We can do better than GDP

In Ruchir Shama’s opinion piece last month, he wrote about recent efforts to move “beyond GDP” and introduce new measures into policymaking circles.

Despite a combative headline and subheader, the article as a whole is thoughtful and overall fairly assesses the state of well-being metrics used by policymakers.

I currently serve as the president of Gross National Happiness USA, a grassroots network of activists, analysts, and advocates across the United States committed to changing the way we measure progress and success in this country. We believe that gross domestic product is an insufficient benchmark for measuring the well-being of a country and advocate for the use of other tools that help policymakers get a broader understanding of the well-being of their citizens.

Here I offer a few considerations that should be added to this conversation about the use of well-being metrics by policymakers.

First, for all the deification and villainization of gross domestic product in policy spheres, in political conversations, and among economists, the actual measure of gross domestic product weighs quite lightly on policymakers’ minds.

I offer you an experiment: if you are at a local candidate’s debate or having a meeting with a state legislator, congressmember, or any other politician, ask them what they think of the recent gross domestic product numbers. Read up on them beforehand or don’t: you can make up numbers. I would wager that at least three out of four times (conservatively), the politician you ask has no idea what the gross domestic product is for the state they represent or the country as a whole and could not guess reliably by how much it grew last quarter.

Does this mean gross domestic product is harmless? Not necessarily. Many who oppose the dominance of gross domestic product in policymaking believe it is the dominance of gross domestic product thinking that causes problems, not the day-to-day use of the metric in policymaking itself.

It is for this reason that I question Shama’s insistence that making per-capita gross domestic product the “main target of policymakers and the key measure of progress” will result in better policy. Policymakers consider a range of quantitative and qualitative information when drafting legislation and casting votes and I’m willing bet dimes to donuts that gross domestic product as a trend and a number is not particularly influential.

The next question is obvious: then why care? If policymaking is dominated by individual philosophies, constituent concerns, party politics, and information from interest groups, then why focus on measurement of progress and success at all?

This is a sticky question. Political Scientist Ron Haskins argues that, anecdotally, research only makes up 1% of the total consideration by policymakers when crafting policy. So are we bickering about an already-neglected slice of the pie?

The promise of evidence-based policymaking is in a sense utopian. We are fighting for facts in an age of convenient falsehoods. But anyone who has worked with policymakers or who knows one knows that, as a whole, they are people who want to know the truth.

While policymakers are often stereotyped as self-interested and political, researchers have found evidence that about a quarter of state legislators in at least one setting were enthusiastic users of research and only one in six are skeptical nonusers of research. Policymakers want information, but they want information that will help them to make better decisions and craft policy that will help the people they serve.

The way I understand good policy analysis is similar to the ancient Indian parable of the blind men and the elephant. In this story, five blind men touch an elephant. The man touching the ear describes the elephant as like a fan. The man touching the tusk describes it as like a spear. The man touching the trunk describes the elephant as like a thick snake. The man touching the leg describes it as a tree trunk. The man touching its side describes it as like a wall. And the man touching its tail describes it as like a rope. Of course each of these men are wrong in their exact assessment, but they are also right together: an elephant is all of these things.

Good public policy analysis acknowledges that good public policy is multifaceted as well. The economic analyst tells us that people as a whole are getting more of what they want. The poverty analyst is telling us how many count among the least well-off among us. The inequality analyst tells us how close or far we are from one another in income. The human development analyst tells us how much rich, educated, and healthy the population is. And the happiness analyst tells us how well people are assessing their own lives.

All of these considerations have a place in policymaking. And it is only through use of better measures that we will come closer to understanding the elephant that is better public policy in the United States and across the world.