Bookmark and ShareJuliet Michaelson is a researcher at nef‘s centre for well-being.


What is the best way to measure whether a country is successful? For most of the last 100 years, we have tended to assume that the answer lies in observing the growth of headline economic indicators, such as GDP. Plenty of criticisms have been levelled at GDP – it is far too narrow a measure, takes no account of the distribution of resources or environmental costs, and so on. And recent events hammer home the point that chasing ever-increasing economic growth is a fool’s errand. Even Gordon Brown, since 1997 the de-facto Chief Financial Officer of UK PLC, has had to admit that there’s no such thing as boom without the bust.

Our new report, National Accounts of Well-being: bringing real wealth onto the balance sheet, published on Saturday, provides a different response to the question. It argues that the success of nations is best measured in terms of the things that really matter to the people who live in them: their experiences, feelings and perceptions of how their lives are going. In other words, their subjective well-being. After all, as British economist Andrew Oswald noted almost 30 years ago:

“Economic performance is not intrinsically interesting…People have no innate interest in the money supply, inflation, growth, inequality, unemployment…Economic things matter only in so far as they make people happier.”

What does matter to us, and is arguably the ultimate goal of all human endeavour, is that we feel good about ourselves and the people around us, and do things in our lives which give us a sense of meaning and value.

Of course, the current economic situation is going to seriously hurt a lot of people. But in the post-crash world, we need to ask ourselves whether we want to rebuild the system according to the same flawed blueprint, or find a better compass to guide us.

The first set of National Accounts of Well-being, which nef has produced for 22 countries across Europe, are a tangible means by which governments can monitor their progress in promoting the well-being of their citizens. Using the most comprehensive international survey data on subjective well-being ever collected, we have designed a framework of measures which describe a nuanced picture of people’s experiences. For example, as well as measuring whether people have good feelings, we also look at whether they undertake activities which are meaningful, engaging and which make them feel competent and autonomous. And alongside our first headline measure of personal well-being we also measure people’s social well-being  – whether they have supportive relationships and a sense of connection with others.

The results – which can be explored interactively on the website accompanying the report – show how far we still have to go when measuring success in these terms. While Denmark retains its oft-cited position with the highest well-being levels in Europe, Sweden, so often singled out to be praised for its policy success, does not feature among the top five countries on personal well-being. The UK’s performance according to the headline indicators is distinctly middling, and on the trust and belonging component of social well-being it comes a very poor 20th out of the 22 countries.

By redefining success in terms of how people actually experience their lives, National Accounts of Well-being set out a challenge for anyone interested in shaping the future of their society. But they also provide a crucial tool in efforts towards creating brighter tomorrows, in a classic illustration of one of nef‘s key principles: that measuring the things which matter is a crucial step in getting them to change.

So how quick will governments be to adopt these new measures of success? Given the growing political interest in well-being we’re optimistic that it won’t take too long. In the meantime, we’ll be keeping a close eye on the reaction to our proposal, and carrying on making the case that we should be measuring what matters most…