Wellbeingand!! SustainableDevelopment...UN!SG’s!Synthesis!Report! Workondeveloping alterna’ve)measuresof)progress,)beyond) GDP,!mustreceive!the!dedicated!a@enAon!of!the!United!NaAons,!

Well-‐being and

Sustainable Development Enrico Giovannini University of Rome “Tor Vergata”

UN SG’s Synthesis Report §  The year 2015 offers a unique opportunity for global leaders and people to end poverty, transform the world to be5er meet human needs and the necessi9es of economic transforma9on, while protec9ng our

environment, ensuring peace and realizing human rights. §  We are at a historic crossroads, and the direc9ons we take will

determine whether we will succeed or fail on our promises. With our globalized economy and sophis9cated technology, we can decide to end the age-‐old ills of extreme poverty and hunger. Or we can con9nue to degrade our planet and allow intolerable inequali9es to sow bi5erness and despair. Our ambi9on is to achieve sustainable development for all.

§  TransformaFon is our watchword. At this moment in 9me, we are called to lead and act with courage. We are called to embrace change. Change in our socie9es. Change in the management of our economies. Change in our rela9onship with our one and only planet.

UN SG’s Synthesis Report

Work on developing alterna've measures of progress, beyond GDP, must receive the dedicated a@enAon of the United NaAons, internaAonal financial insAtuAons, the scienAfic community, and public insAtuAons. These metrics must be squarely focused on measuring social progress, human wellbeing, jus'ce, security, equality, and sustainability. Poverty measures should reflect the mul'-‐dimensional nature of poverty. New measures of subjec've wellbeing are potenAally important new tools for policy-‐making.

The last ten years: a transformaFonal movement

•  In October 2014 we celebrated the tenth anniversary of the first OECD World Forum on “Sta9s9cs, knowledge and policy”

•  The Palermo Forum was the star9ng point of a process that today, thanks to the efforts made in all con9nents to take the “Beyond GDP” agenda forward, the world has recognised as vital

The last ten years: key steps –  October 2004: First OECD World Forum on “Sta9s9cs, knowledge and

policy” –  2005: “Global project on measuring the progress of socie9es” established –  July 2007: Second OECD World Forum and “Istanbul Declara9on” –  November 2007: European Conference “Beyond GDP” –  January 2008: Establishment of the “S9glitz-‐Sen-‐Fitoussi Commission” –  August 2009: EC Communica9on on “GDP and Beyond” –  September 2009:

•  OECD Framework on “Equitable and sustainable well-‐being” •  SSF Report •  G20 Communique

–  October 2009: Third OECD World Forum and OECD Roadmap –  2011: OECD Be5er life ini9a9ve and Be5er life index –  2012 Fourth OECD World Forum –  September 2015: Adop9on of the SDGs –  October 2015: Fi^h OECD World Forum

TheoreFcal background •  Economic literature:

–  Role of informa9on in “Games Theory” (Nash, Akerlof, Rothschild and S9glitz, etc.)

–  Role of informa9on in ra9onal expecta9ons models (Muth, Lucas, etc.)

•  Poli9cal sciences literature: –  Role of informa9on in models for democra9c choices (Downs,

Wi5man, Alesina, etc.) –  Role of informa9on in poli9cal process and elec9ons (Swank, Visser,

etc.)

Clear conclusion: “shared informa9on” is fundamental to improve markets func9oning and minimise social welfare losses

The value added of official staFsFcs Vtsu = value added at 9me t Ptsu = value of produc9on Ctsu = intermediate costs Where do we classify the produc9on of sta9s9cs?

-‐-‐-‐-‐> ISIC: public services Where does the value of a service come from?

-‐-‐-‐-‐> SNA: change in the consumer What kind of change should happen in a consumer of sta9s9cs?

-‐-‐-‐-‐> more knowledge

The value added of official staFsFcs Q = sta9s9cs produced Rm = role of media R = relevance F = trust L = literacy i = consumer n = number of consumers

Some references “We have used GDP to determine wrongfully what is in fact the state of well-‐being of a country … GDP is necessary but inadequate, and we need to develop addiAonal indices that would tell a more comprehensive, a more holisAc story about how human society is progressing … The human being has two needs, the needs of the body and the needs of the mind, and what we have focused on so far is mostly the body, perhaps only the body … So, it’s a paradigm shiO that we need to make”.

Jigmi Y. Thinley, former prime minister of Bhutan

Some references “Many people looked at US GDP growth in the 2000s and said: ‘How fast you are growing – we must imitate you.’ But it was not sustainable or equitable growth. Even before the crash, most people were worse off than they were in 2000. It was a decade of decline for most Americans.”

Joseph E. Stiglitz, Nobel laureate in economics

Some references “We have a very different measure of what consAtutes progress in this country. We measure progress by how many people can find a job that pays the mortgage; whether you can put a li@le extra money away at the end of each month so you can someday watch your child receive her college diploma … not by the number of billionaires we have or the profits of the Fortune 500, but by whether someone with a good idea can take a risk and start a new business, or whether the waitress who lives on Aps can take a day off to look aOer a sick kid without losing her job an economy that honours the dignity of work”.

Barack Obama, President of the United States of America

Some references

Pope Francis

“The human environment and the natural environment deteriorate together; we cannot adequately combat environmental degradaAon unless we a@end to causes related to human and social degradaAon. In fact, the deterioraAon of the environment and of society affects the most vulnerable people on the planet … Ecology studies the relaAonship between living organisms and the environment in which they develop. This necessarily entails reflecAon and debate about the condiAons required for the life and survival of society, and the honesty needed to quesAon certain models of development, producAon and consumpAon. It cannot be emphasized enough how everything is interconnected.

The Istanbul declaraFon •  A culture of evidence-‐based decision making has to be promoted at all levels

of government, to increase the welfare of socie9es. •  We affirm our commitment to measuring and fostering the progress of

socieFes in all their dimensions and to suppor9ng ini9a9ves at the country level.

•  We urge staFsFcal offices, public and private organisaFons, and academic experts to work alongside representa9ves of their communi9es to produce high-‐quality, facts-‐based informa9on that can be used by all of society to form a shared view of societal well-‐being and its evolu9on over 9me.

•  To take this work forward we need to: –  encourage communiFes to consider for themselves what “progress” means; –  share best pracFces and increase the awareness of the need to do so using sound

and reliable methodologies; –  sFmulate internaFonal debate, based on solid sta9s9cal data and indicators, on

both global issues of societal progress and comparisons of such progress; –  advocate appropriate investment in building staFsFcal capacity, especially in

developing countries, to improve the availability of data and indicators needed to guide development programs and report on progress toward interna9onal goals, such as the MDGs.

Euro area. Index 2004 Q4=100

2004-2008 2008-2013 2004-2013 GDP current +17,9% +3,1% +21,0% GHDI current +14,4% +3,1% +17,5% GDP real +9,8% -3,7% +6,1% GHDI real +4,0% -5,3% -1,3% GDP real/pop +7,2% -5,2% +2,0% GHDI real/pop +1,4% -6,8% - 5,5%

Does the well-‐being perspecFve change the picture?




Towards a secular stagnaFon?

Towards a secular stagnaFon?

When ‘Secular StagnaAon’ meets Pike@y’s capitalism in the 21st century.

Growth and inequality trends in Europe reconsidered

“Slow growth prospects and rising inequali9es are a real threat to the social fabric in Europe at the current juncture and over the medium-‐term. This is a fact and denial is not a strategy. Perhaps belatedly, policy makers in Europe

have taken up the challenge. And more determined ac9on may s9ll be needed”.

Sustainable Development Goals: A Universal Agenda

Human development index

(and not the other way round), what can we do? Put people at the centre and focus on policies aimed at

building resilience at all levels.

Develop a «Social resilience package» -‐ Improve European labour market to foster mobility -‐ Ac9ve labour policies + EU unemployment benefit scheme -‐ Reduce tax wedge with a EU coordinated ac9on -‐ Special investment in human capital (satellite account) -‐ Social «resilience guarantee» (like the «youth guarantee»)

The OECD framework to measure progress (2009)


FINAL GOALS Ecosystem CondiAon: outcomes for the environment

land (geosphere) freshwater, oceans and seas (hydrosphere) biodiversity (biosphere) air (atmosphere)

Human well-‐being: outcomes for people physical and mental health knowledge and understanding work and leisure material well-‐being freedom and self-‐determina9on interpersonal rela9onships

Human well-‐being: cross-‐cueng goals intra-‐genera9onal aspects: equity/inequality inter-‐genera9onal aspects: sustainability/vulnerability/resilience


INTERMEDIATE GOALS Economy

-‐ na9onal income -‐ na9onal wealth

Governance -‐ human rights -‐ civic and poli9cal engagement -‐ security -‐ trust -‐  access to services

Culture -‐ cultural heritage -‐ arts and leisure

Resource management, use, development and protecAon -‐ resource extrac9on and consump9on -‐ pollu9on -‐ protec9on and conserva9on of economic and environmental assets

The progress of a society is an increase in equitable and sustainable well-‐being

The OECD well-‐being conceptual framework

One addiFonal step

“Full World” Vision of the Whole System

Production process

The Istat-‐Cnel iniFaFve on Equitable and Sustainable Well-‐Being (BES)

•  The project was deisgned to produce a dashboard of indicators able to provide a shared view of the progress of the Italian society.

•  It was built on a process that involved:

a)  Steering Comi5ee: with the par9cipa9on of stakeholders and Istat experts, to iden9fy the domains and to agree on the final list of indicators;

c)  Scien9fic Commission: with the par9cipa9on of experts in different fields, to select poten9al indicators based on quality concerns;

d)  Public consulta9on. •  Biennial reports. •  Widely quoted, especially by media and civil society.

The Istat-‐Cnel iniFaFve on Equitable and Sustainable Well-‐Being (BES)

Discussion

Survey on what ma5ers to people (24.000 households)

Steering Commi5ee 12 Domains

Scien9fic Comission

134 Indicators

On-‐line ques9onnarire

(2500 people)

and a Blog

Regional and sectoral mee9ngs

Final report and website

What is important for your well-‐being?

Mean % of 10 Being in good health 9,7 79,9 Guarantee the future of your children socially and economically 9,3 66,1

Have a decent work of which being sa9sfied 9,2 59,5 Have an adequate income 9,1 56,0 Good rela9onships with friends and rela9ves 9,1 53,2 Be happy in love 9,0 53,6 Feeling safe with respect to criminality 9,0 56,3 Good educa9on 8,9 48,8 Present and future environmental condi9ons 8,9 48,3 Live in a society in which you can trust others 8,9 48,8 Good governance 8,8 46,6 Services accessible and of good quality 8,7 43,9 Adequate free 9me and of good quality 8,5 37,4 Be able to influence local and na9onal policies 7,8 30,6 Par9cipa9on to community life 7,1 18,7

Score from 0 to 10 given to wellbeing dimensions – Year 2011

Key domains for the Italian BES

The individual sphere

The context

Lessons learned

•  Need for a broad discussion with different actors: •  The deliberative process led to a 360°discussion over each theme,

taking advantage of available information and analytical models; •  The debate made reached an agreement over a number of difficult

and new issues, such as Landscape and cultural heritage, soil use, quality of services, research and innovation;

•  It granted strong legitimacy to the final output. •  Increasing interest at local level and chance for convergence:

several local institutions are following closely the process, in order to apply the set of indicators in their territories.

•  Important tool to strengthen the position of the NSI vis-à-vis users, researchers and the society as a whole.

•  It is a long and delicate process. After nearly two years, the scientific part hasn’t ended yet; its policy application is just beginning.

•  Evidence-based decision making is the real challenge, and we have to better understand how it works.

The internaFonal measurement agenda

-  Eurostat and ESS -  Quality of life -  Sustainable development

-  OECD -  “High-Level Expert Group on the measurement of economic

performance and social progress” -  Subjective well-being -  Inequality -  Sustainability

-  UNDP -  Human development indexes -  Multidimensional poverty -  ISI-IEA Strategic Forum -  National initiatives: Italy, UK, Germany, etc. -  Social Progress Index, etc.

The UN measurement agenda for SDGs

The integrated reporFng systems for enterprises

Towards a CorporaFon 2020?

The “Data RevoluFon for Sustainable Development”

A World that Counts:

Mobilising the Data RevoluAon for Sustainable Development

Lessons learned

The data revoluFon is already happening: -‐ New technologies leading to exponenFal increase in volume and types of data available -‐ Much greater demand for data from all sides -‐ Governments, companies, researchers and ci9zen groups are in a ferment of experimentaFon, innovaFon and adaptaFon

A huge opportunity, with several risks: Privacy, Human rights, Poor quality data, Breakdown of trust Data are not only necessary for monitoring, but also for achieving SDGs Monitoring will require substanFal addiFonal investment to: -‐  develop reliable, high-‐quality data on a range of new subjects, -‐  ensure that no groups are excluded -‐  with an unprecedented level of detail and Fmeliness

Obstacles to use the “Beyond GDP” approach

•  Lack of democraFc legiFmacy. The indicators being put forward have not been agreed democra9cally and lack public support.

•  Lack of underpinning theory and narraFve. The indicators, unlike GDP, are not underpinned by a consistently ar9culated theory or ideology, summarised in a poli9cally compelling narra9ve.

•  Lack of a clear poliFcal imperaFve. The economic crisis has meant the priority has been to fix the economy in the tradi9onal way.

•  The need for organisaFonal change. An integrated approach requires working across departmental boundaries or alterna9vely reforming economics departments.

•  InsFtuFonal resistance to change. This always exists and as always reflects the fact that the power and/or success of ins9tu9ons o^en depends on tradi9onal objec9ves and models.

•  Technical quesFons with indicators. There remain disagreements about defining indicators, par9cularly on whether and how to create a single alterna9ve to GDP.

•  No widely used analyFcal tools for integrated and innovaFve economic policy making. The tools needed are s9ll in development. Innova9on in civil services is always difficult.

Obstacles to use the “Beyond GDP” approach The BRAINPOoL Report recommends: •  “three kinds of acAon. None of these can succeed without the others and all of them require co-‐operaAon between poliAcians and officials:

–  Build support for change – insAtuAons need to sAmulate a broad public debate about the kind of society Europeans want, while drawing on the range of theories currently in play as to how to achieve this;

–  Develop and embed be@er analyAcal tools into policy making processes;

–  Improve procedures and structures so that the will for change is not diverted into rhetoric but channelled into effecAve acAon”.

Obstacles to use the “Beyond GDP” approach Two reports on well-‐being have been recently published in the UK: Wellbeing and Policy by Gus O’Donnell et al. for the Legatum Ins9tute and Wellbeing in four policy areas, by the UK All-‐Party Parliamentary Group on Wellbeing Economics. In par9cular, the second Report recommends that all poli9cal par9es should set out their understanding of, and approach to, well-‐being in their manifestos and that the Government set out a well-‐being strategy, including: • objec9ves and how it intends to achieve them; • the use of a well-‐being based policy assessment and the development of new tools to support it; • the incorpora9on of a well-‐being assessment into budget alloca9ons between and within departments; • tools to facilitate the cross-‐departmental work needed to increase the well-‐being benefits of policy.

The UNDP approach: vulnerability and resilience

Is this feasible?

“… In such a spirit on my part and on yours we face our common difficul9es. They concern, thank God, only material things. Values have shrunken to fantas9c levels; … our ability to pay has fallen; … the means of exchange are frozen in the currents of trade; … the savings of many years in thousands of families are gone. More important, a host of unemployed ci9zens face the grim problem of existence … … The people of this country have been erroneously encouraged to believe that they could keep on increasing the output indefinitely and that some magician would find ways and means for that increased output to be consumed with reasonable profit to the producer. … Without regard to party, the overwhelming majority of our people seek a greater opportunity for humanity to prosper and find happiness. They recognize that human welfare has not increased and does not increase through mere materialism and luxury, but that it does progress through integrity, unselfishness, responsibility and jus9ce …”

Is this feasible?

“… In such a spirit on my part and on yours we face our common difficul9es. They concern, thank God, only material things. Values have shrunken to fantas9c levels; … our ability to pay has fallen; … the means of exchange are frozen in the currents of trade; … the savings of many years in thousands of families are gone. More important, a host of unemployed ci9zens face the grim problem of existence … … The people of this country have been erroneously encouraged to believe that they could keep on increasing the output indefinitely and that some magician would find ways and means for that increased output to be consumed with reasonable profit to the producer. … Without regard to party, the overwhelming majority of our people seek a greater opportunity for humanity to prosper and find happiness. They recognize that human welfare has not increased and does not increase through mere materialism and luxury, but that it does progress through integrity, unselfishness, responsibility and jus9ce …”

UN SG’s Synthesis Report •  Today’s world is a troubled world; one in turmoil and turbulence,

with no shortage of painful poli9cal upheavals.

•  SocieFes are under serious strain, stemming from the erosion of our common values, climate change and growing inequali9es, to migra9on pressures and borderless pandemics.

•  It is also a 9me in which the strength of naFonal and internaFonal insFtuFons is being seriously tested.

•  The nature and scope of this daun9ng array of enormous challenges necessitate that both inac9on and business-‐as-‐usual must be dismissed as op9ons.

UN SG’s Synthesis Report •  If the global community does not exercise naFonal and internaFonal

leadership in the service of our peoples, we risk further fragmenta9on, impunity and strife, endangering both the planet itself as well as a future of peace, sustainable development and respect of human rights.

•  Simply put, this generaFon is charged with a duty to transform our socieFes.

Documents

Wellbeingand!! SustainableDevelopment...UN!SG’s!Synthesis!Report! Workondeveloping alterna’ve)measuresof)progress,)beyond) GDP,!mustreceive!the!dedicated!a@enAon!of!the!United!NaAons,!