Better Life Index

Written by Marcin Grajewski

There’s more to life than GDP – debate on OECD’s Better Life Index

Is life really getting better? How can we tell? What are the key ingredients to improving our lives – is it better education, environment, healthcare, housing or working hours? Does progress mean the same thing to all people, or in all countries and societies? Can all this be measured at all and, if so, what are the lessons to be drawn by our politicians?

A conference organised by the European Parliamentary Research Service (EPRS) and the Organisation of Economic Co-operation and Development on 23 September, entitled ‘Better than GDP – The OECD’s Better Life Index’ attempted to answer all these questions, coming to the conclusion that the indicator is a good attempt at capturing the well-being priorities of people and that the index should be further developed. This was the second joint event organised by EPRS and OECD. Some 80 people, including MEPs, EP and European Commission policy analysts, as well as think tank experts attended the event in the European Parliament’s Library Reading Room.

‘There is more to life than cold GDP numbers’ noted Etienne Bassot, Director of the Member’s Research Service at EPRS during his introduction. He stressed that ‘we have to admit that focusing too narrowly on GDP developments, even if measured per capita, and even if adjusted to real terms, does not adequately illustrate important aspects of European citizens’ well-being’.

The keynote speech was delivered by Anthony Gooch, the OECD’s Director of Public Affairs and Communications, who presented the Better Life index (BLI). Whereas GDP, or gross domestic product, is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, the BLI focuses on developing statistics to capture aspects of life that matter to people and that shape the quality of their lives.

The OECD, a pioneer in this field of research, has been working for more than a decade to identify the best way to measure how societies progress – moving beyond GDP and examining the areas that impact people’s lives. In 2011, the culmination of this work was presented in the OECD Better Life Initiative.

The BLI is an interactive web-based tool created to engage people in the debate on well-being and, through this process, learn what most matters to them. The tool invites users to compare well-being across countries according to the importance respondents assign to 11 topics: community, education, environment, civic engagement, health, housing, income, jobs, life satisfaction, safety and work-life balance.

It turns out that, across all OECD Member States, people using the BLI value life satisfaction most, followed by health; and attach least importance to civic engagement. Among European users, however, health tops the list. Additionally, the older the respondent, the higher they value health. Details on the BLI can be found on the OECD’s website or in Anthony Gooch’s presentation.

During the discussion moderated by EPRS policy analyst Dr Andrej Stuchlik, speakers endorsed the OECD’s approach in general, but also posed some tough questions and challenged some of its aspects.

‘This is not mainstream thinking, definitely not that of DG ECOFIN,’ Philippe Lamberts, Green MEP and a member of the OECD’s parliamentary network, said of the index, referring to the European Commission’s Economic and Monetary Affairs Directorate. His doubts concerned the terminology and prioritization. In particular, referring to one BLI component, he argued ‘What does “job” mean? Is it having or not having a job, or does it mean having a poor quality or good quality job?’. The MEP also questioned the validity of choosing between ‘health’ and ‘life satisfaction’, asking ‘Can you have life satisfaction if you have cancer?’

Dr Miroslav Beblavý, a member of the Slovak Parliament and a Senior Research Fellow at the Centre for European Policy Studies, played devil’s advocate, arguing that politicians and economists stick to GDP as the main economic indicator for a reason – as GDP measures economic performance, fast, short-term decisions are favoured. He noted that American politician Robert F. Kennedy talked of the ‘evils of GDP’ 50 years ago, yet the BLI and other initiatives, such as the United Nations Human Development Index have failed to displace GDP as the main economic indicator. Still, this ‘initiative of unparalleled complexity’ needs further development.

The speakers agreed that the BLI and similar indices, such as the Human Development Index, are unlikely to replace GDP any time soon, but may rather complement it.

Discussion will continue on how to best measure societal progress. Nevertheless, in contrast to other initiatives, the BLI has the advantage of being interactive and directly targeted at citizens.

You can watch the whole conference here; with access to individual presentations by Anthony Gooch, Miroslav Beblavy and Philippe Lamberts.