Wellbeing budget

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Wellbeing Budget Process New Zealand.png

A wellbeing budget is a budget that uses not only financial indicators such as gross domestic product (GDP) to measure the performance of a welfare state , but also ecological and social indicators . The wellbeing budget thus also takes into account the wellbeing and quality of life of the population.

background

When the metric of GDP emerged in the first half of the 20th century, the economist Simon Kuznets , who was involved in the development of the metric, pointed out that the main purpose of GDP was to measure economic growth. However, GDP should not be equated with social well-being, as it does not take into account income inequalities or the social or environmental costs of growth.

Recognizing the inadequacy of GDP, a movement has emerged to develop measures of social welfare that exceed GDP. This measure should represent the quality of life of a society more comprehensively. This movement received prominent support from the Stiglitz-Sen-Fitoussi Commission , which was set up in 2008 by the French President Nicolas Sarkozy . This commission of experts submitted a report to Sarkozy in 2009 that contained twelve recommendations for measuring prosperity taking into account economic, social and ecological factors.

Since 2011, these considerations have been further developed into a framework under the aegis of the OECD . The OECD now regularly reports data on social well-being as part of its “Better Life Initiative”, which is summarized by the Better Life Index . In a 2018 report entitled “Beyond GDP”, the OECD highlighted the progress made over the past decade in collecting and using data on social well-being by policy-makers. An OECD report entitled “Accelerating Climate Action”, published in 2019, addresses the question of how climate protection measures can be accelerated by systematically placing social well-being at the center of political decision-making processes. One approach is CO 2 taxation, as described in a report by the "High level commission on carbon price" under the direction of Joseph Stiglitz and Nicholas Stern for the attention of the World Bank.

Demarcation

In contrast to the use of individual prosperity indicators such as jobs, income, educational qualifications or health, which are already taken into account individually in politics, a wellbeing budget integrates such indicators in a holistic concept. This approach has the advantage that the budget can be strategically aligned across different areas of government. This reduces the risk that government agencies only consider areas for which they are directly responsible. A holistic concept of the objectives to be taken into account can promote cooperation, consistency and coherence between government agencies. This framework should ideally enable planning security with regard to future developments. In addition, the framework allows governments to examine whether today's prosperity is being achieved at the expense of the prosperity of future generations. Another important aspect of the wellbeing budget is the measurement of the effectiveness of the measures used to achieve the goals. A process with feedback loops, policy adjustment and refinement is to be developed in which the measures are continuously adapted in order to come closer to achieving the goals. After all, a wellbeing budget should be the subject of ongoing public debate. The inclusion of all those involved and affected - such as civil society, companies and political decision-makers - should make it possible to find a broad-based consensus on which goals a society sets itself.

Mechanisms

The provision of detailed information about the indicators included is a first step towards improving the well-being of society as a whole. In a further step, formal mechanisms have to be developed to ensure that the indicators are integrated into the political processes. Several OECD countries have already taken appropriate measures. While in some countries such as B. France, Italy and Sweden, the indicators are initially relevant in setting the political agenda, in other countries such as. B. New Zealand or Ecuador also used in policy-making. In some cases the development of a welfare policy rests with the legislature , in other cases the executive is responsible. The latter is z. This is the case in New Zealand, for example, where the Treasury Department is responsible for the wellbeing budget.

Challenges

Challenges in implementing the wellbeing budget include, for example, a lack of consensus in the selection of indicators or institutional resistance to change. Poor communication with relevant interest groups and structural barriers could hinder integration. In addition, it is difficult to methodically prove the effect of the indicators, since the optimal test conditions for the determination of cause and effect often cannot be established. If these can be produced, they often cost a lot of time and money.

Examples

Various countries have joined the OECD's "Better Lifes Initiative" and have started to systematically measure social wellbeing. These include Australia , Belgium , Germany , Ecuador , Finland , Israel , Italy , Japan , Luxembourg , the Netherlands , Austria , Scotland , Slovenia , the United Kingdom and Wales . However, these countries are at different stages of development of a wellbeing budget. Several countries, including Germany, France , Israel, Italy, New Zealand and the United Kingdom, have carried out public consultations for the development of their welfare indicators, in which the population has been involved. Sweden has developed a concept that is based on the UN's 2030 Agenda .

New Zealand

New Zealand Wellbeing Budget 2019 priorities

The government of New Zealand , chaired by Jacinda Ardern , presented the world's first wellbeing budget in May 2019. This was already prepared under the former Secretary of the Treasury, John Whitehead, and is based on the idea that complex problems such as child poverty, inequality and climate change can only be solved if one looks beyond economic growth and takes into account the social and environmental effects of economic activities. The following processes were integrated into the budget process. Measures achieved: 1. Cross-agency work to evaluate, develop and implement guidelines to improve well-being. 2. Focus on factors that meet the needs of today's generations while also considering the long-term effects on future generations. 3. Tracking progress with more comprehensive measurement tools; Account is taken of the health of finances, natural resources and people. The 2019 budget set the following priorities: 1. Mental health, 2. Wellbeing of children, 3. Improving the prospects of the Māori and Pasifika communities, 4. Improving productivity through digital, social and economic innovations, 5. Transition to a sustainable and low carbon economy, 6. Investing in New Zealand.

Sweden

In Sweden , the Statistical Office prepared a report with possible wellbeing indicators in 2016. A budget has been in use since 2017 that includes 15 wellbeing indicators that are related to the UN's 2030 Agenda . The budget includes the following five economic indicators: GDP per capita, employment rate , unemployment , household debt , and national debt ratio . It also includes the following five ecological indicators: air quality, water quality, nature conservation (national parks and nature reserves), exposure to chemicals, greenhouse gas emissions. Finally, it contains the following five social indicators: poverty rate , self-assessment of general health, level of education, interpersonal trust, life satisfaction.

The development of this budget is a signal from the Swedish government to the authorities to include the indicators in key policy-making processes. The indicators are integrated in particular through the following measures: 1. Monitoring social, ecological and economic development, 2. Providing data bases for political decisions, 3. Evaluation of reforms, 4. Additional performance indicators of the annual budget. These measures make it possible to align the budget process with the results of these 15 indicators from the previous year and, if desired, to make budget adjustments.

Iceland

In December 2019, the Icelandic government announced that it wanted to introduce a new concept of welfare measurement. The Prime Minister of Iceland, Katrin Jakobsdottir , calls for social indicators to be taken into account alongside previous indicators for growth and prosperity such as gross domestic product. According to Jakobsdottir, environmental degradation is a key factor driving Iceland to include new indicators in its budget planning.

Individual evidence

  1. ^ Treasury of New Zealand: Wellbeing Budget. Retrieved June 30, 2019 .
  2. ^ Robert Constanza, Ida Kubiszewski, Enrico Giovannini, Hunter Lovins, Jacqueline McGlade, Kate E. Pickett: Time to leave GDP behind . In: Nature . tape 5 0 5 , p. 283-285 ( nature.com [PDF]).
  3. ↑ a b c d e f Carrie Exton, Michal Shinwell: Policy use of well-being metrics: Describing countries' experiences . In: OECD (Ed.): SDD WORKING PAPER . No. 94 , November 6, 2018 ( oecd-ilibrary.org ).
  4. ^ Joseph E. Stiglitz, Amartya Sen, Jean-Paul Fitoussi: Report by the Commission on the Measurement of Economic Performance and Social Progress . Ed .: Commission on the Measurement of Economic Performance and Social Progress. 2009 ( europa.eu ).
  5. ↑ OECD: How's Life? Measuring well-being. Retrieved July 2, 2019 .
  6. ↑ OECD: Beyond GDP. Retrieved July 2, 2019 .
  7. ^ Secretary-General of the OECD: Accelerating Climate Action: Refocusing Policies through a Well-being Lens . Ed .: OECD. 2019 ( oecd.org ).
  8. ^ Carbon Pricing Leadership Coalition: Report of the High-Level Commission on Carbon Prices . Ed .: International Bank for Reconstruction and Development and International Development Association / The World Bank. 2017 ( squarespace.com [PDF]).
  9. ^ Joseph Stiglitz: Fighting the climate crisis need not mean halting economic growth. In: The Guardian. December 9, 2019, accessed December 14, 2019 .
  10. ^ Australian Bureau of Statistics: Measures of Australia's Progress. Retrieved July 3, 2019 .
  11. ^ Federal Planning Bureau, within the framework of the National Accounts Institute: Sustainable development indicators. Retrieved July 3, 2019 .
  12. ^ The Federal Government: Gut Leben in Deutschland. Retrieved July 3, 2019 .
  13. ↑ Statistics Finland and the Prime Minister's Office: Findicator. Retrieved July 3, 2019 .
  14. ^ Israel Ministry of Environmental Protection: Well-Being, Sustainability, and National Reslience Indicators. Retrieved July 3, 2019 .
  15. ^ National Institute of Statistics (ISTAT): Equitable and sustainable well-being in Italy. Retrieved July 3, 2019 .
  16. ↑ Japan for Sustainability: Creating Well-being Indicators of Japan, by Japan, for Japan. Retrieved July 3, 2019 .
  17. ↑ Statec (the National Statistics and Economic Studies Institute), the Economic and Social Council, and the Higher Council for Sustainable Development: Le PIBien-être la mesure qualité de vie au Luxembourg. Retrieved July 3, 2019 .
  18. ^ Central Bureau of Statistics: CBS to compile a Monitor of well-being. Retrieved July 3, 2019 .
  19. ↑ Statistics Austria: How's Austria. Retrieved July 3, 2019 .
  20. ^ Scottish Government: National Performance Framework. Retrieved July 3, 2019 .
  21. ^ Institute of Macroeconomic Analysis and Development (IMAD), Statistics Slovenia (SURS), the Slovenian Environment Agency (ARSO), National Institute of Public Health (NIJZ): Indicators of Well-Being in Slovenia. Retrieved July 3, 2019 .
  22. ^ The UK Office for National Statistics: Measuring National Wellbeing (MNW) program. Retrieved July 3, 2019 .
  23. ^ Welsh Government's Chief Statistician: Well-being of Wales. Retrieved July 3, 2019 .
  24. ^ The Federal Government: Germany in Dialogue. Retrieved July 3, 2019 .
  25. ^ The New Zealand Treasury: Public sustainable development workshop summary. Retrieved July 3, 2019 .
  26. ^ Swiss radio and television (SRF): New budget: Ardern wants to make New Zealand greener and fairer. Retrieved September 2, 2019 .
  27. ↑ Global Government Forum: World's first 'wellbeing budget' broadens focus from GDP. Retrieved June 30, 2019 .
  28. ^ Treasury of New Zealand: What is Wellbeing? Retrieved September 3, 2019 .
  29. ^ Treasury of New Zealand: Taking mental health seriously. Retrieved September 3, 2019 .
  30. ^ Treasury of New Zealand: Improving child wellbeing. Retrieved September 3, 2019 .
  31. ^ Treasury of New Zealand: Supporting Māori and Pasifika aspirations. Retrieved September 3, 2019 .
  32. ^ Treasury of New Zealand: Building a productive nation. Retrieved September 3, 2019 .
  33. ^ Treasury of New Zealand: Transforming the economy. Retrieved September 3, 2019 .
  34. ^ Treasury of New Zealand: Investing in New Zealand. Retrieved September 3, 2019 .
  35. ↑ Statistics Sweden: Indicator om hållbar utveckling och livskvalitet till budgetarbetet . 2016 ( scb.se [PDF]).
  36. ^ Government Offices of Sweden: New measures of wellbeing. Retrieved September 3, 2019 (se).
  37. ↑ Jon Mettler: Money? Luck? Or both? A woman is rethinking the economy. In: Tagesanzeiger. December 6, 2019, accessed December 14, 2019 .