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Saturday September 20th 2014

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Moving beyond GDP a European and national policy issue

A subject once discussed mainly by researchers and university scholars, the need to develop new indicators to better measure a nation’s prosperity and quality of life is now high on the agenda of European policy makers and national governments. This newsletter highlights recent developments in efforts to find measures that complement the current and best known measure of economic activity Gross Domestic Product (GDP).

The EU’s Beyond GDP initiative
European Parliament committees were busy this winter discussing the Commission’s Communication “GDP and beyond ? Measuring progress in a changing world” which proposes five actions for developing proper measurement of progress on social, economic and environmental goals. The February 2011 draft report of the leading Parliamentary committee, the Committee on Environment, Public Health and Food Safety (ENVI), called on the Commission to submit a strategy showing how the new approach can be applied in day-to-day policy making. In her closing remarks, the rapporteur Ms Anna Rosbach encouraged close cooperation and the exchange of ideas between the Parliament and Commission which she believes can result in benefits for the whole of Europe. The committee vote will take place in April 2011, while the final vote in the European Parliament is expected in June 2011.

One of the five key actions is to extend National Accounts which present production, income and expenditure in the economy to include environmental and social accounts. The Commission has put forward a proposal for a Regulation on European environmental economic accounts, an accounting framework that establishes the links between economic activities and environmental pressures in the EU. This legislative proposal has been discussed between the Commission, the European Parliament and the Council with a view to reaching a first-reading agreement, and is currently in its final stages of adoption. For more details and videos, see www.beyond-gdp.eu/news.html

President Barroso backs Beyond GDP initiatives
The importance of moving beyond GDP to measure progress was also underlined by several high-level speakers at last month’s Eurostat conference: “Statistics for policy making: Europe 2020″.

In his opening speech, President Barroso said: “The appropriate choice of indicators is key to boosting our understanding of the complexity of our diverse societies within the European Union, to better communicate on it, and to better respond to new policy needs, as for example with the ‘GDP and beyond’ initiative to include measurement of wellbeing.” He noted that the Commission’s initiative had been followed by several others, including in some European countries, attracting greater attention to these more qualitative elements of statistical analysis. Ministers, Commissioners and experts participated in the two day conference. In his conclusion, European Commissioner for Economic and Financial Affairs, Olli Rehn, complimented the discussions on GDP and beyond for challenging official statisticians to develop new indicators that better describe our environmental challenges, the quality of life of households and the distributional aspects of income. For more details, see: Abstracts, presentations and videos online.

Beyond GDP at national level
The topic is being discussed not only by European policy makers, but also at national level throughout Europe. This newsletter highlights a few examples, but more information can be found at: www.beyond-gdp.eu/news.html

Germany: Parliamentary Committee set up to develop new indicator
The Bundestag has established a Committee on Growth, Prosperity and Quality of Life which met for the first time in January. The Committee of 17 MPs and 17 experts will examine factors influencing quality of life and social progress prosperity over the next two and a half years, with a view to developing a new indicator for prosperity.

France and Germany: Joint report on new indicators
In December 2010, the joint report, entitled “Monitoring economic performance, quality of life and sustainability” was presented to Chancellor Merkel and President Sarkozy. The report is the result of a commitment made at the Franco-German Ministerial Council to ask the French Conseil d?Analyse Économique and the German Council of Economic Experts to follow up on the outcome of the Commission on the Measurement of Economic Performance and Social Progress (Stiglitz-Sen-Fitoussi Commission). It emphasises both the need for a clear distinction between economic performance and current material well-being (concerned with the level, development and distribution of income, wealth, and consumption among households) and the need to include non-material aspects of well-being (such as health, educational achievements, activities within the labour market, environmental aspects, social connections, political voice and security).

UK: New public attitude survey and national debate on measuring well-being
The Department for Environment, Food and Rural Affairs (Defra) published on 13 April 2011 a Public attitude survey presenting updated statistics on life satisfaction in a time series from 2007 to 2011.

The UK’s National Statistician, Jil Matheson, is heading a national debate on measuring the nation’s well-being. This follows the November 2010 pledge by David Cameron to find out what makes the nation content. The debate is the first phase of the Measuring National Well-being Programme which aims to provide a fuller picture of how society is doing’ than is given by economic indicators such as GDP. The debate, which closes on 15 April 2011, has gathered over 7,000 responses to the question ‘what matters to you?’. For more information, check the programme’s webpage: National well-being.

See also the Beyond GDP website at www.beyond-gdp.eu.

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