Filed under: Development Health Social inclusion

Pankisi, Georgia

Defining and tracking the meaning of progress is an old challenge. From time immemorial people have been aware that money is merely a means – and not a goal of its own.

We know that apart from income, other important parts of life provide meaning for people. Some are difficult to quantify, but this does not make them any less relevant. Unfortunately, people tend to forget the obvious. For decades mainstream policy thinking was hijacked by a different paradigm – one built around the assumption material gain translated into human development and happiness.

Get richer and you’ll be happier, the logic went.

The dominance of gross domestic product (GDP) as the major indicator of human progress is a reflection of that paradigm and of the asymmetrical importance money and income is thought to play in people’s lives today.

Focusing on happiness is important for getting the basics right. Focus is on the ultimate goal and not on the means for achieving it. At the end of the day, what matters for each individual is quality of life – being healthy, having decent education for your children, living in a community that respects and values you, being free to live your life.

The material means necessary to achieve these goals vary dramatically across countries – for example just compare the cost of health services.

Attempts to quantify and monitor happiness, or to monitor subjective well being, are contextually close to quantifying and measuring human development. Both focus on the ultimate outcomes of development efforts and look at material wealth as a necessary means for achieving it. Both address the issue of a “conversion coefficient” – the extent that income is translated into lasting human development (or happiness).

This is why the correlation between the value of “perception of happiness” and that of human development index (HDI) is not surprising.

There are important differences between countries and groups of countries (See Figure 1, based on the World Happiness Report, and the 2011 Human Development Report). The correlation is more clearly pronounced for European Union (EU) member states, where an increase in feeling happy is generally associated with an improvement of HDI (the two outliers here are Bulgaria and Romania where people appear to be significantly less happy than one could expect from their level of human development).

Relationship between feeling of happiness and HDI

Figure 1: Relationship between feeling of happiness and HDI

The picture is different for the rest of the world, where the relationship is much weaker, particularly in non-EU European countries and Central Asia, where it is even reversed.

This snapshot of data on the two leading alternatives to GDP-based measures of progress is illustrative both of the complexities of those concepts and the challenges they face. One would hardly object to pursuing happiness – or, respectively, human development – as the ultimate objective of individual people’s efforts and of governments’ development endeavors, but quantifying happiness faces a number of challenges and risks.

Two groups of problems stand out. One is related to the subjective nature of happiness (and indicators trying to capture it). Happiness is elusive, largely subjective and highly contextual. Being happy or unhappy is not just individual status (physiological, material or psychological). It varies depending on an individual’s position vis-à-vis other members of society.

For example, appreciation of one’s efforts is important for feeling happiness but equally important is how somebody else’s similar efforts are appreciated. The ingredients of happiness, and ways of reaching it, also vary from individual to individual and from culture to culture.

The process resembles a “black box” – we know the inputs, the outputs, but not the mechanism inside. So measuring changes in levels of happiness could be an aggregate outcome indicator, but it would be highly challenging to establish causality between policy measures and the change in its value.

Of course, it is possible to address the perceptions directly. The subjective nature of happiness justifies using subjective perceptions as a gauge to assess progress or decline. Perceptions however can be – and too often are – subject to manipulation. Consistent media exposure of horrors from all over the world in combination with the relational nature of happiness can easily produce “thank goodness I survived today!” attitude boosting directly “happiness performance” indicators.

The subjective nature of happiness can also be used to camouflage failed development policies in countries with “poor but happy” people – another opportunity for manipulation.

The second group of challenges is related to the globally dominant consumption-based economic model. The “happiness-based” (and human development based) paradigms are implicitly questioning it. Both advocate that development is about people and enhancing their potential to be and do (and not to have). The existing economic system however has effectively reversed the relationship between economic output and human development, or happiness.

As consumers, we are flooded with cheap, disposable goods that are supposed primarily to boost demand – and less so to enhance meaning in people’s lives. Economic output has turned from a means for expanding people’s choices and opportunities into the sole measure of growth – with incomes and jobs kept hostage to expanding consumption that leads to unsustainable depletion of the planet’s resources.

The shifting role of consumption from a means to an end is one of the reasons why increase in income is not associated with a similar increase in happiness. Another is the multidimensional nature of happiness in which income and employment are just two in a much broader range of contributing factors (Bhutan’s “Gross National Happiness” index is comprised of 33 indicators for nine thematic areas).

This is why policies focusing on boosting consumption inevitably come at the expense of other aspects of happiness, effectively reducing opportunities for expanding the latter.

Another element of the current economic model (and also of the Eurocentric value system) is its expansionist nature. Focusing on what we don’t have yet – instead of valuing what we do have before we lose it – is an intrinsic part of that culture.

Similarly, we tend to seek happiness “out there” and not inside one’s mind and soul. Reaching a balance between “reaching out” and “looking inside” would require a cultural shift.

All this suggests that keeping happiness as a clear policy objective is important but difficult and risky. Focusing just on subjective perceptions is not sufficient. A robust “happiness index” should be a combination of status and perception indicators.

Designing such indicators is the minor challenge. The difficult – and most important – part is changing policies from a consumption-driven to “meaningful life driven” pattern. This entails a fundamental shift in values – something extremely difficult – but not impossible.

Making this shift is important not just for the “happiness agenda” but most of all, for sustainable development. The overlap of sustainability and happiness is what gives the latter a chance.

This post was originally published in Polish by Instytut Obywatelski as a part of a broader expert debate on the issue.