Time for Member States to start debates on well-being
From Statistics Explained
- Published in Sigma - The Bulletin of European Statistics, 2010/02
Enrico Giovannini, President of the Italian Statistical Institute, is experienced in high-level discussions on how to improve the measurement of economic and social progress. In the wake of the Stiglitz Report, he says that it is about time the European Union (EU) Member States took action and launched broad debates to identify the factors most important for well-being.
‘This is primarily not a statistical problem. It is a political question and it is important for the government of a modern society. We need to improve existing democratic institutions, engage people in round-table discussions on measures of societal progress and statistical measurement standards,’ said Mr Giovannini.
Already in 2004, Mr Giovannini, then Chief Statistician of the Organisation for Economic Co-operation and Development (OECD), organised the first OECD World Forum on Statistics, Knowledge and Policy with the intention of promoting international research and information sharing and to allow countries to compare how they measure ‘progress’ in their societies.
Three years later, after the second OECD World Forum had attracted 1200 participants from 130 countries, Mr Giovannini realised that new measures of societal progress were of global concern, and the OECD established the ’Global Project on Measuring the Progress of Societies’.
Later that year, Mr Giovannini met with French authorities to discuss the establishment of an international commission to improve statistical information in this area.
The result of this meeting was the creation of the Stiglitz Commission, of which Mr Giovannini was also a member.
Defining indicators of well-being at a national level
The starting point for the Stiglitz Report, the European Commission Communication on GDP and beyond, as well as the third OECD World Forum, was an awareness of the need to complement GDP with measures of equitability and sustainability, and of the fact that all dimensions of well-being were not covered by GDP. Together, these initiatives contributed to last year’s intense debate on how to measure well-being and social progress.
The Stiglitz Report identified eight ‘key dimensions’ which shape people’s well-being. These concern material living standards, health, education, personal activities, political voice, social connections, environment, as well as economic and physical vulnerability. Many of these dimensions are not included in conventional income measures.
‘The European statistical system (ESS) is well advanced in most of these domains, except for political voice and social connections. But there are cross-cutting issues, such as equitability, sustainability and vulnerability that need to be developed further. It is also important that we have both subjective and objective indicators. We must start asking people how they perceive things,’ said Mr Giovannini.
Mr Giovannini believes that the domains that influence wellbeing are to a large extent identical in most developed countries. Nevertheless, he thinks, it is important that the discussion leading up to the identification of such domains and the selection of the appropriate indicators start in the Member States and not at EU level.
‘In order to gain trust and legitimacy from the citizens of Europe, it is better to go ahead with indicators decided at national level than with indicators approved at EU level that people do not trust. The ESS has done an incredible job in improving the comparability of indicators, but there’s still a problem with credibility. According to a Eurobarometer, more than 40% of Europeans don’t trust official statistics. They think that they are being manipulated,’ said Mr Giovannini.
The round tables, which should host the discussions, already exist in several countries. Well-known examples are the ‘State of the USA’ and the ‘Canadian Institute of Well-being’. In order to improve their legitimacy, these round tables ought to include representatives from different parts of society, not least the private sector.
‘During these discussions, statisticians should keep the round tables informed about progress made in domains of interest to the discussions. Statisticians, as stated in the Stiglitz Report, should not refrain from difficulties, but push ahead also in domains where results are difficult to measure,’ said Mr Giovannini.
Improving measurement of social progress and well-being is not only a question of identifying and developing new indicators, but also of using existing statistics and combining information from different domains into a coherent system. An important building block in this context is the existing framework of national accounts around GDP.
‘Within national accounts, we already have a lot of data to address the issue of well-being. In national accounts, we need a common unit and that is money. Several statistical domains or aspects of well-being cannot be measured with money. However, we should try to expand national accounts as much as possible, for example with data on social matters, such as income distribution and the satellite account for environment,’ said Mr Giovannini.
Mr Giovannini believes that as the Member States identify the domains that define well-being, the ESS should establish a common research framework and standards to facilitate and harmonise the measurement of the phenomena which have not been measured before. The result of these activities would be a set of reliable indicators that reveals the factors behind well-being and societal progress.
‘Finally, when national round tables have identified the relevant domains and the best indicators have been selected, we will have to make citizens aware of these indicators. Then we will have a good starting point for a public debate on societal progress and well-being. This is very important for the democratic process in the information age,’ concluded Mr Giovannini.
Further Eurostat information
- SIGMA - The Bulletin of European Statistics, 02/2010: GDP & Beyond; Focus on measuring economic development and well-being
- Sustainable development in the European Union - 2009 monitoring report of the EU sustainable development strategy
- Commission Communication COM final 433/2009 - GDP and beyond : measuring progress in a changing world