Are our lives getting better? How can policies improve our lives? Are we measuring the right things? The OECD Better Life Initiative and the work programme on Measuring Progress answer these questions. They allow understanding what drives well-being of people and nations and what needs to be done to achieve greater progress for all.
Why measure well-being and progress?
For a number of years, there has been evidence of a growing gap between the image conveyed by official macro-economic statistics such as GDP, and the perceptions of ordinary people about their own socioeconomic conditions. While this gap was already evident during the years of strong growth and ‘good’ economic performance that characterised the early part of the decade, the financial and economic crisis of the past few years has further amplified it. Addressing such perceptions of the citizens is of crucial importance for the credibility and accountability of public policies but also for the very functioning of democracy.
What is progress?
Societal progress is concerned with improvements in the well-being of people and households. It requires looking not only at the functioning of the economic system but also at the diverse experiences and living conditions of people. The OECD framework for measuring well-being and progress, based on the recommendations made by the Stiglitz-Sen-Fitoussi Commission, can be categorised into three distinct areas: material well-being, quality of life and sustainability.
- Measuring people’s material well-being requires not only their income but also their assets and consumption expenditures. It also requires taking account of goods and services produced by households for their own consumption that are never bought or sold, and so which don’t appear in traditional economic measures.
- Economic resources, while important, are not all that matters for the quality of people’s life. Health, human contact, security, and free time are all fundamental to our well-being, as is people’s subjective experience of life. Measuring quality of life requires looking at all of these elements as a whole: economic and non-economic, subjective and objective.
- Finally, a concern with sustainability implies a need to look at whether the levels of well-being can be sustained over time to ensure that what matters for our lives today can be passed on to future generations.
Inspiration: OECD’s 50th Anniversary: Better Life Initiative