Progress: from compass to global positioning system

Director, OECD Statistics Directorate

Martine Durand ©OECD

For most of the last century, progress in the conditions of our societies was often assessed through the compass of economic growth, or GDP. In recent years, however, both governments and citizens have come to recognise that GDP provides only a partial view of today’s economic and social conditions and of whether these conditions can be expected to last in the future. Better indicators are needed that take into account sustainability, equity and quality of life.

Getting lost may soon be a thing of the past. Sophisticated navigation tools such as satellite tracking and street-view maps are now so widely available that people take for granted that they can know instantly where they are, where they’ve been and, most importantly, where they are heading. Orientating our societies is not as easy. For that, we would need reliable information on the many aspects that make for a “good life”. Unfortunately, an information system with these characteristics is still lacking.

The OECD has been exploring these issues for many years now, and developing better statistics lies at the heart of its mission to foster “better policies for better lives”. Building on this experience, in 2011, during the OECD Ministerial Council meeting, the Secretary-General launched the OECD Better Life Initiative, whose goal is to bring to the attention of citizens and policymakers a comprehensive set of indicators encompassing the different areas that matter for people’s lives. One element of this initiative is the report How’s Life?, released in October 2011. This report focuses on 11 dimensions of people’s well-being, namely income and wealth; jobs and earnings; housing; health status; work and life balance; education and skills; social connections; civic engagement and governance; environmental quality; personal security; and subjective well-being. The OECD Better Life Initiative is an ambitious undertaking but also a necessary one, as it aims not only to present indicators based on the best available data today but also to highlight areas where further statistical development is needed.

One of the main challenges in measuring well-being is that people have different views about what is most important to them. This is why it has proven difficult, if not impossible, to replace GDP with another singlenumber index; combining information on different dimensions based on different metrics into a single number means making choices about the weight of these different components, choices which can be controversial. On the other hand, summary indices are useful tools for ordinary citizens to bring together information on several dimensions in order to compare living conditions across countries or over time. The OECD has addressed this challenge with Your Better Life Index, an online interactive tool which allows users to create their own personalised index by rating the importance of each of the 11 well-being dimensions. Users can then compare well-being in the 34 OECD countries and share their index with other people and with the OECD. Overall, more than 500,000 users have used the OECD tool since May 2011.

The indicators underpinning Your Better Life Index have been selected on the basis of their quality and policy relevance. These indicators are the best that are available today to compare people’s lives across OECD countries. This does not imply, however, that the selected indicators are perfect. In some cases, they are only approximations of the most relevant concept (e.g. due to the lack of comparable data, the net worth of households is proxied by their stock of net financial wealth). In other cases (e.g. for social connections and subjective well-being), no comparable data produced by National Statistical Offices currently exist; overcoming this limit has required making use of non-official statistics, which were included as space holders until better and more comparable indicators become available.

Beyond measuring average conditions in each country, the stakes are even higher when it comes to assessing inequalities: How’s Life? presents fairly comprehensive information on differences across age groups and gender, but the picture is much sketchier when we want to compare people’s education or socio-economic conditions. The OECD is currently undertaking important methodological research to better measure vulnerability and resilience, as well as inequalities in the various dimensions of people’s material conditions and quality of life.

Achieving a more sustainable future will require preserving the stocks of socio-economic and natural assets for future generations around the world. The OECD is looking at ways of better taking into account sustainability issues, including from the perspective of developing countries. The development of new indicators is at the core of the OECDwide strategies on green growth and development, which will inform international processes such as the United Nations Conference on Sustainable Development (Rio+20), to be held in Brazil on the 20th anniversary of the Rio “Earth Summit”, and the discussion on how the Millennium Development Goals should evolve after 2015.

The year 2011 was a turning point for the OECD’s work on measuring progress. After having long argued over the need for a new generation of statistics informing about people’s well-being and societies’ progress, we have issued our first compilation of statistics in this field. The OECD commitment to develop better indicators of people’s lives is stronger than ever, and we are collaborating closely with the many OECD countries and organisations that have launched ambitious national and regional initiatives in this field. In many ways, however, this work is still in its infancy; developing better measures of progress, and ensuring that these are used by policymakers, is an ongoing mission. To provide impetus towards this goal, the OECD is organising a range of high-level regional conferences bringing together experts from governments, statistical offices, academia, and the private and non-profit sectors, culminating in the 4th OECD World Forum on Statistics, Knowledge and Policy, to be held in New Delhi, India in October 2012.

While we are still far from having a comprehensive global information system, we are working hard to develop the statistical equivalent of the Global Positioning System that will help design “better policies for better lives” around the world.

Better Life Initiative: Measuring Well-being and Progress

Create your own Better Life Index

See also: 

OECD (2011), How's Life?: Measuring Well-being, OECD Publishing.

©OECD Yearbook 2012

Economic data


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