Gross National Happiness And Macro Indicators In Bhutan

A lot of people have heard, one way or another, that the country of Bhutan decided back in the early 1970s to pursue Gross National Happiness. The King at that time is supposed to have said: “Gross National Happiness is more important than Gross Domestic Product.” But in practical terms, what does that actually mean? Sriram Balasubramanian and Paul Cashin describe "Gross National Happiness and Macroeconomic Indicators in the Kingdom of Bhutan" in IMF Working Paper WP/19/15 (January 2019). They write:

"In this context, this paper will look at the relationship between the evolution of GNH and the evolution of GDP and other macroeconomic indicators. ... Using the case of Bhutan, this paper will examine the relationship between GDP growth and happiness (or well-being), using subjective well-being measures such as surveys of nationally-representative samples of the population (such as the GNH Surveys). That is, we will examine whether GDP growth is a useful proxy for and conduit to happiness, and whether happiness-driven policies can help raise economic growth rates."

At present, the working definition of Gross National Happiness in Bhutan involves four "pillars:" Sustainable and Equitable Social and Economic Development, Preservation and Promotion of Culture Conservation of the Environment, and Good Governance. These in turn divided into nine "domains," which are then divided into 33 "indicators," which are measured by 124 variables, each with their own weights.  For a rough sense, here are the nine "domains" and what they are meant to cover.

Although the idea of Gross National Happiness has often been invoked in Bhutan since the 1970s, attempts to measure it with 124 indicators are more recent, and in fact have only been done indirectly are in 2008, 2010, and 2015. The authors explain: "To measure GNH, a profile is created for each person showing in which of 33 grouped indicators (formed from the abovementioned 124 indicator variables) the person has achieved sufficiency. As noted by the Gross National Happiness Commission (2015), not all people need to be sufficient in each of the 124 variables to be happy. Accordingly, in tabulating the Survey results the Commission divides Bhutanese into four groups depending on their degree of happiness, using three cutoffs: 50%, 66%, and 77%."

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