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Does happiness amount to economic growth?

Does happiness amount to economic growth?

By Lilian Kaivilu

@liliankaivilu

In the recent World Happiness Report, Norway was ranked the happiest country in the world. Kenya came position 112. While many people may want to base the happiness of a country on the social wellbeing and security of the people, the report shows otherwise; by ranking Somalia at position 93, above Kenya. The former has experienced numerous instances of insecurity from attacks by terror groups.

But Allen Dennis, Senior Worldbank economist argues that what makes one individual happy may not necessarily be the case for another. “What Kenyans could consider to make them happy could be different from what Ugandans or Norwegians consider as a source of happiness,” says Dennis.

But in some instances, a government may implement some strategies, not directly referring to happiness, but with the end goal to improve the wellbeing of its people. In the case of Kenya, for example, under Vision 2030, Kenya envisions to reach upper middle class and have its citizens live a good quality life.. This, Allen says is perhaps one of the ways that the government would want to make its people happy. “Here, the government does not use the term happiness but it looks at the welfare of its citizens through a broad strategy of Vision 2030,” he explains.

 

Dr Julius Muia, Director General of Kenya Vision 2030 Delivery Secretariat gives insights on what it would take a country to adopt Happiness Index, as opposed to Gross Domestic Product, as a measure of economic growth and development…

In the case of Kenya, how feasible is it to use Happiness Index as a measure of economic growth?

My view is that the Happiness Index is not conceptually designed and should not be applied to measure of economic growth. On the one hand, the Happiness Index measure measures a desired final outcome of public policy, that is how the feeling of a citizens (how happy they are and their general wellbeing-which could be depicted by their health).

On the other hand, economic growth is an indirect indicator of the state of citizens since, economic growth connotes an ability of an economy to produce goods and services that citizens consume. The problem with this metric is that it assumes that people only care about consumption of monetized goods.

Dr Julius Muia Director General (DG) of the Kenya Vision 2030 Delivery Secretariat

Dr Julius Muia Director General (DG) of the Kenya Vision 2030 Delivery Secretariat

If Kenya was to adopt this, how would it affect government way of planning? Will this mean channeling funds to different sectors?

Adoption of the Happiness Index by the Kenya government would result in substantial policy, strategic, funding and tactical changes to focus on the main attributes of the Happiness Index: How people care for one another, citizens’ freedom, generosity, honesty, income and good governance, healthy life expectancy. New measures of these attributes would have to be greed to enable calibration of development plans and outcomes using the agreed metrics. Thus, instead of the annual economic survey, the government may have to produce “Happiness Annual Survey of Kenya” –HASK. Programming and budgeting would move away from the traditional sectors which are designed on the premises of production of goods and services to a broader log-frame structure that focuses on the outcomes of the budget spending. Naturally, economic productivity would not be a key focus.

What would it take a government to move from GDP to Happiness Index as a measure of economic growth?

The GDP measure of economic activity is premised on the fact that economic growth is necessary for prosperity of mankind. Over the years, economists have popularized and socialized the GDP and per capita income as a measure of growth. To change this and replace it with Happiness Index requires a lot of academic debate and political push to create the required momentum for change especially among the international institutions: United Nations, World Bank, IMF and regional bodies.

Why would a country implement such an economic policy shift?

For a country to have a policy shift from measuring prosperity/growth through economic indices such as GDP and GDP per capita to Happiness Index requires a clear determination to focus on outcomes/end beneficiaries of public policy rather than intermediate facilitators of outcomes. In this line of thought the welfare of the citizens is deemed to be the desired outcomes of government policy whereas increased productivity through economic growth is deemed to be an enabler of the provision of improved societal welfare.

Are there possible challenges or dangers of adopting such a strategy?

Obviously, such a drastic policy change is fraught with challenges. The re-orientation of strategies, sub-strategies, plans, systems and finances to focus on the happiness attributes would take time, effort and resources. One of the biggest challenge is the mere acceptance of change both by the implementers, citizens and other stakeholders within and without. Acceptance and buy-in of the change by the international institutions, scholars and opinion leaders would be helpful

Is this way of measuring economic growth easier to implement in countries governed by Kingdoms?

Clearly, jurisdictions that have a totalitarian rule or something close to that would find it easier to implement such a policy change. However, this is a matter of relativity because in today’s world all communities are interlinked with the international world courtesy of an enabling technology that has bequeathed on us the global village. In a sense, no community is an island, except for the rainforest dwellers: the Pygmy tribe of the Congo forest; the Huli tribe of Papua New Guinea and the Yanomami tribe Northern Brazil and Southern Venezuela.

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