In simple terms, GDP is the sum of everything a country produces and sells, but economists have known for years that it fails to represent the complete picture.
For example, unpaid work, such as childcare or disabled family workers, is not counted as positive. Measures of inequality are not taken into account, nor the cost of pollution or the exploitation of resources.
This is problematic as it creates the wrong incentives and objectives for policymaking. By pursuing GDP growth alone, policymakers may not be pursuing what matters most for people and the planet.
Telling what counts
The lack of more nuanced metrics to capture progress has long been on the international community’s radar, and was picked up a year ago, when Secretary-General António Guterres launched his High-level expert group on beyond GDP.
After a year of consultations, the group has published its conclusions through a report titled, Telling what countsdescribed as “a compass for people and the planet.”
It offers the UN’s first global plan to move beyond the limited metric of GDP and makes a compelling case for using a broader set of measures to guide policy and decision-making.
Beyond GDP it’s about finding new ways to measure progress
He does not argue against using GDP to measure economic output, but cites a warning from the metric’s pioneering economist – Nobel laureate Simon Kuznets – that, on its own, it is insufficient to measure a nation’s well-being.
In his speech launching the report on Thursday, UN Secretary-General António Guterres argued that GDP is being used in ways its architects never intended: “We use GDP to judge the long-term success of countries,” he said, “but we see a huge gap between what GDP measures and what people value. GDP has become our reference tool for international policy rules. But it does not effectively distinguish the vulnerabilities, challenges or potential that different countries face.”
Guterres also pointed to the growing prevalence of AI as a demonstration of the need for more nuanced metrics. “AI has the potential to dramatically boost global growth and productivity, but it can also eliminate millions of jobs and trigger the creation and use of increasingly sophisticated lethal weapons. Surely we should not judge the merit of this technology solely by its effect on GDP..
Drawing on decades of research, as well as numerous national and international attempts to find better ways to measure progress, the group offers a practical agenda that will enable governments and the international system to reduce over-reliance on GDP when it is not the right measure.
The centerpiece of the group’s report is a dashboard of indicators based on four pillars: fundamental principles (including peace, human rights and respect for the planet), current well-being, equity and inclusion, and sustainability and resilience..
Next steps
While the expert group does not propose an alternative to GDP that ranks countries in order, they recommend the development of a limited set of leading indicators to communicate progress more clearly to policymakers and the public.
The report includes practical steps to advance the Beyond GDP agenda, such as the rapid adoption of national “progress dashboards”, tailored to national priorities and integrated into policy-making processes.
A UN global reporting mechanism is also proposed, including an annual progress report aligned with the monitoring of the Sustainable Development Goals (SDGs), while academia, civil society, the private sector and the media are encouraged to contribute through research, reporting and substantive commitment to change the narrative and hold leaders accountable on measures of progress beyond GDP.
“Let us embrace these new metrics that complement GDP,” Guterres concluded, “and reveal the full picture of the challenges and opportunities facing our world at this extraordinary moment in history.”