Countries Need to Look Beyond GDP

When governments ask people what truly matters to them, they cite things like being healthy, having a secure and affordable home, enough income to live with dignity, and time for the people they love. As the former leaders of Iceland and Scotland, we have heard concerns first-hand. 

But these people-first priorities are not abstract ambitions. They are the conditions for a decent life, and ensuring they are met should be the first priority of any government.

And yet none of this is captured in the number that most economists, the media, and indeed, governments use to measure a country’s success: Gross Domestic Product (GDP), commonly referred to as economic “growth.”

To be sure, GDP has its uses as a measure of many of the goods and services a country exchanges and produces. But today, it is typically used in a way its architects never intended. For instance, a country’s GDP rises when a forest is felled and when an oil spill is cleaned up. It rises with financial speculation. But it does not rise when a parent cares for a child or a child for an elderly parent, when the forest is left standing, when a woman can walk home at night without fear, when voters turn out because they trust their institutions, or when a patient sees a doctor in days rather than months.

A new UN Framework, Beyond GDP, promises to change this by offering a dashboard of more meaningful indicators to complement GDP. Governments must now put this framework into action. Not simply by publishing new statistics, but by using them to set priorities, shape budgets, assess policies and be held to account publicly on whether people’s lives are genuinely improving.

Eight years ago, we set out to put the wellbeing of our people ahead of the narrow pursuit of economic growth. Together with New Zealand’s Jacinda Ardern, we founded the Wellbeing Economy Governments partnership, later joined by Wales and Finland, with Canada actively participating. We shared practical lessons about developing national wellbeing indicators, embedding them in government decision-making and ensuring that economic policy considers social and environmental outcomes alongside financial ones.

In Iceland, we introduced 39 wellbeing indicators, built on what people themselves told us they valued, and used them to inform policy. GDP became one measure among many, alongside life expectancy, unmet healthcare needs, material deprivation and work-life balance. Parental leave shows what this means in practice. We extended leave to 12 months, with six months reserved for each parent and six weeks transferable. In doing so, we recognized that care, family life, gender equality, and the economy are inseparable, and that fathers’ time with their children is worth protecting. The reform strengthened families and shifted expectations about work and who does the caring.

In Scotland, a Wellbeing Economy Monitor showed us how the economy was really performing for people, alongside a National Performance Framework of outcomes written into law and aligned with the Sustainable Development Goals. Policies followed: the doubling of early years education, a Baby Box to equalize children’s starts in life, the Scottish Child Payment to reduce child poverty directly, and Community Wealth Building to ensure public spending, land and assets create lasting value locally—an approach Scotland has since made the subject of the first national legislation of its kind anywhere in the world. 

While these efforts are still evolving and not perfect, they represent an important shift in how governments understand prosperity. Changes in economic systems take time, but progress begins by changing—and being more explicit about—what we value. Our experience taught us that measuring what matters is only the beginning: wellbeing indicators must also shape budgets, policy decisions and how governments are held accountable. Legal systems need to support this too.

We were, and we still are, far from alone in this endeavor. Bhutan, for example, has been making the argument for more than 50 years. Its Gross National Happiness framework focuses on nine different dimensions of well-being such as living standards, health, education, and ecological diversity. Last year, Malaysia introduced a bold new roadmap that embeds public health, environmental sustainability and economic resilience. The National Planetary Health Action Plan moves away from a narrow focus on economic growth to prioritize the health of people and planet, replacing the short-term idea of return on investment with a “return on values.”

It is worth noting that wellbeing economy approaches often mirror the ways many Indigenous Communities have been providing for collective needs for generations. For example, Buen Vivir—living well together—comes from the Quechua peoples of the Andes, and has been written into the constitutions of Ecuador and Bolivia since 2008. And Aotearoa New Zealand’s wellbeing budget draws on Māori understandings of intergenerational wellbeing.

These ideas are finally moving from the margins into mainstream economic policy. A landmark UN report, written by a high-level expert group appointed by the UN Secretary-General after the Pact for the Future, proposes a dashboard of 31 indicators to sit alongside GDP, with recommendations for governments, business, academia, and civil society on how to bring this agenda to life.

Earlier this year, a roadmap for eradicating poverty without relying on endless growth was launched in Geneva, developed with more than four hundred contributors from governments, trade unions, social movements, UN agencies and universities. It sets out measures that already work in different places, from social protection and care; to tax, universal basic services, and the rights of nature; to the governance of trade, debt, and finance. That work and the work on measurement are currently proceeding separately. Bringing them together would be a valuable contribution of the intergovernmental process now underway. 

The greatest risk now is a process in which governments agree in principle and move slowly in practice. New indicators alone will not be enough. The pursuit of growth at any cost is embedded far beyond the statistics: in how credit agencies rate a country’s debt, how finance ministries deem a budget responsible, and in the rarely-questioned assumption that more is always better.

What is needed is not further consensus but more early adopters: countries willing to pilot implementation and share honestly what they learn, supported by civil society, business and the UN itself.

The 2015 Sustainable Development Goals ask every country to sustain economic growth per person. As governments begin to design what will follow them, we have a chance to change the instruction and create a different approach.

After all, the responsibility of every leader is to ensure the wellbeing and safety of his or her people, and to do that, we need to go beyond GDP and think about what truly matters