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  • Writer's pictureEsteban Tinoco
    • Apr 29, 2016

A rationalized tale of the pursuit of happiness


“…When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They told me I didn’t understand the assignment, and I told them they didn’t understand life.” Unknown


In early 2015, with an army of 66 university graduates, the Centre for Bhutan Studies travelled to the 20 districts of Bhutan and interviewed 8,871 Bhutanese people, asking them, in 10 different dialects, 148 questions in order to complete the Gross National Happiness (GNH) index survey.


With the results obtained from the survey, the Centre was able to establish that 43.4% of Bhutanese people were deeply “happy”, 2.5% points higher than in 2010. Furthermore, the Centre was able to identify that, in general, men were happier than women, people living in cities happier than those living in rural areas, more educated people happier than less educated ones, and farmers the least happy of all the groups.


The concept of Gross National Happiness was first introduced by the 4th King of Bhutan in the 1970’s. At the beginning, this idea was based on four pillars: 1) Equitable Economic Development, 2) Environmental Preservation, 3) Cultural Resilience, and 4) Good Governance. Bhutan’s monarchy used these four pillars as a guiding philosophy to implement government policies.


The concept was formally institutionalized and incorporated into Bhutan’s development policies in the early 2000’s, when the country started to implement a nationwide standardized survey to calculate the GNH index.


“GNH is more important than GDP”


The motivation to develop the Gross National Happiness index came from the idea that Bhutan needed a more holistic methodology to measure the well-being of its society and a better indicator than Gross Domestic Product (GDP) on which to base its public policy. Bhutan was not alone in its skepticism of GDP, since for years scholars have recognized its limitations and claimed that it has been misused by most countries and institutions around the world to assess societal progress.


Simon Kuznets, chief architect of the US National Accounting System, first developed the modern notion of Gross Domestic Product in 1934. This monetary measure calculates the amount of output a country produces in a given year; in other words, economic activity and growth.

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However, as Kuznets himself warned, the economic variables used to calculate GDP only measure a narrow segment of society’s activities. Therefore, when used as an indicator of progress of a society, it poses several limitations: (1) GDP is an average and, as such, it fails to capture the distribution of wealth and income in society; (2) GDP is derived from prices, meaning when prices become distorted from reality, the GDP does as well; (3) GDP does not account for the social and environmental externalities caused by economic growth. To be fair, GDP is an accurate measure of economic activity, as intended. The problem is that it has been misused as an indicator of something it was never made to measure.


Despite its limitations, and owing to the straightforwardness of its methodology and the availability of data, by the late 1940’s the index was widely used by countries, and international institutions, to measure economic growth and estimate a society’s well-being.


How does the GNH index work anyways?


In order to obtain a holistic overview of society’s well-being and overall happiness, the GNH index includes 9 domains. Within each of the domains there are several weighted indicators. The Good Governance domain, for example, has 4 indicators: Political Participation (weight 2/5), Services (weight 2/5), Governance Performance (weight 1/10), and Fundamental Rights (weight 1/10). The Living Standard domain, in contrast, has 3 indicators: Income (weight 1/3), Assets (weight 1/3), and Housing (weight 1/3).


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The Centre for Bhutan Studies established a sufficiency cutoff point for each of the 9 domains, representing a set value above which people are considered to be “happy” (for example the poverty line, above which people are considered not to be poor). In order to calculate the GNH index, the Centre considers only the indicators in which people achieved sufficiency. Then, calculating the assigned weight of each indicator, the Centre aggregates the data from the 9 domains using a statistical method. The values obtained range between 0 and 1, 1 being the highest possible value of the index. At an individual level, based on the percentage rank created, if a person obtains sufficiency in at least two thirds of the indicators, that person is determined to be “happy” under the GNH index.


In addition to the Centre for Bhutan Studies, which constructs the GNH index, the government has a Gross National Happiness Commission (GNHC). This Commission uses the results from the GNH index to plan and construct policies that promote GNH. To secure this, the GNHC created the GNH Policy Lens, which is a screening tool to ensure that policies promote the expansion of GNH before they are implemented.


Similar indexes around the world


Expanding on the belief that better measures of societies are necessary, many institutions and governments are seeking to understand people’s perceptions of well-being, to develop simplified methodologies to measure happiness, and to establish reliable data that will provide a more holistic approach to society’s progress.


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Some of these efforts include:


Limitations and criticism of these measures


The main difficulty in developing a reliable methodology is creating accurate indexes that truly reflect society’s well-being, and determining which variables to include.


The main concern with the GNH index is its capacity to accurately account for people’s happiness in a single number. In particular, considering the subjective nature of happiness, the index needs to rationalize philosophical and ethical perspectives, religious beliefs, love and family values.


Furthermore, the values included, and excluded for that matter, to calculate the index were based on the Bhutanese government’s understanding of what is important for and valued by its society, and thus it was constructed by officials’ understanding of a particular society. This means that using this index in a different country may provide misleading results, as values, beliefs and how much they matter for people’s happiness change across countries. In the end, happiness is always relative.


This rationalization of happiness, however inaccurate, was a deliberate measure taken by the Bhutanese government in an attempt to obtain international recognition as a reliable measure by using a quantitative and rational method to create the index. Also, the development of the index was intended to generate measurable information on which to base practical public policy to tackle low-scoring domains.


Despite the skepticism around these measures, the GNH and other similar indexes and reports are a step in the right direction. Once countries accept that GDP does not give them the big picture of how society is doing, but only how much the economy is growing, then they will understand the importance of creating and implementing an index that better captures its population’s needs. The more comprehensive the measurement, the greater the information the government will have about its society, and the greater the possibility to implement particular public policies to address precise needs.


This is not to suggest that governments stop measuring GDP, as it is useful for various economic policies. But rather, it is important for countries to implement, in addition to GDP, complementary measurements that can accurately perceive people’s fulfillment, achievements, necessities, and happiness. The same way that we have indexes for inflation, economic growth and unemployment, having an index on happiness and well-being is of great importance as it can provide vital additional information. After all, economic indicators only represent one piece of the puzzle, but, with measurements like the GNH, we get a little closer to figuring out crucial aspects of personal fulfillment.

Bibliography

1. Adler Braun, Alejandro. Gross National Happiness in Bhutan: A Living Example of an Alternative Approach to Progress. Social Impact Research Experience Journal, 2009.

2. Bhutan’s 2015 Gross National Happiness Index Centre for Bhutan Studies and GNH Index. Thimphu, Bhutan, 2015.

3. Costanza, R. et al. Beyond GDP: The Need for New Measures of Progress. The Pardee Papers, No. 4, 2009.

4. Defining a New Economic Paradigm. The Report of the High Level Meeting on Wellbeing and Happiness, 2012. New York.

5. Government of Dubai, Dubai Plan 2021. http://www.dubaiplan2021.ae/dubai-plan-2021/

6. Government of UK, National Wellbeing Programme. 2013. https://www.gov.uk/government/collections/national-wellbeing

7. Helliwell, John, Richard Layard, Jeffrey Sachs, eds. 2015. World Happiness Report 2015. New York: Sustainable Development Solutions Network.

8. OECD. (2013), OECD Guidelines on Measuring Subjective Well-being, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/9789264191655-en

9. Royal Government of Bhutan. The Report of the High-Level Meeting on Wellbeing and Happiness: Defining a New Economic Paradigm. New York: The Permanent Mission of the Kingdom of Bhutan to the United Nations. Thimphu, 2012

10. Singer, Alison. Bhutan’s Happiness Paradigm. Is sustainability still Possible? Worldwatch Institute, 2013. http://blogs.worldwatch.org/sustainabilitypossible/bhutan/

11. The Happy Planet Index: 2012 Report. A Global Index of Sustainable Well-Being. New Economics Foundation, London, UK, 2012

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