Measuring Economic Performance and Social Progress

I recommend reading at least the executive summary of  the Stiglitz Commission. The Commission was appointed by President Sarkozy of France to look at statistical measures of economic performance and social progress.  It brought together most of the leading international experts in the area – including Amartya Sen who served as Adviser to the Chair – and is a highly sophisticated summary of the key issues involved in measuring social progress.  The discussion of sustainability indicators is especially useful.  The report underlines several themes which have been emphasized by progressive economists for a long time – including the needs to carefully document the distribution of outcomes as opposed to averages; the need to properly measure public sector output; and the need to focus less on economic performance and more on social outcomes in measuring progress.

http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf

5 comments

  • Wow. Sarkozy must have been upset with *that* result.
    That’s what he gets for forgetting one of the first rules in the book–never commission a study without first knowing what answers it will give you.

  • No, Sarkozy was quite pleased and enthusiastic. On the one hand this is good. Stimulate discussion of objectives of economic policy other than expansion of GDP. On the other hand, too often these kinds of “studies” become a lame excuse for inaction: “We’re studying the matter. To do anything (other than business as usual) before we’ve learned all the facts would be premature.” Just think of the 1980s and 1990s in Canada when “research” was the all-purpose substitute for program spending.

    WE already know what the problem is and what to do about it. Unfortunately the solution is forbidden, as Pierre Larrouturou suggests in the title of his recent book, “Crise: la solution interdite”. The problem is that over the last 30 years a smaller and smaller proportion of total income has been going to middle class and lower income families. Chronically high rates of unemployment and underemployment have ensured that this was so.

  • Whoops, I sent before completing…

    High unemployment and underemployment was a deliberate policy choice, “to contain inflation”. Now government leaders want to somehow get out of the crisis that this income imbalance has caused without dismantling the structural inequity. Clue: ain’t gonna work.

    Speaking of Sarkozy, here’s what Larrouturou says about Sarkozy:

    According to Sarkozy in a recent speech in Toulon “the French people are ready to hear the truth.” Bring it on! Here is the truth: the debt crisis is not a routine accident caused by just a few inconsiderate traders. To guarantee colossal benefits to holders of capital while still ensuring a high level of consumption, neo-liberalism has a structural need for an increase in private debt every year! For 25 years, this crazy system has been very profitable for share holders and bankers but, today, it is leading us straight into the wall!

    There have always been overly greedy shareholders expecting an annual profitability of 10 to 15%. What’s new in the last few years is that they have been able to get what they wanted because huge gains in productivity led to mass unemployment which has totally unbalanced discussion on wages.

    What to do about it? Well, I don’t think my link to the Pierre Larrouturou page worked in the last post, so I’ll try again: Larrouturou

  • Why is it important to measure public sector output?

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