Ardern win shows that it pays to track well-being
THERE was a blinkand-you’ll-miss it line in Paschal Donohoe’s Budget speech last week, when he mentioned moves to look at introducing so-called well-being measures that in future could be used to assess the impact of fiscal policies.
The concept of measuring some version of gross national happiness has moved from the fringe towards the mainstream in recent years, but Jacinda Ardern’s dramatic election victory in New Zealand means the idea is set to move front and centre for policy makers who’d like to emulate her ability to reverse the angry factionalism that has exploded in political life across the West since the global financial crisis.
The project outlined in Budget 2021 was a commitment inserted in the Programme for Government by the Green Party in May, well ahead of the New Zealand election but development appears to be slow so far.
Supporting paperwork published by the Department of Finance alongside Budget 2021 includes an overview of what could be involved in developing ‘well-being’ measures and outlines plans to examine how similar efforts have gone elsewhere when attempts have been made to, in essence, measure the public’s satisfaction, or lack of it, with their lot in life.
There have already been moves here to measure quality of life, including by the Central Statistics Office, but the idea of a ‘Well-Being Budget’ goes further – in theory targeting budget resources towards outcomes in areas like environmental protection, poverty and literacy rates and even the amount of free time people need to volunteer with community organisations.
The germ of the approach was developed in the tiny Himalayan kingdom of Bhutan, where its gross happiness index was developed as a critique of standard measures – such as gross national product (GDP) – that focus on wealth and growth to assess a country’s success relative to peers. Bhutan felt such measures failed to reflect the life satisfaction of its people.
Its happiness index looks at areas including psychological well-being, health, education, time use, cultural diversity, good governance, community vitality, ecological diversity and living standards.
As the concept has moved into the West, starting in New Zealand the woolly concept of happiness has been ditched in favour of a more data-driven approach to quality of life including data analysis and surveys.
In New Zealand’s case those initial targets included the transition to a sustainable and low-emissions economy, supporting digital adoption, addressing the relative poverty among Māori and Pacific Islander population versus the population as a whole, reducing child poverty, and supporting mental health.
Rather than reject the idea that wealth equals health, as Bhutan sought to do, the New Zealand approach has been about matching annual spending by the State to a set of long-term policy goals that have been identified as keys to delivering quality of life for the public. Billions have poured into historically overlooked areas, including mental health, as a result.
While all are long-standing areas of policy concern, the explicit language of a budget and the annual assessment of spending commitments and measurement of outcomes is new. The paper published alongside Budget 2021 was prepared by economists in the Department of Finance and is delivered along similar lines. It sets out some of the experience with similar work elsewhere and examines the idea of creating a ‘dashboard’ made up of measurements across a number of areas such as average household disposable income and life expectancy deliberately spanning areas like health and income. Here, it suggests more detailed measurements would target information in relation to vulnerable populations such as Travellers or homeless people.
Dr Kieran Keohane, a sociologist at University College Cork, says the attempt to develop new ways to measure policy success or failure by expanding on purely economic measurements reflects rising anxiety among policy makers across the world – especially on the back of the rise of what he describes as populist authoritarianism, including the rise of Donald Trump in the US and the fracturing of mainstream politics across much of Europe.
“The problem of that approach is that as you have more and more instruments it might look like you are driving a 747 jet instead of a Ford Escort, but still don’t know how to steer it,” he says.
But he says the Covid pandemic has brought interconnected ecological, financial and health crises to a head, with even the OECD now looking with fresh eyes at the exhaustion of policies that have dominated political economy over the past four decades, including the shrinking of states relative to the private sector.
The cascade of revolutions that broke out across Europe in 1848 and the so-called Age of Extremes in the 1930s that saw the rise of Nazism both provoked similar anxiety around governability and were followed by explosions in the use of statistics as governments made dramatic efforts to better understand those they governed, he says. In both cases chaos was ultimately put back in the bottle by the development of state infrastructure capable of delivering large scale social, educational and healthcare provision, he says.
However well-being comes to be assessed here, he already anticipates a similar response to the crisis of the 21st century in Ireland and internationally. There’s already some evidence for that in the massive scaling-up of spending commitments in Budget 2021, the IMF’s supportive stance for government spending and the European Central Bank’s approach in propping up borrowers.
For that response to be sustainable internationally over a longer period, states’ income will also have to be shored up, Dr Keohane says, with implications for who pays tax and how much is paid.
Billions have poured into historically overlooked areas Measuring happiness has moved from the fringe
In both cases, chaos was ultimately put back in the bottle