Two years after the Stiglitz-Sen-Fitoussi report, What Well Being and Sustainability Measures

Ethical Markets Correspondent Lisa Cowan attends the conference “Two years after the Stiglitz-Sen-Fitoussi report, What Well Being and Sustainability Measures,” held at the OECD, Paris on 12th October 2011.

I attended this event with great interest; my hope was to witness the beginnings of a shift towards a new paradigm of the measurement and prioritization of well being versus the old paradigm of viewing a grossly limited picture of the state of a nation through the measurement of GDP. I was not disappointed.

The Stiglitz-Sen-Fitoussi report entitled Mis-Measuring our lives – Why GDP doesn’t add up was presented to Nicolas Sarkozy, the French President on September 14th 2009. In the foreword to the printed edition President Sarkozy states:

“The intellectual, moral and political battle has begun between those who want everything to go back to the way things were before, because they are unable to change the way they think or out of self interest, and those who are convinced that nothing can stay the same as before and that change must be made as quickly as possible.’

I am pleased to report that country representatives were lining up to declare themselves willing and capable of change. The conference was opened by Nathalie Kosciusko-Morizet, Minister for Ecology, Sustainable Development, Transport and Housing, Angel Gurría, OECD Secretary-General and Nobel prize winner in economics, Joseph E. Stiglitz. François Baroin, Minister for the Economy, Finance and Industry, also provided a keynote address at the end of the day.

I was deeply inspired by the level of action and dialogue which the Stiglitz-Sen-Fitoussi report has generated all over the world. We heard reports from a wide range of countries including UK, New Zealand, Columbia, Korea, Japan, Brazil which gave very different perspectives on the value and challenge of data collection.

In his opening speech, Joseph Siglitz commented on the wide range of great examples there are all over the world, but chose to draw on an example of the New Scottish government

They brought out a report reflecting the work Stiglitz-Sen-Fitoussi report.

When the Scottish government chooses what it measures it is by default defining what matters. And what it focuses attention and resources on.”

“Focusing on delivering economic growth as the end rather than the means is inadequate. Our collective purpose should be improving people’s well-being, so the time is right for Scotland to shift its emphasis from measuring economic production to measuring people’s well-being.”

More than GDP: Measuring What Matters, Report of the Round Table on Measuring Economic Performance and Social Progress in Scotland, p.v and vii Link to Report

This conference was a stark and encouraging contrast to statistics based events I have attended in the past, something I mentioned to Martine Durand, Director of Statistics and Chief Statistician of the OECD who replied;

“If you wait until everything is perfect you will never do anything. There are national offices of statistics that are quite conservative but we can take a bit of risk.”

In his keynote address The French Finance Minister – Francois Baroin gave a simple but powerful example of one way that measuring well being on a local and national level can affect policy which has a direct effect on the quality of people’s lives;

“Most doctors tend to work in big cities. It’s easier to find work and they earn more money. There are too many doctors in urban centres and too few in rural areas. We’ve worked local to national and we will have differential in remuneration for doctors in urban areas to ensure their services are available all over the country.”

 And at the end of the day Enrico Giovanni, Chief Statistician at the OECD at 2007, took us back to 2007 when the OECD countries first signed the declaration about measuring progress. At the time 3 ingredients were identified as being keys to success:

1.       “Leadership (The OECD took on this role)

2.       Scientific basis/foundations

3.       To be open to people (Engage NGO’s and others in this effort to avoid the mistake that the social indicators movement in the 70’s was something just discussed by experts”)

This year he said a fourth ingredient was now required; “Engagement not only of people through NGOs but also enterprises and governments.” Which poses the question – how to create this engagement? What’s in it for the business that have shareholders interested in increasing share prices? With ethical business practices and CSR commanding a high level of expectation from civil society and the media, business has made some progress in the past decades towards telling a story beyond share prices. For as Joe Stiglitz pointed out at the end of the conference and in the 2009 report:

“When driving a car, a meter that weighed up in one single value the current speed of the vehicle and the remaining level of gasoline would not be of any help to the driver. Both pieces of information are critical and need to be displayed in distinct, clearly visible areas of the dashboard.”

 With such a political and human momentum behind this paradigm shift I am hopeful that progress will continue to be made on defining and measuring what really matters. So that each of us can make informed choices about the way we live and interact with this precious planet we inhabit.