nuclear plant had been badly damaged and well before the scope of the mortality and damage had been assessed, the Japanese yen rapidly appreciated in value. The G7 nations moved to quickly stabilize the yen — not to prevent it from falling, but to prevent it from further appreciating.
From a geophysical point of view this earthquake and tsunami rank among the very worst things that nature can throw at us. But most economists are saying that this disaster will not hurt the Japanese economy very much in the long term. Large disasters, it turns out, are not necessarily bad for the economies of wealthier countries, including Japan. In fact, in perverse ways, some disasters can actually create economic progress.
Earthquakes, hurricanes, floods and other such disasters all cause damage in relatively restricted areas so unless the disaster makes a direct hit on an industry that is particularly critical to a country’s economy, production in the rest of the country can often buffer the effect.
The U.S., for example, is so large geographically, and its economy is also so large and diversified, that it is hard to imagine a natural disaster that would seriously impact the total national economy for very long. Regional economies, of course, can be seriously affected — but even Hurricane Katrina went relatively unnoticed in the national economy.
It makes sense then that small countries would experience greater impacts. Hurricane Mitch’s strike on Honduras in 1998 was so devastating that Honduran President Carlos Roberto Flores said that economic progress in the country had been set back 50 years. That turned out not to be quite true, but he could hardly be blamed for thinking it might be, given the devastation of that event. Virtually every corner of the country was affected. Other small countries, including Fiji, Samoa, St. Lucia and Madagascar have had similar experiences. Large countries, and wealthier countries, have not.
In Japan, most of the wealth is produced from Tokyo southward. The northern region hit by the tsunami accounts for a very small fraction of the country’s gross domestic product (GDP). Fishing and farming are just not big parts of the Japanese economy. The power plant is another story of course, and given that it supplies Tokyo with power, the disaster there is felt well outside the directly affected area. Still, the Japanese economy has not tanked and most pundits say it isn’t going to.
The immediate spike in the yen came about because Japanese people have many of their investments outside the country and it was thought they would need to bring their money back home to help them recover from the disaster so investments made in foreign currency would need to be converted back into yen. Currency traders thought that yen would become scarce and started buying up the currency, driving up the price.
That was a short-term spike and was quickly corrected but there is a deeper, and seemingly more perverse, economic current running through many disasters: There is evidence that disasters can be agents of progress. This is more than the short-term bump you might expect in the building industry.
Think about it in the same way a homeowner can use an insurance claim for fire damage to make needed home improvements. No one would replace kitchen appliances damaged in a fire with the same old models. We would all want to upgrade.
Now translate that to a national scale. If the infrastructure essential to commerce (bridges, roads, port facilities) that was washed away in a hurricane or tsunami were old and inefficient (as is often the case), and if it could be quickly replaced by much better infrastructure — particularly if that can be done using external aid, say, from the World Bank — then a lasting benefit to a country’s economy might ensue. Resources contributed to relief efforts are equivalent to an economic stimulus package.
So should we not worry about disasters? Should we just sit back, let them happen and reap the benefits?
I’m afraid not. Alas, only wealthy nations, or regions, seem to reap any “benefits.” Certainly Haiti hasn’t seen any economic benefits since the 2010 earthquake, and although much of New Orleans has come back following Hurricane Katrina, the Lower 9th Ward probably hasn’t seen much windfall, nor has the coastline of Indonesia that was destroyed in the 2004 tsunami, or any other very poor place, as far as I can tell. Perhaps the potential for a disaster windfall is just another expression of the injustice of disasters. It may even be deeply misleading.
The standard measure of an economy is GDP, the market value of all final goods and services produced within a country. It sums four components: private consumption, gross investments, government spending and the value of exports minus imports. Usually GDP per capita is employed as a welfare measure, but it is routinely criticized as imperfect, especially as a measure of the state of poor countries where so much of the economy is at subsistence level. Look at the components of GDP and it isn’t hard to see why they might all increase after a disaster — but only for countries with a lot of consumers, many investors, good government institutions and significant exports.
Other losses — such as the deaths of people who were not consuming, investing and producing exports — also don’t alter the balance of a GDP-measured economy. The economic hit a country takes from a disaster bears little relationship to mortality figures. So to the GDP economy, high death tolls are not of interest. No wonder economics is known as the dismal science.
What this all means is that standard economics will often overlook the harm disasters cause to those in poorer countries and to poorer people everywhere. It is the profound injustice of disasters.
Piranha II : The Spawning. Amblin. Dementia 13.
It wasn’t always your Avatars, ETs and Apocalypses now for famous film directors. Everybody has to start somewhere, and who knows, maybe in years to come some of the entries in our “Progress is…” video competition will achieve the same cult status as those early offerings from Cameron, Spielberg and Coppola (whose first film was actually a porno, but this is a family blog).
Anyway, if you know talent when you see it, click on the OECD 50th Anniversary Video Competition and vote for the one you think deserves to win a trip to Paris in May.
There’s a selection from all over the world, OECD and non-OECD countries, with all kinds of styles – animation, interview, mini-documentary – and an even wider range of arguments.
So, is progress something to do with education? An aspiration like sharing burdens and all of us working together? Something more abstract like balance or awareness? Or very concrete like using taxes to fund development?
Remember, you saw it first here.