Question

At the moment the government of Canada measures the strength and well-being of the nation through the GDP, which focuses on economic growth. It is assumed in this case that a country in which goods and services earn high market values is considered to be a 'good' country to live in and that people there are well off. But is this necessarily so? According to Waring, it is important to have an alternative indicator of well-being, ideally one which is arrived at collaboratively and collectively, and which takes a holistic approach to well-being. The Canadian Index of Well-Being has worked collaboratively to develop such a definition. In their words, well-being is defined as: “The presence of the highest possible quality of life in its full breadth of expression, focused on but not necessarily exclusive to: good living standards, robust health, a sustainable environment, vital communities, an educated populace, balanced time use, high levels of democratic participation, and access to and participation in leisure and culture” (CIW).

What do you think about this definition?

Is it complete enough?

What specific things would you include in such a definition?

Answer 1

GDP (Gross Domestic Product) is the total value of goods 7 services produced by an economy, during a given accounting year. It, symbolising flow of goods & services in economy, is sometimes considered a measure of welfare.

GDP however is not a correct measure of welfare :-

• It excludes non monetary exchange items, which increase welfare
• It excludes the extra benefit or extra harm to welfare due to externalities
• It doesn't take into consideration, the composition goods & services of GDP, which is crucial to the welfare level
• It doesn't take into consideration the distribution of average GDP, which affects welfare level

So, many economies have better 'measures of welfare'. Eg : Canadian index of well being incorporates for comprehensive, holistic determinants of over all development - health, environment, communities, democratic participation, culture, leisure etc. As per me, this definition is complete & comprehensively good.

I would have included in this definition of well being, some aspects of 'capabilities' (as per Amratya sen 'capability approach'). The approach mentions well being as individual freedoms ie 'capabilities' and beings & doings ie 'functionings'. It implies how people tap on their effective opportunities to undertake the actions & activities that they want to engage in, & be whom they want to be.