Opening Remarks by Angel Gurría, OECD Secretary-General, High Level Expert Group on the Measurement of Economic Performance and Social Progress
15 January 2015, Paris, France
(As prepared for delivery)
Dear colleagues, Ladies and Gentlemen,
It is a great pleasure to welcome you to the OECD for the second meeting of the High Level Expert Group (HLEG).
Measuring Economic Performance and Social Progress is at the very heart of everything we do at the OECD. I am delighted that we have been able to host and to make such a substantive contribution to the work of the HLEG.
Expanding the Measurement Agenda
For us, it represents a challenge to develop better metrics that truly address the many dimensions that matter for people’s lives, and their distribution across the population.
This meant going beyond economic activity alone, and demanded that we think again about the long-term sustainability of our living standards.
The question of what to measure has never been more important than in the current context.
Seven years on from the financial crisis, and we are still dealing with its legacies: low growth is slowly picking up; unemployment, despite moving in the right direction remains stubbornly high, especially in the euro area; and income inequality, which was already rising, has worsened.
These legacies have had a profound effect, diminishing well-being and contributing to a loss of trust in governments and institutions.
We need to address both the stalled growth in well-being and the loss of trust. Measurement must play a central part in this.
The OECD is at the Forefront of Measurement
At the OECD, we have been pioneering efforts to expand the measurement of performance ‘beyond GDP’ for over a decade. From the first OECD World Forum on Statistics, Knowledge and Policy in Palermo in 2004, through the subsequent meetings in Istanbul in 2007, Busan in 2009, and New Delhi in 2012, we have been working to identify better ways to measure the progress of societies.
We shall continue to do so, up to and beyond the next OECD World Forum in Mexico this coming October.
In 2011, on the occasion of the OECD 50th Anniversary, we launched the OECD Better Life Initiative, which saw, for the first time, the publication of a set of internationally comparable indicators of well-being in the "How’s Life?" report, and the interactive Better Life Index.
This important work on measurement has given us a number of vital insights. By measuring well-being, the 2013 edition of How’s Life provided a unique glimpse into the human cost of the crisis. It showed that its impact reached far beyond the loss of jobs and income, affecting citizens’ satisfaction with their lives and their trust in governments.
The numbers are striking: between 2007 and 2012, reported average life satisfaction declined by more than 20% in Greece, 12% in Spain, and 10% in Italy.
This same report also highlighted the major influence that work has on well-being. It showed for instance, that in Europe, 50% of people who face poor work organisation and workplace relationships report that their job impairs their health, compared with only 15% among those experiencing favourable conditions.
This is very instructive for policy-making. And we are now adding to this work, with recent publications focussing on the local-level distribution of well-being in How’s Life in Your Region, and historical trends in well-being from 1820 in How Was Life?.
We should always remember that we want to measure better because ultimately we want to make better decisions! At the OECD, we have now moved beyond the measurement phase and put the notion of well-being at the heart of our New Approaches to Economic Challenges (NAEC) Initiative launched in 2012.
The NAEC Initiative recognises that restoring growth remains a priority in many countries, but stresses that growth must be both ‘inclusive’ and ‘sustainable’.
There is simply no return to a business-as-usual world where GDP growth can be taken as the only objective for policy-making. The novelty of the NAEC approach is the recognition that multiple objectives need to be considered and pursued jointly.
The new well-being metrics that you are helping to develop are being used to assess and evaluate policy trade-offs and complementarities. Such an approach allows us to improve the coherence of our analyses and policy recommendations.
At the OECD, this new state-of-mind is at the core of our policy advice. The work conducted through our Inclusive Growth Project has built upon the well-being framework, to create a monetary measure of multidimensional living standards based on household disposable income, longevity, and risk of unemployment.
This measure can be used to design practical policies that directly improve individuals’ lives.
Take the case of China, where an Inclusive Growth case study highlighted that living standards and inclusiveness are being dragged down by the impact of ambient air pollution on life expectancy. This clearly shows that pursuing measures to improve air quality would drastically benefit citizen’s well-being!
What Can the HLEG Achieve?
Colleagues, much remains to be done to implement the recommendations of the SSF’s report in full. There are many areas crucial to assessing people’s well-being that still fall beyond the scope of our accounting systems, and where adequate metrics simply do not exist.
Such gaps range from the measurement of multidimensional inequalities in health, skills, and wealth, to the quantification of the environmental, social, and institutional assets that shape the sustainability of our societies.
I know that together we are beginning to overcome those gaps. Martine Durand, our Chief Statistician, has kept me well informed about the HLEG’s work plans, as articulated at your first meeting in Paris last year, and on the discussions at your thematic workshops on measuring ‘sustainability’ in Rome, and ‘subjective well-being’ in Turin.
I look forward to learning more about your rich discussions on measuring ‘intergenerational equity’ held yesterday in Paris, and the forthcoming debate on ‘income and wealth inequalities’ next July in Berlin.
The link between better measures and better policies, is really the key to this work, and it will be the focus of the 5th OECD World Forum on Statistics, Knowledge and Policy, which as I mentioned earlier will be held in Mexico in October this year. I hope to see you there.
This work will result in better measurements that improve policy design. The four priority areas set for your forthcoming work - 1) income and wealth inequality; 2) global and multidimensional inequalities; 3) subjective well-being; and 4) sustainability – are at the top of the global policy agenda.
By focussing on these issues, the recommendations in the 2016 HLEG report will provide policymakers with more relevant measurement tools to assess the effects of policy on areas that matter for people’s lives.
I can assure you, this will help to guide future OECD work and feed into better policymaking across the board.
Ladies and Gentlemen,
Your agenda and the OECD’s are very well aligned. Hosting the HLEG represents a great opportunity for the OECD to draw on the world's best guidance and expertise to support us in our endeavours.
I am confident that together we can keep the momentum going and ensure the development of better measurement tools that lead to better policy design and, ultimately, better lives.