Associate Professor, Dalhousie University
Gross National Product “measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans,” Robert F. Kennedy, 1968.
“I always remembered that quote,” said former Maryland Governor Martin O’Malley, explaining one reason why he supported introduction of a Genuine Progress Indicator (GPI). His administration began calculating the GPI in 2010 to complement but not replace GDP. By including monetary estimates for a range of environmental, social, and economic costs and benefits ignored in GDP calculations, the GPI provides a more comprehensive picture of wellbeing.
The idea that the state should examine alternative prosperity indicators came from Maryland’s Office for a Sustainable Future and its sustainability policy director, Sean McGuire, who was trained in ecological economics at the University of Maryland (where, years earlier, Herman Daly had developed the GPI’s predecessor, the Index of Sustainable Economic Welfare). While moving beyond GDP as the leading prosperity measurement has been, for some supporters, a key part of the project of dethroning economic growth as the dominant societal priority, the idea has also gained ground in recent years in the political mainstream among those who see it as a tool for better policymaking without directly questioning the growth paradigm.
In our recent article on the Maryland GPI, Jeff Wilson and I examine the following questions: What have the impacts been of Maryland’s GPI initiative? Is there any evidence to date that the GPI has shaped policy and public priorities in ways that live up to supporters’ expectations, whether for better policymaking or more radical transformation? What key obstacles exist to fulfilling those expectations? To answer these questions, we draw on semi-structured interviews with elite respondents—including Governor O’Malley, senior public servants, academics, non-governmental organization employees and foundation leaders—involved in producing, advocating and using the GPI, along with analysis of relevant documents and media articles.
We found that Maryland’s GPI initiative revealed promising possibilities for policymaking that gives greater weight to ecological and social considerations—potentially helping to level the playing field that has been tilted toward conventional economic values—although these possibilities are still some way from being fully realized.
The GPI can help to show net societal benefits of policies such as investing in public transit, increasing the minimum wage and reducing GHGs—giving policymakers and advocates additional ammunition for political battles over such issues. In other words, the potential for what some theorists call the “political use” of indicators was evident with Maryland’s GPI.
Less evident so far is any direct impact of the GPI on policy decisions—or “instrumental use.”
Indeed, researchers have often struggled to find evidence of direct policy impacts from other “beyond-GDP” measurement initiatives around the world and from sustainable-development indicators.
To their credit, key players working on the Maryland GPI took steps not only to produce a new indicator, but also explore how to integrate it into policymaking. Some GPI-impact analysis of policy ideas occurred within the state bureaucracy. The non-governmental Center for a Sustainable Economy also produced a prototype “GPI note” on the GPI impacts of a minimum-wage increase (Talberth 2014), providing a more complete picture than a conventional fiscal note outlining a proposed policy’s effect on government finances. One promising offshoot of the GPI initiative was a pilot study of the use of Net Present Value Plus (NPV+) analysis, which goes beyond conventional cost-benefit analysis to include, like the GPI, social and environmental considerations that typically go uncounted. It showed, for example, that when the value of ecosystem services are considered, the state would derive more value from purchasing wetlands and forests and protecting them than by allowing sprawling suburban development (GFN 2015).
One main obstacle in Maryland was that the clock ran out on officials who were working behind the scene on innovative GPI applications before a new Republican governor took office in 2015. (Although there has been, in one interviewee’s words, a “de-emphasis on the use of the GPI” since 2015, the state’s Department of Natural Resources has maintained its GPI web pages and continued some GPI work.) Other obstacles included the commonplace challenge of resistance to new ideas, including some bureaucratic resistance; the need for training to use the GPI and related policy tools; and concerns over cost and time involved in producing the data needed to apply the GPI to policy decisions.
Although both the initiative itself and political opposition to it had a low profile, ideologically driven opposition could be found on the margins of public debate. For example, former Republican Governor Robert Ehrlich (2015) called the GPI “liberal snake-oil for what ails anti-business states,” while another right-wing critic went further, likening it to the “propaganda” that supported Lenin’s New Economic Policy and Mao’s Great Leap Forward (Pettit 2012). Should the GPI or other beyond-GDP indicators become more prominent and shift policy decisions in a greener and more socially progressive direction, they will likely attract more fire from opponents, suggesting a need for further work to build up the base of political support for alternative prosperity measurements.
The Maryland case also raises some questions about the GPI’s own limits, especially for those who hope that moving beyond GDP can support a post-growth, post-consumerist economic narrative. While GPI is an improvement in important ways on the use—or misuse—of GDP as a wellbeing measurement, it remains dominated by personal consumption expenditures. This can lead to surprising results. In 2015, for example, Maryland saw increased costs from income inequality, crime, and environmental degradation, including a 3 percent increase in greenhouse gas emissions. Yet the GPI rose nearly 4 percent—due mainly to a large increase in household consumption. There remain grounds for debate over how to further refine the GPI (e.g. to reduce the prominence of consumption expenditures and increase estimates of environmental costs), whether the GPI deserves to be the main beyond-GDP alternative, and which other indicators are needed to supplement it.
One final lesson from Maryland is that achieving a significant impact through beyond-GDP measurement is a long-term process. Governor O’Malley referred to the initiative in terms of “planting seeds,” while some theorists have emphasized potential long-term impacts from the “conceptual use” of indicators, i.e. by changing mental models and encouraging new ways of thinking. As a pioneer and host of two national GPI summits, Maryland also contributed to encouraging GPI initiatives of various kinds in other states, including Vermont, Oregon, Washington, Hawaii, among others. There may yet be impacts to come in Maryland from increased awareness among non-governmental organizations of the need for efforts to make the policy sphere friendlier to non-economic values and, hopefully, a future revival of efforts to apply beyond-GDP measurement to policymaking in innovative ways.
The full article is available (open access):
Hayden, Anders and Jeffrey Wilson. 2018. “Taking the First Steps beyond GDP: Maryland’s Experience in Measuring ‘Genuine Progress’.” Sustainability 10(2):462. http://www.mdpi.com/2071-1050/10/2/462
Ehrlich, Robert. 2015. “Kitzhaber and How the Left Cooks the Books.” National Review, February 17.
GFN. 2015. “Making the Economic Case for Sustainable Investments in Maryland.” Oakland, CA: Global Footprint Network.
Pettit, Jim. 2012. “Redefining American Progress.” National Review, October 25.Talberth, John. 2014. HB 295: Maryland Minimum Wage Act of 2014. Washington, D.C.: Center for Sustainable Economy.