You’ve probably come across the concept of Gross Domestic Product (GDP) at some point in your life. To put it briefly, this concept is a monetary measure of all final goods and services produced and sold by a country in a given time. Gross Domestic Product is one of the most used data in the macroeconomic analysis as it is a summary of economic activities covering all sectors within the country and shows how healthy the economy is. But today, I would like to talk to you about a lesser-known concept that is close to this one, also used in economics: Gross National Happiness (GNH)!

This concept was first introduced in 1972 by the words of the 4th King of Bhutan, King Jigme Singye Wangchuck, “Gross National Happiness is more important than Gross Domestic Product”. Unlike Gross Domestic Product, this concept is more spiritual and based on Buddhist values with goals such as social welfare and environmental protection. Although it is not a complete substitute for Gross Domestic Product, it is accepted as a complement.

Since then, this idea has influenced Bhutan’s economic and welfare policies and led to the creation of the Gross National Happiness Index based on the analysis of 33 indicators developed in 9 areas with Alkire-Foster’s multidimensional measurement method.

These 9 areas are Psychological Well-being (with indicators as life satisfaction, and spirituality), Health (with indicators as self-reported health status, and disability), Education (with indicators as literacy, and schooling), Time Use (with indicators as work, and sleep), Cultural Diversity and Resilience (with indicators as cultural participation, and 13 fine arts and crafts), Good Governance (with indicators as political participation, and fundamental rights), Community Vitality (with indicators as safety, and community relations), Ecological Diversity and Resilience (with indicators as wildlife damage, and urban problems), and Living Standards (with indicators as household per capita income, and housing). In the calculation of the index, while the weight of health is the highest with 13.1% out of 9 fields, education has the lowest share with 9.78%. However, the weights were distributed close to each other and the importance of each area was tried to be highlighted.

This index identifies four groups of people: unhappy, narrowly happy, extensively happy, and deeply happy and measures the nation’s well-being directly by starting with each person’s achievements in each indicator. According to the results, people’s happiness levels are measured against indicators, and then the analysis focuses on how policies can increase happiness and sufficiency among the unhappy and narrowly happy people.

According to the Gross National Happiness Index made in Bhutan in 2015, the field of education is the most competent field with a rate of 99%. This area is followed by the indicator of speaking in the mother tongue, which is in the field of cultural diversity and flexibility with a rate of 92%.

The government can change its policies according to the results on a yearly basis, or by analyzing the rate of change between different years. According to the Bhutan Gross National Happiness Indices made in 2010 and 2015, the areas that showed an improvement of more than 10% in these 5 years were services, ecological problems, and cultural participation, which indicates that the current policies are positive. However, decreases in indicators such as life satisfaction, family, and donations can bring different perspectives to managers in questioning and changing existing decisions.

It is not known how many different governments will adopt this index in the future, but it is nice to see that something can be put forward without forgetting happiness, which is one of the most basic needs of humanity in the world. Wishing for the days we live as happier people in a more sustainable world, thank you Bhutan!

Hakan Yağcı

Sources:

IMF: “Gross Domestic Product: An Economy’s All”

OPHI: “Bhutan’s Gross National Happiness Index”

Dergipark: “Gayrisafi Milli Mutluluğun Ekonomik Kalkınmadaki Rolü: Bhutan Krallığı Örneği (Gross National Happiness Role in Economic Development: Example of the Kingdom of Bhutan)”