A policy formula for well-being
Dennis J. Snower, president of the Global Solutions Initiative, proposes a three-point agenda for integrating well-being indicators in policy development
No policymaker would dispute that ultimately the goal of all policies must be the promotion of human well-being. If policies do not serve well-being, directly or indirectly, how can they be justified?
Despite the self-evident nature of this proposition, it is an extraordinary fact of economic, business and political life that most policies are not rationalised with reference to well-being. Mainstream economics assumes that economic decisions can be explained through the goals of purely self-interested, consumption-oriented agents. Mainstream business pursues the maximisation of profits and shareholder value, without regard to whether such objectives are likely to promote well-being. Mainstream politics is divided into silos, each with its distinct goals: central banks fight inflation and stabilise financial markets; fiscal authorities focus on stimulating economic growth, overseeing the distribution of income and providing public goods; environmental authorities limit environmental degradation and regulate resource use; labour authorities promote employment and training; and so on. Hardly ever are these goals evaluated together in terms of their joint effects on well-being.
Such is the division of responsibilities and specialisation within academic disciplines, business management and politics, that these domains have developed goals that have become untethered from the ultimate objective of promoting human well-being. Thus the aim of recoupling economies, business and politics with social prosperity – thriving individuals in thriving communities – is both important and challenging.
THE APPROACH
No policymaker would dispute that, in the pursuit of human well-being, multilateral policies must be consistent with, and complementary to, national policies. Nevertheless, it is not uncommon for national policies to be formulated independently of multilateral policies, in terms of policy objectives, criteria of success, political participation, institutional processes and target groups. It is increasingly common for nationalism to be portrayed as being opposed to multilateralism. National policies are often pursued via political ideologies, with little regard to whether and how these ideologies serve human well-being. Multilateral policies are often expressed in terms of cosmopolitan principles that are not shared by national policies. This conflict between nationalism and multilateralism points to the significant failing of both.
The G20 has a special responsibility in refocusing policy at all levels on well-being. The G20 allows both for the exchange of ideas by heads of state and government, meetings by expert groups, and engagement with civil societies. It is thus in a strong position to influence global social norms and encourage their implementation through political decision makers. This is not how the G20 conceived its role in its first two decades. Since G20 finance ministers and central bankers began meeting in 1999, they focused primarily on economic goals. This focus was appropriate as long as the non-economic sources of well-being were largely assured while the economic sources were not. The focus on expansionary monetary and fiscal policies in the aftermath of the financial crisis of 2008 is a good example. Here the major dangers to human well-being arose from the threat of global depression, as in the 1930s. By acting in unison to prevent this outcome, now also at the leaders’ level, the G20 undoubtedly made a substantial contribution to global well-being.
NEW CRISES
Today, the world faces a climate crisis, a natural resource crisis and a crisis of social fragmentation, in addition to various economic threats. Under these circumstances, the exclusive focus on economic goals is indefensible.
Germany’s Hamburg Summit in 2017 specified objectives that extended well beyond the traditional economic ones. Argentina’s Buenos Aires Summit in 2018 did so too. In addition to promoting growth, trade and financial stability, environmental and social goals were articulated. Japan’s Osaka Summit aims at such a well-being–oriented agenda as well, with its emphasis on universal health, support for small and medium-sized enterprises (and thereby local communities), and quality infrastructure that promotes economic growth as well as environmental and social regeneration.
For such an agenda to be successful, it is necessary to develop, first, a small number of key well-being indicators, in addition to the standard economic ones. Current indicators – such as the 17 Sustainable Development Goals – are too numerous, ambiguous and divorced from well-being to be sufficient guides for policy. Rather, the indicators must be simple enough to be incorporated into simple narratives, which serve to communicate G20 goals to the public and to align the policies of different G20 members in pursuit of common purposes.
Second, the G20 must encourage its members to incorporate these well-being indicators into the standard reporting of government and business performance and, third, the G20 must identify best-practice policies to achieve success with regard to these indicators.
