OECD Work on Measuring
Well-Being and Progress
ABS
Canberra 14 September 2010
Martine Durand
OECD Chief Statistician
Director of Statistics
1
Outline of presentation
1. The “measuring progress” agenda and the
OECD-hosted Global Project
2. New direction for OECD work on measuring
progress
3. Implementation issues
2
1. The Measuring Progress Agenda and
the Global Project
3
Context

Growing gap between the image provided by official
statistics and people’s perceptions of their own
conditions

Damaging for the credibility of official statistics, and
ultimately public policies and the functioning of
democratic processes
4
Higher tides did not lift all boats:
income inequality widened in ¾ of OECD countries
between 1985 and 2005
Source: Growing Unequal?, OECD 2008
5
People in richer countries are not
necessarily more satisfied with their life
NNI per capita (left-axis)
Subjective well-being (right-axis)
60 000
100
90
50 000
80
70
40 000
60
30 000
50
40
20 000
30
20
10 000
10
0
0
6
Beyond GDP :
Focus on households’ and individuals’ well-being
GDP is not a good measure of well-being because:

It includes economic activities that either reduce well-being or that
remedy the costs of economic growth

It does not include all economic resources (own-use household
services)

It excludes many of the dimensions that matter for well-being (health,
inequalities, education, quality of work, leisure, social ties, good
institutions, etc.)

It does not inform on whether well-being can last over time (stocks of
natural, human and social capital)
7
The OECD-hosted Global Project

OECD started to address these concerns about 7 years ago
and launched in 2007 the Global Project in partnership with
other organisations

Main objective:
– To stimulate national and international debates on societal
progress and its measurement; 3 World Forums: Palermo
(2004), Istanbul (2007), Busan (2009)
– To create a network of networks for advocacy and for sharing of
information on progress
8
This agenda has received strong political
support





President Sarkozy set up the Stiglitz-Sen-Fitoussi Commission
(September 2009)
EU Communication on “GDP and beyond” (September 2009)
G20 Leaders statement in Pittsburgh and Toronto to “encourage
work on measurement methods so as to better take into account the
social and environmental dimensions of economic development”
(November 2009, June 2010)
EU 2020 Agenda (from creating “the most competitive and dynamic
knowledge-based economy in the world” to “turn(ing) the EU into a
smart, sustainable and inclusive economy” with emphasis on “jobs
and better lives”)
Conclusions of OECD Ministerial Council (May 2010)
9
… and a strong academic foundation
OECD WORK ON
MEASURING PROGRESS
10
2. New Direction for OECD Work on
Measuring Progress
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From advocacy and networking to development
of indicators

Streamlining OECD activities contributing to the Global Project

Focusing work on the development of indicators
– Involving and working more closely with NSOs through CSTAT
– Collaborating with European initiatives, e.g. Eurostat/INSEE
Sponsorship; French G20 Presidency
12
Streamlining OECD activities contributing to the
Global Project on Measuring Progress of Societies
– Organisation of 4th OECD World Forum in India in 2012
with a strong focus on measurement
– Other regional events (Latin-America, Asia, Africa, MENA),
leading to India
– Development of Wikiprogress: a platform for the sharing of
information and statistics
13
Focusing OECD work on the development of
indicators under the auspices of CSTAT
A.
Disseminating existing relevant OECD
measures
B.
Defining, and contributing to, the research
agenda
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A. Disseminating existing measures

National Accounts measures other than GDP, focusing on
households (e.g. household income and consumption, assets and
liabilities )

Beyond economic statistics, OECD data already cover many
dimensions of quality of life (environmental, health, social,
education, governance)


Other possible “low-hanging fruits” (e.g. from time-use surveys)
All available information will be brought together in a specific OECD
publication (“How’s Life”), to be released for the OECD 50th
Anniversary next year.
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B. Contributing to the research agenda

Economic resources:
– Integrating within the National Accounts information on the
distribution of household income and wealth from survey and
administrative sources
– Analysing at the micro level the joint distribution of household
income, consumption and wealth
– Developing measures of household production of non-market
services.
– Decomposition analysis of the differences between growth in
GDP and in household disposable income.
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B. Contributing to the research agenda

Quality of life:
– Developing guidelines for NSOs on how to measure different aspects of
subjective well-being (evaluations and feelings).
– Measuring vulnerability and insecurity: going beyond income-poverty,
to look at risks facing people with few assets (financial, human capital,
social connections)
– Indicators of environmental quality of life: how environmental
conditions affect subjective well-being; people’s appreciation of the
quality of their local environment – air, water, green space.
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B. Contributing to the research agenda

Sustainability:
– measures of human capital based on discounted income
– physical measures of stocks and flows of natural resources
and resource productivity
– measures of intangible assets
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3. Implementation Issues
19
OECD institutional process

Research agenda approved by CSTAT at its June 2010
meeting

Strongly supported by OECD Secretary-General
–
–

One of his six priorities for 2011-12
Strong financial support
Work programme involving several Directorates and Policy
Committees:
–
–
To develop new indicators in their areas
To link these indicators with policies
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Planned contributions from other OECD
Directorates and Policy Committees
– DELSA: better measures of people’s morbidity, vulnerability to extreme
poverty
– ENV: measures of impact of environmental conditions on people’s quality
of life
– ECO: measures of non-market production into Going for Growth; work on
inequalities and trade-offs
– EDU: measures on economic and social outcomes of learning
– GOV: indicators on quality of democratic institutions; inequalities across
regions
– DEV: indicators of social cohesion and exclusion in emerging and
developing countries
(Preliminary and non-exhaustive list)
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Work on progress measurement expected
to contribute to other OECD “Horizontal
Projects”

Green Growth Strategy to be delivered in May 2011
– Environmental Accounts
– Extended Growth Accounting approach
– Environmental Quality of Life

News Sources of Growth (Innovation)
– Human Capital
– Stocks of Intangible Assets

Gender
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Linking indicators to policies
The virtuous policy cycle
Improved
Measures
Improved
Outcomes
Indicators
Detailed
Policy
Measures
Comparative
assessment
Policy
Awareness
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Key implementation challenges

Choice of indicators
– Dimensions of progress and number of indicators to follow over time
– Operationnable for policy?

Involvement of NSOs is key to ensure feasibility, quality
and trust
– Use of non-official data
– Modification of existing surveys (e.g. timeliness of TUS; new
questions in households surveys, etc..)

How to involve non-OECD G20 and developing
countries?
– Partnership with World Bank, Paris 21

OECD to make the bridge between various initiatives,
notably at European and G20 level
– Eurostat
– G20 Framework for Strong, Balanced and Sustainable Growth24
Conclusions


The “progress agenda” is set to remain a very prominent
OECD activity in the future : one of the OECD SecretaryGeneral’s six priorities for 2011-12
OECD work will focus on this issue through:
i.
ii.
iii.
iv.

dissemination of existing indicators
research on new measures of well-being and sustainability
Limited number of regional events and 4th World Forum in India
Development of wikiprogress
Success ultimately hinges on member countries willingness to
support this work and invest in its development, both
domestically and internationally: at OECD key role for CSTAT
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Thank you for your
attention!
Martine Durand
(martine.durand@oecd.org)
26