It’s no secret that Gross Domestic Product (GDP), the number that serves as a measure of economic progress around the world, hardly serves as a barometer of human flourishing.
It records, for example, the harvesting of a forest as timber revenue, without recognizing the resulting erosion and degradation of water quality. It measures spending on hospitals, but not people’s health. An authoritarian regime can perform well even though it concentrates wealth and leaves the average citizen in poverty.
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For decades, economists have tried to create an alternative metric that captures a broader picture of prosperity — one that would change the goals countries seek to achieve. Committees were formed and international institutions created indices and frameworks to assess vulnerability, well-being and natural capital.
But none of these initiatives have gained widespread acceptance. Therefore, last year, the United Nations created a commission to develop a more focused set of indicators that could finally reduce some of the attention devoted to GDP.
The result, released last month, is a panel with 31 metrics grouped into four categories: peace and human rights, sustainability, quality of life and inequality.
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Among the metrics are the share of the population that feels comfortable walking around the neighborhood at night, the share of wealth concentrated in the richest 1% and the number of conflict-related deaths per 100,000 inhabitants.
The dashboard is more concise than the hundreds of indicators that underpin the Sustainable Development Goals set by the UN in 2015. António Guterres, UN secretary-general, whose term ends this year, called the new dashboard a complement to GDP and asked delegates to adopt it in their own countries.
“The report is also a call to action: let’s measure what really matters,” he said.
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“It’s ridiculous”
Still, the proposal is far from being a simple and direct indicator like GDP — and has already received criticism.
Weeks before the proposal was released, a letter signed by 58 experts, including professors from Oxford, Cambridge, Harvard and Yale and a former president of the UN General Assembly, argued that the commission strayed from its mission by selecting too many indicators.
“It is difficult to imagine any aspect of well-being that would plausibly fall outside such a broad framework,” the letter says. The signatories, mostly linked to environmental economics, argued instead for adopting a more holistic measure of wealth, including elements such as public health and natural resources. The World Bank published the latest edition of one of these measurement systems in 2024, as a complement to GDP’s focus on income.
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Robert Smith, former director of environmental accounts at Canada’s national statistics agency and coordinator of the letter, classified the UN effort as well-intentioned, but without methodological discipline.
“That’s not going to compete with GDP,” Smith said. “Countries are going to look at this and say, ‘Let’s create our own set of indicators’ or ‘That’s ridiculous, let’s stick with GDP’.”
When the report was presented this month by the group of experts and UN authorities, a representative of an alliance of small island countries highlighted that other alternative indicators already fulfill a similar objective and are gaining ground.
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“Reopening or reproducing this work under another label would risk fragmenting efforts and diluting political momentum,” said Ilana Seid, Palau’s UN representative. Furthermore, he noted, many small countries do not have the resources to compile large volumes of data. “The proliferation of indicators brings real capacity costs and limitations,” he said.
The process also revealed disagreements over how an alternative metric would be used. Costa Rica, which was among the countries that advocated the creation of the commission, is especially interested in using an alternative measure to GDP to achieve more favorable financing conditions.
The commission’s report, however, did not state whether development institutions such as the World Bank should use this model to grant loans. A delegate speaking on behalf of Canada, Australia and New Zealand said at the launch event that his group is opposed to the idea, given the other indicators already available.
This is not Bretton Woods
Nora Lustig, an Argentine economist at El Colegio de México who specializes in inequality, understands the criticism. She said she was skeptical when the secretary-general’s office asked her to help lead the commission.
“It is not for lack of effort that we still do not have a competitor to PIB”, he said. “It’s because we couldn’t reach an agreement.”
The report is the result of concessions. Committee members came from diverse backgrounds and consulted advocates from different schools of thought on how to better measure what really matters. They tried to reduce the number of indicators, but each had strong supporters.
“If there is no peace or security, if human rights are violated and the planet disappears, there cannot be well-being,” said Lustig. “These elements are fundamental, in a sense.”
A central divergence was deciding whether there should be a panel of indicators or whether they should be aggregated into a composite index — such as GDP — that assigns weights according to the importance of each component. Lustig said he came to believe this was the right approach and is continuing his research with a group of like-minded academics.
One of the commission’s members and historic advocate of an alternative to GDP is Joseph Stiglitz, Nobel laureate and former chief economist at the World Bank.
He said he believes a dashboard is the best way forward because reducing such disparate elements of well-being to a single number would undermine the purpose of the exercise. After years of international debate, he said, a top-down solution may not be the best path.
“There needs to be a national dialogue to decide what the important things are,” Stiglitz said. “Maybe, after several countries do this, we will be able to understand which metrics really help guide public policies and mobilize citizens.”
Several countries are experimenting with dashboards. Canada has a “quality of life framework” integrated into budgetary processes and public communications.
Kari Wolanski, a member of Canada’s federal statistics agency, works with another UN commission to develop standardized social and demographic metrics. The idea is that Canada can choose different indicators than Chile, but they are all interchangeable — like Lego bricks.
“You can present this to different audiences with different brands, but produce internally logical and coherent work behind it,” Wolanski said.
But this strategy may not soon lead to the universally understood system that made GDP so powerful. Kaushik Basu, an economist at Cornell University and co-chair of the UN commission on GDP, said he worries that countries will avoid using indicators that make them look bad.
“You cannot expect a new measure to be adopted voluntarily, with all countries joining, because some win and some lose,” Basu said.
According to him, the UN should encourage its Member States to participate. GDP only gained strength because the United States imposed it at the Bretton Woods conference, at the end of the Second World War, when countries created the international financial institutions that continue to exist today.
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