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Governance-integrated GPI may be introduced to measure progress

Published : Thursday, 9 May, 2024 at 12:00 AM  Count : 536
MD Shiyan Sadik
Empirical pieces of evidence have always been in Favor of GDP (Gross Domestic Product) as a major indicator of economic and social development. Most of the countries in the world have adopted the statistical perspective of GDP despite its incapability of accounting for several aspects such as education, health, social well-being, environmental factors, inequality, etc in the matrix. It has been solely argued from a development perspective that GDP fails to represent a holistic view of a nation which often guides to inadequate plans and policies.

This had been similar to indicators like GNP (Gross National Product) and CPI (Consumer Price Index) where income had been the fundamental component. A much broader concept was then formalized by introducing HDI (Human Development Index) which was a composite measurement of education, health (Life expectancy), and income which was well accepted by policymakers. However, the adjustment of inequality along with environmental costings was still a bone of contention. IHDI commonly known as inflation-adjusted HDI derives the idea of calculating the loss in potential human development due to inequality but still lacks in incorporating the environmental, social, and institutional framework to the matrix.

Some out-of-the-box indicators also gained limelight due to their fancy way of evaluating life but they remained restricted to a much theoretical level within a specific regional map. For instance, The GNH (Gross National Happiness) coined by Bhutan consists of nine domains which include psychological well-being, health, time management and balance, education, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards.

The nine domains contain 33 GNH situations expressed as indicators. The indicators and domains attempt to highlight various dimensions of well-being and human flourishing, as well as alternative approaches to addressing underlying human needs. However, the reach was limited to Bhutan and never gained global momentum.

In 2008, the UK Government Office of Science commissioned the Happy Planet Index (HPI) team to determine the primary causes of personal well-being. The Five Ways to Wellbeing, as they became known, are evidence-based positive behaviours that anyone can take to improve their well-being. They have been widely employed in public mental health settings around the world, and the best part is that none of them have to cost the planet. Most of the indicators failed to justify the holistic approach to development.

In my opinion, GPI (Genuine Progress Indicator) has attempted to identify the issue of proper valuation and approached for an extensive calculation than other indicators. The GPI, unlike GDP, considers various elements that impact social well-being. The concept includes not only economic output but also important social and environmental factors including income distribution, education, healthcare, resource depletion, environmental degradation, and crime rates.


A holistic perspective offers a more accurate and relevant assessment of a countrys growth and development over the years. GPI incorporates the value of unpaid work, such as care giving and home tasks, which contribute considerably to well-being but are sometimes disregarded in GDP calculations. Recognizing and recognizing these contributions gives a more accurate picture of societys well-being. GPI includes quality-of-life metrics such as health, education, and leisure time, all of which are important components of human well-being. It evaluates whether economic progress improves these areas rather than focusing exclusively on material wealth.

In my opinion, this particular calculation still lacks in incorporating the WGI (Worldwide Governance Indicators) or the averaged aggregated governance indicators which is specifically necessary for developing nations as they encounter institutional drawbacks more than other developed nations. Coherent with the goal of SDG 16, the need for proper equitable practices through functioning institutes is not only confined to specific nations but also postulates a global demand. This might be a bit more complex than other models as GPI is still not popular as an index. The computation assesses the influence of activities such as deforestation and pollution on a countrys well-being. Critics claim that putting a monetary value on these environmental aspects can be subjective and disputed. Sometimes the availability of proper data is in question which depicts possible biases in outcome.

A new matrix can be integrated by reforming the theoretical framework of GPI where WGI can be included as a component along with economic, environmental, and social factors. This incorporation will introduce a compact view of economic development where major entities will be evaluated based on a scoring system. Also, the measurement of inequality which had been ignored in GDP can be standardized based on formula to be considered as a necessary component.

It is necessary to be optimistic for policymakers to readily support a program when they anticipate a composite matrix. Linear matrixes like GDP, and GNP have been straightforward and easier to comprehend with economic policies till now. However, the dynamicity of an integrated economic system requires a multilateral approach in terms of creating a matrix. The amended version of GPI might be tough to interpret as a direct statistical view. There would be issues with the proper integration of data also. However, the composite view would capture the holistic development paradigm. This would be a groundbreaking attempt for developing nations as they struggle to comply with their policies due to persistent issues regarding quality-of-life standards. Experts need to collaborate on formulating the theoretical background for this matrix where opinions from several perspectives will be added. Thus, this would eventually take place as a useful matrix in terms of economic and social development.

The writer is Lecturer, Department of Environmental Science and Management, North South University



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