Can alternative economic indicators ever be any good if they are devised solely by experts?

This guest post comes from Oxfam well-being guru Katherine TrebeckKatherineTrebeck

Over the last few years there has been a spate of measurement initiatives – way too many to list here.

Together they represent a positive, if disparate, effort to improve the measures that we take into account when assessing the success of something – a policy, a programme, or even a country.

Many of them are part of a rather broad ‘beyond GDP’ agenda and collectively they amount to a pretty hefty challenge to a statistic (GDP) that is increasingly recognised as a weak measure of economic performance, let alone wider understandings of progress.

At one level this flurry of activity is most welcome, but my worry is that many of these initiatives risk replacing or augmenting a problematic metric (GDP) with admittedly better ones, but which nonetheless have a serious blind spot.

And that blind spot comes in the form of constituting another top-down, elite driven initiative.

Yes some enable competition between political units in a league table (see also here; here and here); and yes they offer comparability and consistency across time and geographies. But they are still concerning for several reasons.

Firstly, I can’t help thinking that since it is the elites who have got us into this mess, relying on elites to direct us out of it through their (admittedly well-intentioned) challenges to GDP seems an insufficient rebalancing of power. Most of the emerging initiatives would be considerably better than GDP (experts are experts for a reason and know their trade, so will probably come up with a product that seems sound on paper). But experts and elites on top is missing a huge part of the deeper change we really need to see.

what is wellbeingPoverty is about powerlessness. So a large part of any challenge to the causes of poverty needs to place more power in the hands of those who are excluded.

Secondly, however clever the new indicators, their democratic legitimacy and popular mandate is weak, which undermines their traction. Oxfam Scotland’s advocacy around the Humankind Index suggests that it is the effort to reach out to people – its participatory nature – that has underpinned the Index’s positive reception.

A more participatory approach has high profile backers. Five years ago, when economists Sen, Stiglitz and Fitoussi wrote their Commission on the Measurement of Economic Performance and Social Progress they called for a ‘global debate…[and] discussion of societal values, for what we, as a society, care about, and whether we are really striving for what is important’.  In the same vein, Canadian economist Mark Anielski declares that ‘future wellbeing indicator work should have a firm foundation in quality of life values expressed by citizens in the community’.

Thirdly, consulting people often results in surprises in terms of what they identify as important. However expert the experts, they are unlikely to be entirely or automatically in line with the views of the people.

For example, when the British Office of National Statistics consulted the British people as to what wellbeing meant to them, the ONS admitted they were not expecting issues such as spiritual/ religious belief to emerge as strongly as it did.

In two projects Oxfam has run – one in India (forthcoming) and one in Scotland – it emerged that when asked, people identify issues such as respect, dignity, decent work, and work that feels meaningful, as important. Similar issues also emerged in the World Bank’s Voices of the Poor project.

These are not just nuances.  If we relied only on (even well-intentioned) expert-nominated components for our measures, it is likely we would miss happiness v researcherscrucial meanings, qualifications and prioritisations. For example, most of the well-known measures of progress include a measure of employment. But people tell us it is not necessarily employment per se, but also the quality, suitability and meaningfulness of employment that shapes their ability to live good lives. If policy makers were unaware of this difference, they might (er, hypothetically of course), prioritise a form of economic development that merely created more jobs, without paying heed to their quality (you know, zero hours contracts, that sort of thing).

Finally, there is merit in creating spaces for people to talk about their priorities – in and of itself. Hall and Rickard called this ‘serendipitous benefits’. They conclude that the ‘process [of public discussion] is…important in its own right because it can empower people to undertake action in advancing well-being in society…These benefits can strengthen the machinery of democracy, make the business of government easier, and build our capacity to foster and expand the capabilities needed for meaningful participation in society’.

A forthcoming book (coordinated by the University of Bath) lays out the variety of mechanisms to create spaces for such discussions and distil their content in order to inform new notions of success. One point of unanimity amongst the authors though is that putting people at the heart of such new measures is vital.

It might be messy. It might be imperfect and flawed (I will write in due course about some of the challenges we encountered in a recent project in India, such as adaptive preferences and low expectations potentially acting as a ceiling). It might not offer so much to those who think international comparability is crucial. And it might raise legitimate questions about what is the relevant locality for discussion (ie how do we define ‘people’?)

But none of these concerns are worth sacrificing people’s voice for.


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9 Responses to “Can alternative economic indicators ever be any good if they are devised solely by experts?”
  1. Jim Tanburn

    This is an interesting piece about how to set development priorities in a participatory way. It is not (contrary to the opening sentence) about “measurement initiatives” – a term hyperlinked to initiatives about indicators. Measurement is the action of measuring something, and involves so much more than just agreeing indicators.
    This might sound like a rant from Pedants’ Corner (where should the apostrophe be?) but in practice it is common for discussions about measurement to default to talking about indicators, rather than grappling with the tougher questions that do need resolving, in the measurement arena.

  2. John Magrath

    Great blog Katherine. I’m sure you were being tongue in cheek saying if policy makers were ‘unaware’ then they ‘might’ create precarious, degrading jobs. But being more forceful, of course they are aware; and more measuring and evidence of people’s priorities won’t change their policies, because they just don’t care. Their constituency isn’t workers but ‘business’, the so-called ‘wealth creators’ for whom low-paid, insecure labour is a good thing. So indeed, to reinforce your final point, having people talk to each other about their priorities won’t change anything unless it empowers them into the political arena.

    • Good point about corporate executives of business being the constituency of policy makers. I recall a discussion of the GPI in E Magazine in which a coal country representative in the US blocked discussion of a new indicator because it treated his coal constituency negatively in the early 1990s already. Ultimately, institutions and enterprises based in communities need to be the focus, and indicators need to reflect those organizations. In the US, the Small Business Administration is one, the National Credit Union Association another. It certainly came to my attention that some, many, or almost all credit unions are not particularly oriented towards their democratic business nature. Rural electric co-ops also have become like that, which the Sierra Club was beginning to address in their Beyond Coal campaign. In Denmark, Danish citizens protested nukes in the 1970s, and that created social momentum that ultimately led to the formation of wind co-operatives, which led wind turbine development their for a number of years, after which Germans found a similar momentum that has carried through until now.
      Certainly, Stock Exchange values of companies are based on secondary market trading, and financially driven processes of profit and s/h value maximization that are not good economic indicators, not to mention the GDP externalization farce. I’m just a guy trying to use his masters and get honest work, and I know I’m a source of important thought on this matter, and that it is reference to clear organizational sources of activity that counts. In the UK, that might include the Baywind RE co-op, their off-shoots, and other later social enterprises. This needs to be kept real. As such, I give Cobb et al credit, since their article “If the GDP is Up, Why is America Down?” makes a powerful discussion of the subject. Ethan Miller, also, in his discussions of “Livelihood” and “Solidarity Economics” in articles like “Occupy! Connect! Create!”

  3. Katherine Trebeck

    John, what a depressing, if sadly realistic, conclusion! Activist Cathy McCormick talks of a ‘war not with bullets, but with brief cases’ in her autobiography
    She concludes the economic system we’ve created requires that ‘reserve army’ of unemployed. So while I keep referring to a ‘broken economic model’ maybe it isn’t broken at all, but working quite nicely for the very few…

  4. Chris P

    Drawing a parallel with prior discussion on the need to evaluate the results of the results-based management work, I do wonder if the ‘people’ were asked whether they would rather have funds spent on something tangible in their community or on the execution of a participatory process for alternative indicators, how many would say they latter? To what extent is participation being selectively advocated when elites expect it will align with their own criticisms of current practice (eg wellbeing measurements) and ignored in those where it may not (eg whether such work should be funded at all given resource constraints.)

  5. Katherine Trebeck

    Chris, very fair point about how and when participation is used. But the you almost point to a challenge back in your 1st sentence: how would one know what to spend those funds on without asking people in the community? How would that ‘tangible’ item be selected?
    Participatory processes aren’t just for big global comparisons, they’re also – indeed more important – in determining what sort of development communities want, how, when etc.
    Thanks for engaging – clearly a discussion that needs to keep rumbling along!

  6. Ruchir Shah

    I wonder whether there’s something here about people doing things together or even for each other, collective action, that’s the key. A lot of measurement feels inadequate, probably, because it focuses on people as individuals rather than social actors. Perhaps we derive well-being from self-less acts. In which case we can’t measure it from the point of view of selfish gains.

  7. Mike Riddell (@mikeriddell62)

    katherine – good work. Ruchir – good work!
    It’s about time that we called time on the top down approach to metrics that matter, and it’s about time we began organising ourselves to undertake collective action.
    Because problems such as climate change, poverty, the economy and social injustice are too big for one organisation to solve on their own.
    They require solutions that involve the grass roots, as well as the celebrities and big names that are interested in conservation.
    Some recent work that Stanford have done has inspired our community in Manchester to develop a wider community of like-minded people willing to conserve and protect the common good.
    Our vision is “to show the world what good looks like”. To execute this vision our community of communities is organising itself around five rules:
    At the heart of it is shared measurement – all participating organisations within our community are measuring and reporting success in a standardised and uniform way, and have a list of common performance indicators that they use for learning and improvement
    We also have a common agenda – we share a vision for change that includes a common understanding of the problem, and a joint approach to solving it through agreed upon actions
    We are planning a launch campaign (for January) with mutually reinforcing activities – a coordinated set of differentiated activities through a mutually reinforcing plan of action, which is bringing together a diverse set of stakeholders from different sectors – businesses, communities and academia.
    Key to it all is continuous communication – all members are engaged in frequent and structured open communication, the purpose of which builds trust, assures mutual objectives, and creates a common motivation
    Most importantly of all, we have a systemised backbone of support – an independently funded resource that dedicates itself to the community’s cause by providing ongoing support:
    * That guides the vision and strategy
    * That supports aligned activities
    * That establishes shared measurement practices
    * That builds public will
    * That advances policy
    * That mobilises resources

    You are right that how we measure success needs to change, but that’s only one part of the story. Empowering communities to make the change and rewarding them for doing so is just as important.
    We here in Manchester are grateful to you for putting this matter on the agenda. Katherine, we would love you and your organisation to join our community and help make change real.

  8. Ricardo Rodriguez

    It is becoming clear that indicators such as GDP are not enough to measure well-being of diverse communities in vulnerable environments, undoubtedly asset accumulation is not synonymous of welfare and capacity building to overcome poverty traps. Under this approach, also seem debatable, according to Dani Rodrik, Millennium Development Goals (MDGs), since that would correspond to unified solutions for communities that have particular needs arising from their environment. In my opinion is not a bad starting point working for the MDGs, but we should not ignore beneficiaries’ opinion, I think there is growing number professionals trained to considerer various forms of measurements with enough capacity to collect and interpret accurately real aspirations of those who most need support.

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