Although I don’t often give a lot of attention to news about economic indicators and analysis, preferring the much more enthralling subject of tax law to fill any spare time I have left to think about these kinds of things, I recently found out about an economic phenomenon that interested me greatly. I learned that the tiny nation of Bhutan, located between its gigantic neighbors, China and India, has a different way of measuring its success. Known as gross national happiness, this measurement of the quality of its citizens lives’ as opposed to their productivity, turns the usual economic indicator, gross domestic product (GDP), on its ear.
Gross Domestic Products
Also known as gross national product (GNP), gross domestic product refers to the total value of goods and services produced by a country within a certain time period. This measurement is meant to show the size of a country’s economy, and is sometimes used to track the standard of living, as it is assumed that increased productivity translates into better living conditions for citizens.
There are some flaws to this approach, however. Since GDP does not discriminate between positive and negative causes of productivity, a natural disaster can add to the GDP (because of the resources and work put into counteracting its effects), although the event itself is hardly in the best interests of society. Similarly, environmental catastrophes (such as oil spills), the ravages of war, and medical procedures inflate the GDP while having an ill effect on human life and the environment.
Another deficiency of using the GDP as a measurement of national advancement is that it has an extremely narrow focus. For example, using the GDP measurement, the unpaid work of child rearing and housekeeping has no value, nor do non-monetary transactions such as bartering for goods and services.
In short, the whole sphere of human existence cannot be reflected using the GDP, and in fact, GDP distorts the picture because it counts all economic activity as positive, without the counterbalance of what has been lost in terms of environmental damage and human suffering.
For these reasons, economists have come up with another measure of economic growth—the Genuine Progress Indicator, or GPI. This indicator takes into account both the positive and negative effects of a country’s economic activity, in theory providing a much clearer picture of the well-being of its citizens.
WWBD (What Would Buddha Do)?
In 1972, the king of Bhutan, Jigme Singye Wangchuck, coined the term gross national happiness (GNH) to describe the path Bhutan would take to economic development. Drawing on the spiritual tradition of Tibetan Buddhism, GNH is designed to balance economic progress with the well being of the Bhutanese people.
In the words of the Royal Government of Bhutan, “Gross national happiness comprises four pillars: economic self-reliance, environmental preservation, cultural promotion, and good governance. These four goals are mutually linked, complementary, and consistent. They embody national values, aesthetics, and spiritual traditions.”
This approach has had admirable results; not only has the wildlife and landscape of Bhutan been protected (including the endangered snow leopard, and much of the country’s forests), but its cultural traditions have been preserved as well. Its citizens have benefited in other ways, including an extremely high rate of government spending on education and health care (almost 18% of the national budget).
Not surprisingly, GNH has captured the attention of economists around the world, including those who advocate for GPI as opposed to GDP as an economic indicator. In response to this interest, there have been two international conferences on GNH: one in Bhutan in February 2004, and most recently in Nova Scotia in June 2005.
A Nepal-ing Situation
While Bhutan can be held up as a model for other countries to follow in creating a more humane economy, it has not been entirely successful in creating its own peaceful and productive society. The government’s concern with conserving the country’s cultural traditions, and restricting outside influences, has led to some measures that might not be tolerated by citizens of other countries, including restrictions on television and internet access and a traditional dress requirement.
Of more concern is the mass exodus in 1990 of 100,000 citizens of Nepalese descent in response to a government ban on the use of the Nepalese language in schools and colleges. Since 1990, these refugees have been living in camps in Nepal, while Bhutan, Nepal, and India have failed to agree on how they should be accommodated.
I Can’t Believe It’s Not Bhutan
Despite these problems, there is something very attractive about belonging to a society that views the pursuit of gross national happiness as its prime objective. It would be extremely interesting to see the same dynamic going on in other countries: how would our world change if the U.S., the European Union, and other large economies implemented this policy? Maybe we could take the snow leopard off the endangered list once and for all. —Morgen Jahnke