Posted at 11.27.2018
Topic chosen: Some countries are taking Gross National Happiness (GNH) as a development indicator rather than Gross National Product (GNP). Proponents of GNH argue that GNH is simple to measure which is an improved measure than GNP. Do you really agree with this view? Explain your views with evidence from at least one developing country and show whether using GNH has helped or hindered development policies of this country.
Gross National Product (GNP) and Gross National Happiness (GNH) are both development indicators to measure economic activity and performance of a particular country. Many argue that GNH is an improved measure than GNP and vice versa. Many say GNP is a more accurate way of measuring the actual economic development. By the end of your day, which is the better measure for indicating economic growth and helping development policies? As poor conditions of individuals are less inclined to be found out using GNP, GNH serves as a well-being measure and only as a supplement for GNP which leaves human happiness outside its spectrum and implicitly let's assume that material development is positively correlated to human well-being.
GNP and GNH are rooted in very different views and the making up of GNP figures can be misleading. GNP measures the market value of the products and services produced by labour and property annually by the citizens of a specific country. GNP is the standard way of measuring a nation's economic performance and governments want to see it grow each year. It is basically the Gross Domestic Product (GDP) plus residents' income earned oversea minus the income earned by foreigners within the domestic economy. In modern time, most countries use GNP to calculate their performance and the living standards of the citizens each year. It generally does not calculate both qualitative improvements and quantitative increases in goods. For instance, building a bridge would donate to the GNP, taking down the same bridge due to unsafe issues would also donate to the GNP, re-building the bridge would again soon add up to the GNP. GNP growth can merely be number of mistakes made in economical activities. Thus, the GNP measures would opt out some of the significant negative effect on the growth on the social status of the individuals.
The Gini coefficient will alleviate the inaccuracy of GNP by measuring the unequal distribution of income or wealth of a country. The Gini coefficient is defined based on the Lorenz curve, which plots the income on the y-axis and the percentage of the populace cumulatively earned on the x-axis. The Gini coefficient ranges from 0 to 1 1. With 0 corresponding to complete equality, a low Gini coefficient indicates a far more equal distribution, while higher Gini coefficients indicate more unequal distribution.
GNP is an index that has flaws as it classifies some social negatives as strengths hence GNH serves as a good supplement to also improve the accuracy of GNP. The social negatives such as illness, crimes and imprisonment count toward GNP. These are types of increases in GNP that are not necessarily good. It does not cover services that enhance happiness, social well-being and other intangible elements. Despite some of the flaws GNP has, GNP remains one of the very most trusted measures for assessing each economy's performance. As an professional economy continues growing, the GNP and its overall impact little by little decreases. Industrial economies will lead to inefficient use of resources that causes high degrees of disruptions that cause unhappiness. GNP rises when we spend more money on lawyers to sue one another. GNP goes up when crime rises, so we hire more policemen and upgrade security locks. Those ideas above are not improvments and are actually harmful to the society. We may spend 100 million sterling pounds on the fighter plane for our national defence. In other words, not every upsurge in GNP necessarily translates into us being better off socially. GNH, on the other hand, serves as an extremely well-rounded measure including the nation's emotional and mental health. It measures social development by calculating the seven development areas.
GNH is socially better than GNP but it can only serve as a supplement economically to measure a nation's growth. Only one out of seven development areas is directly related to economics. The most recent seven development areas are (1) Economic Wellness, (2) Environmental Wellness, (3) Physical Wellness, (4) Mental Wellness, (5) Workplace Wellness, (6) Social Wellness, and (7) Political Wellness. Economic Wellness indicates measurement of consumer debt, average income to consumer price index ratio and income distribution. Environmental Wellness indicates measurement of pollution, noise and traffic. Physical Wellness indicates measurement of severe illnesses. Mental Wellness indicates measurements of use of antidepressant and rise or decline of psychotherapy patients. Workplace Wellness indicates measurement of job change, jobless claims, and workplace lawsuits. Social Wellness indicates measurement of discrimination, safety, divorce rates, public lawsuits, and crime rates. Political Wellness indicates measurement of quality of local democracy, individual freedom, and foreign conflicts. GNH tells us hardly any using non-economic figures and the accuracy of GNH is also being challenged.
GNH and its nature imply its reported happiness is subjective and it is difficult to compare one person's happiness with another. It could be especially difficult to compare happiness across cultures. Many "happiness" economists, however, think that they can solve this issue by also measuring objectives. The accuracy and reliability of people's responses to happiness surveys have always been a concern. Objectives measures such as lifespan, income and education should be utilized as well as or rather than subjectively happiness. The original and appropriate financial indicators are to be predicated on money. While GNP is based on quantifiable data, GNH shouldn't incorporate just as much intangible values that there is no clear-cut definition or measurement at present. GNH is dependant on life, which is much more technical to measure. Since life, and specially the subjective inner life, is non-quantifiable. This leads someone to conclude that GNP is important in the economy because it provides reliable numbers predicated on money.
GNH is intended to be an indicator to gauge the well-being in our society in conditions of economical growth but it's been failed to give convincible monetary figures. The data of the populace are aggregated to calculate the GNH Index. The Adjusted Headcount measure is to multiply H and A, where H is the headcount and represents the percentage of folks who've not achieved sufficiency. A is the common where people do not achieve sufficiency. GNH=1-HA. It measures the quality of life and social progress. The four key-strategies as four pillars for GNH are (1) sustainable and equitable socio-economic development, (2) promotion of good governance, (3) conservation of environment, and (4) preservation and promotion of culture. Only 1 out of the GNH four pillars is strategised for financial development.
Geographic locations of the citizens of a particular country will vary and can cause inaccuracy in measuring GNH of that country. In contrast, GDP is the sum of most output produced by the monetary activities within a country. GNP is GDP plus net gain from overseas. In contrast with the difference between GDP and GNP, GDH is the sum of all happiness of the folks inside a country. Maybe it's argued that GNH should exclude the times spent from the country by any citizen, those days their happiness is produced outside of the united states. Thus, GNH is GDH plus happiness generated abroad and brought into the country by residents. Any changes in happiness degrees of visitors throughout their visit should be eliminated as well. The procedure would be distributing questionnaires at the airport upon arrival and collected on departure. Obviously, this is more technical and difficult to quantify with the exactness of numbers.
GNH is a guiding principle for the introduction of Bhutanese society and economy hence it would not be compatible to quantify how other countries have progressed. GNH is actually the basic tenets of Vajrayana Buddhism, which embraces harmony and compassion. For GNH to survive as a recognized development measurement, its proponents need to respond and anticipate to lots of key challenges. Happiness is purely psychological, and therefore is not an appropriate concept in development. It really is of limited range only and it can only just fall and rise. Development is a concept that ranges from zero to infinite and it can increase year by year. Even after a substantial increase in happiness (for example, the ecstasy caused by a pay-rise) the happiness level will little by little go back down towards average. Even though GNH was theoretically a sound option to HDI, happiness is a subjective concept which is of no use used and cannot effectively be measured. GNH may be befitting the special case of Bhutan, a small Buddhist Kingdom, but can't be put on other countries. It is evident that culture and history also play a substantial role in the amount of happiness.
GNH affiliates with and help development policies deeply. One plausible assumption would be that Bhutan's poverty reduction was based on a subset of the GNH's elements such as living standard, health, and education. Each of these elements is an insurance plan goal and an advance in poverty reduction, which would also advance GNH. The one of few difficulties is that many poverty alleviation strategies have failed because they have not taken the cultural characteristics of any community into consideration. Secondly, a advance in living standard, health, and education could result in a very significant decline in community vitality, culture, or psychological well-being. In that case, advance in poverty alleviation could lead to GNH reduction. Thirdly, the measurement of poverty should mirror the GNH strategies, simply set a lesser poverty threshold in each element. In this way any changes in any of the GNH elements would be tracked alongside changes in poverty outcomes. Including psychological well-being, culture, and community vitality would not obscure advances from poverty alleviation because they are likely to be rather stable.
A variety of key development indicators are compiled into an individual measure, Human Development Index (HDI), therefore GNH is no longer needed and only can serve as an unimportant supplement. Ideas similar to GNH have been around for a long time but they haven't managed to get into mainstream. HDI has become a much-used tool. It is utilized to categorise countries into high, medium, and low human development. It really is more accurate economically because it uses less intangible figures such as cultural wellness and focuses more on quantitative aspects of development such as on GNP and number of schools. The five objectives to attain the goals of GNH are human development, culture and heritage, balanced and equitable development, good governance, and environmental conservation. For GNH to be successfully operationised, it needs to be clearly defined in such a form that it can be understood and used both in Bhutan and beyond its borders. To be valued alternatively concept, there has to be a specific distinction between GNH and other development indicators like the HDI. The status of GNH in a country must be measurable and then measured. There seems to be a big doubt that Gross National Happiness has the potential to meet all the above requirements. Indeed, that once they are met, GNH may turn out to be not only as good as HDI as a measure of development. You can develop a wide range of genuinely needs-based development assistance carefully targeted to a specific beneficiary group, yet at the same time have a universal measuring stick of GNH. For instance, Country A seeks to improve its GNH score by 5% by building temples, and Country B can shoot for the same growth in GNH by supporting healthcare programmes for villagers. Government can spend money only to preserve the culture. Measuring happiness is still a young science even though the statistics are beyond refute. There is absolutely no society that completely meets these tangible requirements of GNH. Without question, GNH requires low infant and child morality, universal access to heath care, a higher degree of literacy, and usage of gainful employment. The U. S, as a well-developed nation, fails to provide universal healthcare, disparity of income, harmony with nature, and balance in life between financial and other pursuits.
GNH will not detect economical growth for nations that are relatively better off. Although on average richer nations tend to be happier nations than poorer nations, Bruno S. Frey and Alois Stutzer stated that studies have shown that beyond the average GDP or GNP per capita of approximately $15, 000 (9226. 50), the common income in a nation makes little difference to the average self-reported happiness. Therefore, happiness measures could be used not as an upgraded for traditional measures but only as a supplement. GNH does not show monetary growth of some developing countries. According to the World Values Survey, some countries were happier than they should be. For instance, Latin American countries are subjectively notably happier than their monetary status indicate. Even long after communism had collapsed, countries that experienced communist rule are unhappier than countries that contain not experienced communist rule with similar household incomes. Regardless of the obvious fact that it's easier to be rich than to be poor, some countries evidently do a far better job of improving their people's sense of happiness and well-being than other ones. Check out figure 1, inside the white circle where all the countries with low GNP per capita and their citizens being happy. Mexico obviously is not doing as well as the U. S in conditions of its economy and infrastructure but its people are happier than Americans. As well as Ireland making around $12, 000 to 13, 000 of GNP per capita, Irish people are happier than Americans. While the average income in america is higher than it was 30 years ago, people are not reporting increased happiness. A country's wealth, therefore, does not always positively correlate to the happiness of its people.
Another example that shows GNH does not correlate with GNP would be Hong Kong. With its high GDP per capita of $39, 146, it is burdened by a high suicide rate, a hamstrung democracy, societal malaise, and heavy pollution.
Bhutan appears to be the happiness put on earth but life there exists filled with hardship. A tiny Himalayan kingdom with low GDP per capita of barely $4, 000, its former king famously proclaimed Bhutan's governing principle as Gross National Happiness. He tried to implement it by emphasizing sustaining development and safeguarding its cultural heritage. Bhutan is not any paradise where its literacy continues to be low and life is packed with hardship. It ranks 131st on the HDI. Even in a very miserable condition you can be very happy if he's grateful for small mercies. If someone is starving and he is given two scraps of food each day, he can be very happy as well.
Developed nations suggest that GNH should only be a supplement since it cannot replace actual specific numbers like GNP. Canada develops the national index of well-being and it is searching for a better way of measuring the grade of life. A comment was created by a Canadian economist that a stable economy is no end to itself, but should serve an objective to boost society. As the well-being policy makers still struggle about how much weight to give to different indicators, the new well-being index will not replace the GDP and it will help to decide how to condition legislations. Index could eventually become a form of report card including various kinds different development indicators rather than single figure. The U. S thinks that the focus should stick to economics (figures). Their census bureau still specializes in collecting information about people's financial circumstances and possessions, not their perception or feelings.
The effects of trade and foreign investment on poor's happiness rely upon the policies of the country. In developing country like Pakistan has large potential to increase happiness of poor through reduction in poverty levels from trade and foreign direct investment. We also used urbanization and tax revenues as share of GDP as control actors in the concerned model to fully capture the impacts of international and local migration and role government to improve the degrees of poor's happiness.
GNH acting as a supplement would help knowing what the social problems are in the society and give focus on them quickly. In reality, there is a very complex link between macroeconomic policies and individual's life satisfaction or happiness. The reason behind this phenomenon is the strong influence of demographic and other micro-level variables. The complete concept of human development requires close integrated policies at various levels of the soci-economic system. You will find people who give weight to some of the social aspects of life like instance health, environment, and leisure. When the variables are negatively correlated with GNP per capita, a rise GNP may not affect the amount of happiness.
The downside of GNH was that it questioned the ends of development and the traditional wisdom of the time. We should not place limits on growth. Many people in developing nations are uneducated and have not seen the exterior world. They don't know very well what it is like to live in a developed nation rather than to gratify so easily. There is already a development indicator called HDI which existed for a longer time and it provided measurements for much more objective aspects of development. Although GNP has its flaws that misinterpret negatives as positives when measuring monetary growth, it provides real economic numbers that tend to be accurate. GNH can only serves as a supplement because happiness is subjective and difficult to accurately equate to other nations.