This UN Economist Network Working Paper suggests that what could be most helpful in achieving this transformational outcome would be for governments to clearly segment the three key dimensions of this measurement challenge (productive output, material living standards and other, non-material and/or subjective markers of well-being), reporting on all three in an internationally standardized baseline fashion while encompassing the first two in a new headline measure of economic progress: Gross National Sustainable Development. GNSD would pair or integrate productive output (GDP) with a new Multidimensional Living Standards Index (MLSI) that provided an internationally standardized view of economic progress from the other end of the telescope, i.e., from the perspective of the material lived experience of people (median household living standards).
The paper provides a detailed illustration of both new constructs and is meant as a fundamental reflection—in some ways a return to first principles—on how the overall Beyond GDP endeavor might be structured to achieve maximum behavioral impact in the highest economic policymaking councils of governments and international organizations, while making far more transparent the pace of countries’ “progressive realization” of universal economic and social human rights under the International Covenant for Economic, Social and Cultural Rights signed by 170+ countries.
We conclude with an analysis of how such a more complete and balanced headline measure of economic progress could enable better policy debates and decisions on some of the biggest economic challenges facing countries in the 21st century. These include artificial intelligence, which is likely to boost productivity and national income but aggravate inequality other things being equal, as well as climate change, population aging and the fragmentation of the international trading system. Each of the latter three appear poised in its own way to constrain the quantity of economic growth in many countries in the years to come, making it more important than ever for their governments to prioritize policies that improve the social quality of their growth, i.e., the extent to which its process and benefits are diffused widely in the material lived experience of people in the dimensions spotlighted by the new Index.