A Lesson from Bhutan: Gross National Happiness
By Kiran Laxman JGSM '11
Issue date: 12/1/09 Section: Features
It's that time of year again, folks: the holidays-a time for reflection, a time to be thankful, and a time to enjoy the little pleasures of life with our loved ones and to make promises to reform for the coming year. Resolutions and reform are easy when the decisions in question affect only you. However, addressing the needs of the nation year on year and formulating plans of public policy are a completely different ball game. It is in this context that Bhutan's decision to adopt a unique parameter called the Gross National Happiness (GNH) index becomes especially interesting.
For starters, the Royal Kingdom of Bhutan is a quaint Himalayan kingdom with a visionary for a king-a rarity in itself. In the 1970s Bhutan's king was one of the few Asian monarchs to voluntarily initiate a gradual shift to democracy, as well as adopting modern macroeconomic principles as drivers of public policy. But, being a staunch believer in Buddhist theology, he increasingly felt the lynchpins of capitalism clashing with his core values.
The king observed that across the world, economic indicators focus largely on market transactions, trade, exchange rates, stock market growth, etc. These conventional indicators, such as Gross Domestic Product (GDP), generally reflect the quantity of physical output of a country. Although GDP is the most widely used indicator, it is heavily biased towards increased production and consumption, regardless of the necessity or desirability of such outputs, and at the expense of more holistic criteria. The universal application of GDP-based indicators to measure standard of living has helped justify policies around the world that are based on rapid material progress, notwithstanding the detrimental effects on environmental preservation, cultures, and community cohesion. This frustration with the limitations of GDP became the impetus for Gross National Happiness.
Beginning in Bhutan, the GNH indicator has made significant progress in today's numbers-based world. Models have evolved over the last three decades that seek to quantify a country's quality of life along nine dimensions: Psychological Well-being, Time Use, Community Vitality, Culture, Health, Education, Environmental Diversity, Living Standard, and Governance.
The growing environmental challenges and the current financial crisis have put GDP's supremacy as a model for economic policy under increased strain. Of course, GNH is not a clear alternative. There are numerous hurdles that challenge the adoption of GNH worldwide, from measuring its dimensions to implementing policies that improve a nation's GNH. To keep things in perspective, Bhutan's capital Thimphu is the only capital city with no traffic lights installed. (Incidentally, the city did install traffic lights a few years back but removed them after the people complained they were too impersonal.)
I am not advocating that adopting the GNH would cure everything wrong with the world. But, it would be an important indicator to complement GDP as a measure of the effectiveness of public policy.
For starters, the Royal Kingdom of Bhutan is a quaint Himalayan kingdom with a visionary for a king-a rarity in itself. In the 1970s Bhutan's king was one of the few Asian monarchs to voluntarily initiate a gradual shift to democracy, as well as adopting modern macroeconomic principles as drivers of public policy. But, being a staunch believer in Buddhist theology, he increasingly felt the lynchpins of capitalism clashing with his core values.
The king observed that across the world, economic indicators focus largely on market transactions, trade, exchange rates, stock market growth, etc. These conventional indicators, such as Gross Domestic Product (GDP), generally reflect the quantity of physical output of a country. Although GDP is the most widely used indicator, it is heavily biased towards increased production and consumption, regardless of the necessity or desirability of such outputs, and at the expense of more holistic criteria. The universal application of GDP-based indicators to measure standard of living has helped justify policies around the world that are based on rapid material progress, notwithstanding the detrimental effects on environmental preservation, cultures, and community cohesion. This frustration with the limitations of GDP became the impetus for Gross National Happiness.
Beginning in Bhutan, the GNH indicator has made significant progress in today's numbers-based world. Models have evolved over the last three decades that seek to quantify a country's quality of life along nine dimensions: Psychological Well-being, Time Use, Community Vitality, Culture, Health, Education, Environmental Diversity, Living Standard, and Governance.
The growing environmental challenges and the current financial crisis have put GDP's supremacy as a model for economic policy under increased strain. Of course, GNH is not a clear alternative. There are numerous hurdles that challenge the adoption of GNH worldwide, from measuring its dimensions to implementing policies that improve a nation's GNH. To keep things in perspective, Bhutan's capital Thimphu is the only capital city with no traffic lights installed. (Incidentally, the city did install traffic lights a few years back but removed them after the people complained they were too impersonal.)
I am not advocating that adopting the GNH would cure everything wrong with the world. But, it would be an important indicator to complement GDP as a measure of the effectiveness of public policy.
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