Preoccupations about wellbeing matter little in Africa

Development Policy21 Sep 2011Dirk Bol

In Africa, economic growth and GDP are still of the utmost importance and are a necessary condition for real wellbeing, argues Dirk Bol.

Those who time and again want to play with subtle nuances about wellbeing in contrast to income have to ask themselves if they help the process of poverty reduction in Africa or only contribute to its confusion. Let’s keep it as simple as possible is my advice: that’s complicated enough. Moreover, existing surveys like those related to demographic and health questions in many African countries provide plenty of additional information on standards of living. They nicely complement the data on economic (income) growth and confirm their relevance. They show that people matter in economics and that there is nothing exclusive about it.

Opening statements like this one for The Broker’s Bellagio Initiative have been heard many times for the last 40 years with very little result. Everybody knows the limitations of economic growth and GDP, but nothing better has yet come up in an operational way. Recently, a group of eminent economists (Stiglitz Commission, 2009) suggested after a long study to ask people what matters to them in terms of their wellbeing. Apparently, this was a revolutionary change for economists, as a move away from income measurement. Again, nothing has been heard from this afterwards, probably because it cannot easily be operationalized.

In general, subtle preoccupations about wellbeing and its measurement may be appropriate in rich countries where most people have enough income, but they matter little in Africa. There, economic growth and GDP are still of the utmost importance and are a necessary condition for any other goodies in life. And yes, there are also other concerns, social and political ones, but most other indicators are at least (cor)related to per capita GDP.

Although growth in per capita income is a prerequisite to human development, it is not sufficient in itself. In addition to this, one also has to take into account the distribution of income and its changes over time, as well as government expenditure on health and education. Then one may capture nicely the basic needs situation of most Africans. And that is what matters still at this time in its history.