GDP & BEYONDCIVIL SOCIETY PARTICIPATION IN

SELECTING COMPLEMENTARY INDICATORS

Stefano Palmieri

IX National Conference on Excellence in Management –

XII International Conference on CSR

Universidade Federal Fluminense

Rio de Janeiro, 20 June 2013

CONTENT

• The long revolution in measurement

• Recent years

• The paradigm shift: from economic growth

to societal progress

• The involvement of civil society (the EESC

Opinion)

The long revolution in measurement

1930 - 2013

3

THE LONG REVOLUTION: THE MATERIALIST PHASE (1930-1970)

1930–1970

MATERIALIST PHASE

GDP

ECONOMIC INDICATOR

19302013

GDP is a measurement that "specialises" in a particular segment of activity – essentially market-based – of a given society.

-The Great Depression- World War II

1970

THE CORRELATION BETWEEN GDP AND WELL-BEING

• GAPMINDER

THE MATERIALIST PHASE…went into CRISIS

“Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. (…) it measures everything, in short, except that which makes life worthwhile.”

Robert KennedyKansas March 18, 1968

THE SOCIAL PHASE (1970 - 1990)

1970 – 1990

SOCIAL PHASE

ECONOMIC INDICATORS

+ SOCIAL INDICATORS

Between the 1960s and the 1990s scholars began to design social indicators as complements or alternatives to GDP, which could reveal areas of enquiry in addition to the traditional economic domain.

Towards the end of the 1980s the Brundtland Report (1987) brought the issue of sustainable development to the world's attention.

1970 1990

THE GLOBAL PHASE (1990 – 2013)

2013

1990 - 2013

GLOBAL PHASE

ECONOMIC INDICATORS + SOCIAL INDICATORS + ENVIRONMENTAL INDICATORS

•The ensuing 1992 UN Conference on Environment and Development (Rio Earth Summit) marked the shift to a "global phase" in researching and designing indicators with the capacity to measure the progress of society, using economic, social and, for the first time, environmental parameters.

1990

Recent years

9

European Commission: …on GDP and beyond

• On 20 August 2009 the European Commission published its major communication on GDP and beyond – Measuring progress in a changing world, setting out five actions:

a) complementing GDP with environmental and social indicators;

b) more timely information for decision-making;

c) more accurate information on distribution of income and inequalities;

d) developing a European sustainable development scoreboard;

e) extending national accounts to environmental and social issues.

10

STIGLITZ – SEN – FITOUSSI REPORT

11

On 14 September 2009, the Report by the Commission on the Measurement of Economic Performance and Social Progress was published, with the explicit objectives of:

- Identifying the limits of GDP as an economic and social indicator

- gauging whether further indicators of social progress might be necessary in order to adopt further information

- assessing the possibility of using alternative measurement instruments and discussing how to present statistical information properly.

12 Recommendations

Pittsburg G-20 Summit

• On 25 September 2009, the debate on GDP and the

need for complementary indicators of social and

environmental well-being gained greater authority at

the Pittsburgh G-20 summit.

Its final declaration emphasised that “As we commit to

implement a new, sustainable growth model, we should

encourage work on measurement methods so as to

better take into account the social and environmental

dimensions of economic development”.

12

THE FUTURE WE WANTRio+20 United Nations Conference on Sustainable Development, 20-22 June 2012Agenda item 10Outcome of the Conference

“38. We recognize the need for broader mesures of

progress to complement gross domestic product in

order to better inform policy decisions, and in this

regard we request the United Nations Statistical

Commission, in consultation with relevant United

Nations System entities and other relevant

organizations, to launch a programme of work in this

area building on existing initiatives.”

• Creating new awareness and

knowledge

• Impact on behaviour and decision-

making process of:• Citizens and civil society

• Policy-makers

• New business models (Corporate Social Responsibility, Fair

Trade, … )

OECD,2012: Conclusion of the 4th World Forum

A virtuous cycle

OECD,2012: Conclusion of the 4th World Forum

EQUITABLE AND SUSTAINABLE WELL-BEING IN ITALY 2013: twelve domains - 134 indicators

• Health (14)

• Educationand training

(10)

• Work and life balance

(12+3)

• Economic well-being

(10)

• Social relationships (11)

• Politics and institutions

(13)

ISTAT, 2013: Equitable and sustainable well-being in Italy

• Security (11)

• Subjective well-being (3)

• Landscape and cultural

heritage (12)

• Environment (13)

• Research and

Innovation (7)

• Quality of services

(13+2)

The System of Xiaokang Indicators: CHINA6 Domains23 Indicators

• – Economic development (Indicators 1-5)

• – Social harmony (Indicators 6-10)

• – Quality of life (Indicators 11-15)

• – Democracy and law (Indicators 16-17)

• – Culture and education (Indicators 18-20)

• – Resources and environment (Indicators 21-23)

Xu Xianchun, 2009

GROSS NATIONAL HAPPINESS: BHUTAN: 9 Domains – 33 Indicators

GROSS NATIONAL HAPPINESS: BHUTAN: 9 Domains – 33 Indicators

Transform your mind to change the World: “Today GNH has come to mean so many things to so many people, but to me it signifies simply – development with values. Thus for my nation today GNH is the bridge between the fundamental values of kindness, equality and humanity and the necessary pursuit of economic growth. GNH acts as our National Conscience guiding us towards making wise decisions for a better future”

(The present King of Bhutan, His Majesty Jigme Khesar Namgyel Wangchuck )

WHAT IS THE GROSS NATIONAL HAPPINESS IN BUTHAN?

“The right to delirium”(Eduardo Galeano)

The paradigm shift

“If we measure the wrong things we do the wrong things”

(Robert Stiglitz, 2013)

22

The New Paradigm of Reference: the Progress of Societies

Today Economic Growth is no longer

enough to ensure real progress for the

community unless it is inclusive from the

social and territorial point of view, and

sustainable from the environmental point

of view.

23

The concept of PROGRESS

• A far wider-reaching and more complex concept,

whose multidimensional character entails a range of:

i) Objectives to be pursued;

ii) Policies and actions to be planned;

iii)Indicators to monitor the state of progress towards

these objectives.

• The concept of progress itself may imply different

interpretations and meanings in different places, for

different populations, cultures and religions

24

The debate

• Far from simplifying matters, the change of benchmark

from economic growth to progress tends if anything to

complicate them.

• The meaning of progress

• Redefining the concept of development

• Identifying the objectives to be pursued and the tools

to achieve them

• In other words, a debate that enables society – in all its

individual parts – to focus on what it considers

essential for its own esistence.

25

WHAT DETERMINES SOMEONE’S WELL-BEING IN A FEW WORDS

choice

community

educationequity

justicereligion

My football team…onlywhen WIN

money

equality

environment

friendship

safety

employment

freedom love

respect

happiness

healthfamily

dignity sex

fitness

THE EESC OPINION

Shaping indicators that reflect people's quality of life and social conditions in relation to the

sustainability of economic systems

• The EESC continues to view the development of this work

as crucial, in particular by means of a comprehensive

approach.• the new European strategies for stability and economic growth, for

development and social cohesion, and for environmental

sustainability.

• The first agenda against which the preparation of

complementary indicators to GDP should be measured is

the Europe 2020 Strategy.

• a new definition of well-being and the progress of

societies cannot be separated from concurrent

European policies to tackle the renewed impact

of the economic and financial crisis.

• a new benchmark that bases development on

well-being and the progress of societies.

SOCIAL AND ENVIRONMENTAL SUSTAINABILITY INDICATORS

VS. ECONOMIC AND FINANCIAL INDICATORS

The gap between

- economic policies at both national and European level

- and policies for well-being and social progress

has widened considerably

EU 2020: the new trajectory

• The inclusive growth: the missing train

2011:

• 119,6 mn people (24.2% of the population)

were at risk of poverty or social exclusion

- 16,9% of the tot.pop. At risk-of-poverty after social transfers

- 8,8% of the tot.pop. Severely materially deprived

- 10,0% living in households with very low work intensity

THE ROLE OF CIVIL SOCIETY IN THE PROCESS

• determine the arenas in which the progress of societies is to be gauged, identifying specific areas and salient facts (in the economic, social and environmental spheres). This can be done by means of dedicated information, consultation and participation instruments.

• The legitimacy of public decisions cannot be assured only by official guarantees and systems – whether institutional, legal or constitutional – emanating from the State, but must necessarily be based on the contribution of civil society.

• Civil society's particular contribution to mapping out the prospects for development and well-being represents a necessary policy input not only into combining the participatory dimension with the knowledge dimension, but also into pursuing the objectives set.

THE DELIBERATIVE PARADIGM

• “a process of exchanging information and opinions

regarding a shared decision in a forum for discussion where

collective preferences are formed and expressed”

• which should serve as the foundation for future well-being

and progress indicators, should itself be rooted in:

• face-to-face meetings between institutional actors and

representatives of civil society,

• the involvement in the decision-making process of all the interests at

stake when envisaging the measurement and pursuit of well-being

and social progress,

• constant pursuit of the common good, particularly in outcomes

emerging from debate.

The EESC undertakes to continue monitoring activities that, at national and European level, entail the involvement of civil society in preparing indicators complementary to GDP.

The EESC emphasises its willingness to act as a meeting place between organised civil society and official European bodies as part of a participatory decision-making process to identify and design indicators of progress for the European Union.

Sometimes individual happiness is not easy to quantify but ….. this does not mean that you cannot value it!?!

…from the Italian Movie: “I Mostri” (1963) by Dino Risi

Tribute to Vittorio GASSMAN…and my FAVOURITE TEAM:

AS ROMA

Obrigado pela sua atenção

FOR ANY INFO & COMMENTS: stefano.palmieri@eesc.europa.eu