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Ireland needs a vision for moving “beyond GDP”, as I wrote in the Business Post
The Business Post have kindly allowed me to reproduce my article for them here for you:
The most widely used metric for assessing national economic health, Gross Domestic Product (GDP), is showing its age. It is now ninety years since economist Simon Kuznets developed it at the behest of the U.S. Senate – an achievement which subsequently won him a Nobel prize.
As early as the 1960s Senator Robert Kennedy called its value into question. Citing its failure to measure the health of children, the quality of education, the strength of marriages, the integrity of public officials, or our level of compassion, he concluded that GDP measures everything “except that which makes life worthwhile”.
An increasing number of nations are finally coming around to Kennedy’s point of view. Both the need to take environmental impacts into account and the desire to understand negative popular sentiment in objectively wealthy countries has given rise to the so-called “beyond GDP” movement.
A research paper published by the National Economic and Social Council secretariat this week (“Is Ireland Thriving?”) examines a selection of international frameworks that seek to measure aspects of national development other than GDP. The conclusion is that, comparatively, our country is thriving, inclusive, and protective of its citizens in many areas.
Ireland is ranked eighth in the world in the UN’s Human Development Index, thirteenth in the Social Progress Index, and performs strongly on many dimensions of the OECD’s Well-Being Framework. While acknowledging these positive assessments, the authors of the NESC report highlight other indicators that point to pressures on current well-being including housing availability, our high cost of living, and an incidence of low pay that exceeds the EU average.
In looking to the future, they argue that more must be done for the Ireland of tomorrow, especially in terms of climate, biodiversity, and infrastructure. Like other high-income countries, Ireland faces a huge challenge in ensuring satisfactory quality of life and prosperity within planetary boundaries.
So shouldn’t Ireland create its own framework for measuring the nation’s well-being that assesses progress in areas that matter most to our citizens? It is one of the civil service’s best kept secrets that we already have.
Ireland’s ‘Well-Being Framework’ was launched in 2021 in line with a commitment in the Programme for Government. Its eleven dimensions encompass a wide breadth of domains such as life satisfaction, job quality, community participation, civic engagement, safety and security, mental and physical health, and housing.
Paralleling international assessments, the most recent framework report identifies positive performance across ten of the eleven dimensions, with the environment being the only exception. Having said that, the analysis highlights an inequality in well-being: women, single-parent households, people living alone, immigrants, unemployed people, households with lower incomes, those in rented accommodation, and people with long-term illness or disability all experience degrees of inequality across a range of indicators.
While such a national initiative is to be applauded, what Ireland’s effort to go “beyond GDP” lacks is buy-in from the general public and a sense of ambition. Without widespread public support for its constituent elements, there can be no confidence that the areas that matter most to our citizens are included or prioritised. And without that, policy initiatives designed to drive improvements in national well-being may be misdirected.
A more fundamental question is: what improvement in well-being are we seeking for the Irish people? There are no targets in our national framework.
Changes take years, even decades, to realise. We need alignment across the political spectrum on where we want Ireland to be in 2030, 2040, and even 2050. We have achieved this before with a shared political vision for the future of healthcare in the form of Sláintecare. Why not attempt the same for the future health of the nation?
Comparative international studies are uncovering the determinants of national well-being. Factors such as income security, good healthcare, education levels, personal and political freedoms, a healthy environment, and interpersonal trust have been shown to increase happiness and life satisfaction in the population.
The good fortune offered by our corporate tax windfall allows us to invest strategically in the country’s happiness in next week’s budget. In fact, Ireland’s Well-being Framework has already begun to be utilised as a tool for assessing the impact of government budgets. The next step is to deploy an updated framework, which has public and political support, to direct budget policies and financial initiatives in the pursuit of improvements in our quality of life.
In doing so, Ireland would become a leader in deploying “beyond GDP” thinking. Ninety years is an excellent innings for any economic concept, but the reliance on GDP as the be-all and end-all of national development is finally at an end.
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The report on the census illustrates Ireland's transformation