intensive interview programme for ukpcs 2012 interview by samveg ias

Happiness, beyond measure

People are jumping on to the Gross National Happiness bandwagon, in an attempt to capture something that remains elusive 

What is common to Bhutan, Venezuela, the United Arab Emirates (UAE) and Madhya Pradesh? All of them have a ministry/department for happiness. Bhutan is talked about the most, with the idea of GNH (Gross National Happiness) presented as some kind of alternative to GDP (gross domestic product). GNH is built into Bhutan’s constitution, in Article 9, on Principles of State Policy. What is invariably quoted is Article 9.2: “The State shall strive to promote those conditions that will enable the pursuit of Gross National Happiness.” However, this follows Article 9.1: “The State shall endeavour to apply the Principles of State Policy set out in this Article to ensure a good quality of life for the people of Bhutan in a progressive and prosperous country that is committed to peace and amity in the world.”
Operationally, what does this mean? Those who mention Bhutan talk about GNHI (Gross National Happiness Index), administered by the Centre for Bhutan Studies and GNH Research. GNHI is based on four pillars (political, economic, cultural and environmental) and nine domains (which can be skipped for present purposes). There were surveys in 2010 and 2015 to determine how Bhutan performed on GNHI. Hence, along a happiness/unhappiness continuum, progress could be measured and one had an aggregate measure that was an alternative or supplement to GDP, based on subjective responses to questionnaires that were then aggregated. To state the obvious, Bhutan has a population of around 7,50,000.
But I don’t think the alternative or supplementary summary measure is the point. The point is the Planning Commission and Committee of Secretaries being subsumed in the Gross National Happiness Commission (GNHC). In other words, feedback received from GNHI surveys is factored into government policies and public expenditure priorities, reflected in central and local body plans. More than the aggregate measure, if I have understood the idea right, this suggests decentralised planning to me. Ascertain the needs of gram panchayats/urban local bodies. Use those local plans to aggregate and move up to a block level, district level and national plan. If we get too fixated on the alternative to the GDP idea, we lost sight of this process, the operational and much more important part.
After a lot of sarcastic comments and dark humour in 2013, I haven’t heard much about Venezuela’s vice ministry of supreme social happiness. Perhaps it just vanished, because of chaos and general uncertainty. The initial idea seems to have been to converge anti-poverty programmes directed at disabled, homeless, poor and old-age pensioners. Unlike Bhutan, you don’t ask people what their priorities are. Given the ideology of the government, you know what people want, or should want. At best, you synergise across schemes. This also illustrates why discussions on happiness that mention both Bhutan and Venezuela in the same breath are misleading.
I don’t think it is fair to place UAE in the same bracket either. In 2016, UAE announced a new ministry (and minister of state) for happiness. It may be early days, but so far, all this ministry seems to have done is to train officers from federal and local government to become “chief happiness and positivity officers”. I am not sure the UN General Assembly Resolution of July 19, 2011 was a very good idea: “(1) Invites Member States to pursue the elaboration of additional measures that better capture the importance of the pursuit of happiness and well-being in development with a view to guiding their public policies; (2) Invites those Member States that have taken initiatives to develop new indicators, and other initiatives, to share information thereon with the Secretary-General as a contribution to the United Nations development agenda, including the Millennium Development Goals”.
Irrespective of what is done to public policy formulation, people are jumping on to the bandwagon of measuring and pushing something that is, at best, elusive. The UN’s World Happiness Report, an annual feature since 2012, is based on diverse indicators across GDP per capita, social support, healthy life expectancy, freedom to make choices, generosity and perceptions of corruption (trust). Measure a country’s distance from the perfect dystopia and you have a rank and a score. In 2016, India had a rank of 118 out of 150 countries.
If citizens are happier in a certain country, presumably people would want to migrate there, given a choice. In 2016, the top three countries were Denmark, Switzerland and Iceland and both Nepal and Bangladesh have higher ranks than India. It is worth checking out the number of Indian immigrants to these five countries. Among India’s states, Madhya Pradesh was the first one to start a happiness department in 2016. It is early days there too. At the moment, the focus is on volunteers training people to positively impact the lives of others. This is thus an attempt to bring about behavioural changes in people, not behavioural changes within government.
Such disparity across three countries and a state should remind you of the clichéd blind men and the elephant and perhaps of John Godfrey Saxe’s poem too. Most people will remember how the poem starts. “It was six men of Indostan..” And this is how it ends: “So, oft in theologic wars/ The disputants, I ween/ Rail on in utter ignorance/ Of what each other mean/ And prate about an Elephant/ Not one of them has seen!” For happiness too, theology is a good expression, because that’s what the fetish about measurement has reduced it too. The means of measurement have become more important than the end.

 

GDP has shortcomings but finding an alternative indicator is a challenge

Taking the measure

GDP has shortcomings but finding an alternative indicator is a challenge.

The word “gross” has more than one meaning and every possible meaning isn’t palatable. There are people who are engrossed in GDP, and its growth, on a daily basis. But just after the Union budget, many more people are interested in GDP which is the annual value of goods and services produced, as opposed to gross national income, which adds net factor income from abroad. GDP is a term widely used and also abused. I mean the concept, not quality of data. How can GDP measure welfare?
It doesn’t take into account distribution. Income, the foundation of GDP, is at best a means to an end. We should measure indicators that are ends — health, education, quality of environment. In a county like India, where there is “black” income, what sanctity does the official GDP have?
The father of national income measurement is Simon Kuznets, awarded the Nobel Memorial Prize in Economic Sciences in 1971. He worked with the National Bureau of Economic Research and was responsible for the first measurement of US national income. This was for 1929-32 and there was a 273-page report (1934) to Congress. It had a section titled “Uses and Abuses of National Income Measurements”. If one reads the report, one realises every criticism “discovered” afresh today was anticipated by Kuznets in 1934.
Here are quotes from the report: “The estimates submitted in the present study define income in such a way as to cover primarily only efforts whose results appear on the market place of our economy. A student of social affairs who is interested in the total productivity of the nation, including those efforts which, like housewives’ services, do not appear on the market, can therefore use our measures only with some qualifications. Secondly, the present study’s measures of national income, like all such studies, estimate the value of commodities and direct services at their market price. But market valuation of commodities and especially of direct services depends upon the personal distribution of income within the nation… The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”
Or, “In determining which efforts of individuals may or may not be classified as services for the purpose of including their value in the national income total, the estimator must perforce follow the overt expression of social opinion as embodied in the nation’s legal code. That many illegal acts are of some benefit to one group or another and are being paid for, is no proof that these acts constitute a service from the social point of view… The investigator, unless he wishes to impose his own scale of values, cannot, therefore, treat earnings from such illegal pursuits as burglary, illicit drug traffic, bootlegging, etc., as bona fide parts of the national income.”

What does one make of the GDP critique? Given that there has to be a market (and resultant price) where goods and services are valued, one can improve the quality of data, but not GDP as a concept. Alternatively, one can think of indicators that supplement whatever GDP tells us.
There can be indicators like those in Millennium Development Goals or Sustainable Development Goals. Indicators aren’t the same as a summary or aggregate measure. Indicators can’t be reduced to a summary measure unless there are weights and an aggregation formula.
UNDP’s HDI (based on three heads of health, education, GDP) may be widely useful. However, equal weights attached to the three heads of HDI are subjective and arbitrary and have no rationale other than simplicity. (In traditional GDP measurement, prices are weights and therefore, there is no subjectivity.) It becomes messier when one has something like the Commission on the Measurement of Economic Performance and Social Progress, resulting in what is known as the Stiglitz-Sen-Fitoussi Report (2009). “The Commission’s aim has been to identify the limits of GDP as an indicator of economic performance and social progress, including the problems with its measurement; to consider what additional information might be required for the production of more relevant indicators of social progress; to assess the feasibility of alternative measurement tools, and to discuss how to present the statistical information in an appropriate way.”
The GDP critique was the easy part. Other than the aggregation problem, this report brought in subjective indicators on well-being. “Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey. While assessing quality of life requires a plurality of indicators, there are strong demands to develop a single summary measure. Some of these measures are already being used, such as average levels of life-satisfaction for a country, or composite indices that aggregate averages across objective domains, such as the HDI. Others could be implemented if national statistical systems made the necessary investment to provide the data required for their computation.” Paraphrased, we don’t quite know what an alternative summary measure (for GDP) might be. Let CSO figure it out