The task of embedding wellbeing in policy-making

Inclusive Economy05 Jul 2013Evert-jan Quak

The debate on wellbeing should not only inform but also be useful for policy-makers. But how can we move from the measuring agenda to embedding wellbeing in policy-making? What can wellbeing offer policy-makers? These questions were addressed during the second day of the OECD-Universities Research conference Economics for a Better World.

The debate on wellbeing versus GDP is at a turning point. Measurements have significantly improved in recent years. It is now time to translate these efforts into a policy agenda and a workable framework for policy-makers. Take for example the effort of the OECD to build a wellbeing framework based on its Better Life Index. The idea is that GDP is important, but should not be a goal in itself. Policy-makers need the tools to understand how to look beyond GDP measurement.

Although the metrics still have to be further developed, chief OECD statistician Martine Durand is pushing to set a policy agenda on wellbeing. This fits in the OECD’s renewed mission Better Policies for Better Lives.

This is a huge step, says Durand, as economists have less feeling for the policy drivers of wellbeing. Political attention to wellbeing is increasing, but persuading policy-makers and ministers to use the metrics is difficult. Durand asks the question: what should we focus on to get policy-makers to devote attention to wellbeing?

For policy-makers life used to be simple. They looked at GDP and if it was growing the rest would follow. But this attitude is no longer valid. The reality is more complex, so wellbeing experts should try to help policy-makers to map out interrelationships across dimensions of wellbeing. Benchmarking alone is not enough; governments need a more joined-up policy design or framework which they can use and which takes policy trade-offs into account.

One country in particular is experimenting with such a framework. In New Zealand, the Treasury is working with a model that puts living standards at the heart of all policy advice. For them the end goal of policy is not growth or employment alone, they want to see an increase in a series of social, environmental and economic values that together represent an increase in wellbeing.

Another way governments can better integrate the concept of wellbeing is to use and develop more effective social impact assessment. This was the message advocated by Peter Lelie, Federal Public Service Social Security (Belgium), in his presentation. Lelie says that there are plenty of challenges. Policy-makers do not yet see impact assessment in general as a tool that has added value. If they use it, they use it mostly as a tick-box exercise. Furthermore, social impact is included implicitly, the focus remains on budgetary and economic impacts. This is for a reason, there is a lack of appropriate tools, models, data resources to assess social impacts. Social impact assessments are based on qualitative methods which have to be translated into more quantitative data. However, evaluation of impacts on vulnerable and small groups is not visible in such data. Another problem is that the cycle of policy-making does not coincide with the process of social impact assessments.

Even if governments were to measure social impact more effectively in the near future, the results should be translated into overall wellbeing conclusions and not be measured only on individual impact criteria.

Given all the challenges ahead to move the concept of wellbeing closer to policy-makers, the positive message from the conference is that some efforts are now being made within the OECD and its member states to translate the results of wellbeing research into policy-related frameworks and that this issue will be more prominent in future wellbeing debates.