Make use of Gross National Happiness Index for development

For all its popularity, economists have lamented the weaknesses of the Gross Domestic Product (GDP) as a measure of economic development.

GDP is a Keynesian tool that was popularised in the 1950s after World War II as countries sought conventional tools of economic measurement. However, over time it has depicted some weaknesses. It excludes the underground economy, damage to the environment, good governance and national values. Economists have proposed other measures of economic progress.

In 1972, King Jigme Singye Wangchuck of Bhutan coined the phrase Gross National Happiness. He said: “Gross National Happiness is more important than Gross National Product”. While the idea informed policy and became the lifeline of Bhutan’s society, there was no way of measuring national happiness. In 2010, the Centre for Bhutan Studies developed a Gross National Happiness Index, to measure people’s happiness.

The index has nine components, called domains, namely psychological wellbeing, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience and living standards. A survey is done every five years that generates data for the GNH calculation.

Following the Bhutan experience, other countries began pursuing broader measures of development. French president Nicholas Sarkozy commissioned a study on alternative gauges of economic welfare and the impact of happiness in an economy. At the same time, Britain commenced a “Measuring National Well-Being” program in 2010. The European Union is pursuing a programme dubbed "Beyond GDP" while the World Bank suggests the use of the Human Development Index and Adjusted Net Savings as alternatives to GDP.

TOO SUBJECTIVE

Many critics have voiced their dissatisfaction with the concept of gross national happiness. It has been criticised for being too subjective and susceptible to tampering by the government so suit its interests. Additionally, since nations define their happiness as they deem fit, comparison between nations is difficult.

Perhaps the loudest critic is University of Illinois economics professor Deirdre McCloskey, who says such measurements are unscientific. “Recording the percentage of people who say they are happy will tell you just how people use words,” making the analogy that society could not “base physics on asking people whether today was hot, nice, or cold.”

Yet for all its criticism, in 2011 the UN unanimously adopted a General Assembly resolution, introduced by Bhutan with support from 68 member states, calling for a “holistic approach to development” aimed at promoting sustainable happiness and wellbeing. Following the resolution, in 2012, the UN released the first World Happiness Report.

According to the report, the Danes are the happiest people on earth followed by the Swiss. The least happy are the Burundians, Syrians and Togolese. Kenya ranks 122 out of 157, just below Egypt and South Africa.

PSYCHOLOGICAL WELLBEING

So, what makes Kenyans happy?

Of the nine domains proposed in index, I would say Kenyan happiness can be measured by psychological wellbeing, health, community vitality and resilience, education, good governance, ecological diversity and living standards. We are indeed strong on cultural diversity and community. However, we are not strong on time use.

Sadly, capitalism has resulted in gross inequalities across the globe and many fear this will create instability and unsustainable economic growth. Many solutions were sought at the recent World Economic Forum as leaders toyed with the idea of an inclusive capitalistic system. Perhaps, the ultimate solution would be adopting the GNH index as a measure of economic performance across the globe, especially in the developing world.

Kenya should thus adopt the GNH. Apart from making economic measurement wholesome, it will help the national and county governments to put more emphasis on areas that matter to most people as opposed to the brick and mortar development approach seen in the past few years.

So, in the face of a growing GDP, are we happy as a nation? The world happiness index says no.

Odhiambo Ramogi is chief executive officer, Elim Capital.