The Pursuit Of Happiness

The whitewashed walls and gilded roofs of the Tashichho Dzong have withstood three centuries of fires, earthquakes and Himalayan winters. Inside this imposing fortress-monastery, in his elegant silk robe, Prime Minister Jigmi Thinley presides over the government of Bhutan, an idyllic Buddhist kingdom known for its gentle way of life. The fourth king coined the phrase gross national happiness (GNH) more than 30 years ago to suggest an enlightened Eastern alternative to the pressures of the materialistic West. Dare to call Bhutan “the happiest place on earth,” however, and you are likely to provoke exasperated sighs from Thinley. He has made it his mission since taking office in 2008 to prove to the world that GNH is more than just a utopian dream. It has sometimes been a struggle. “Translating GNH in terms of your plans, policies and programs, that was lacking,” he says. “That, particularly for me, was quite frustrating.”

Bhutan has begun to use GNH as a broader and more nuanced measure of national progress than gross domestic product. Outside the monastery walls, Bhutan faces many of the same challenges as the rest of the world. The rural poor struggle to earn enough from farming, so they migrate to overburdened urban areas; middle-class families worry about young people graduating from college without job prospects. The elite, meanwhile, fret that their kids are spending too much time on Facebook or with their iPads.

Bhutan is, in other words, experiencing the Easterlin Paradox, named for American economist Richard Easterlin, who first established that beyond a certain threshold, rising incomes don’t bring happiness. His most recent research finds the same paradox in China. In the U.S., meanwhile, economic insecurity is affecting reported levels of happiness. The General Social Survey, the oldest effort to measure well-being in the U.S., found in 2010 “the lowest levels we’ve ever had,” Easterlin says. “The picture is not encouraging.”

Bhutan’s audacious solution is to build its society from the ground up using what it calls the “four pillars” of GNH: sustainable economic development, conservation of the environment, preservation of culture and good governance. It may be hard to draw conclusions from a tiny, aid-dependent country known as the Land of the Thunder Dragon, but in some ways, Bhutan is a perfect economic laboratory. Because it is a new democracy tiptoeing into the free market, its policymakers are free to try unorthodox ideas without being burdened by the legacy of how things were done before. Bhutan’s happiness experiment has captured the fancy of economists and politicians from Brazil to Britain, Tokyo to Taiwan, who are looking for a new path to free-market prosperity–one that doesn’t do so much damage to the environment, social equity and family life. “It’s a very meaningful philosophy, not just for Bhutan but for other countries as well,” says Claire Van der Vaeren, head of U.N. operations in Bhutan. “We think Bhutan is on to something very important.”

Measuring Up

The first step in making GNH useful is to measure it. Bhutan’s 2010 GNH survey was nearly seven years in the making, and its results were released earlier this year. Researchers translated the core ideas into nine equally weighted components of happiness. To measure them, they designed hundreds of survey questions, eventually interviewing 8,000 of Bhutan’s 738,000 people in their homes to ask intensely personal, thought-provoking questions: “How many people can you count on for help in case you get sick? How often do you talk about spirituality with your kids? When did you last spend time socializing with your neighbors? How comfortable are you with your level of household debt?” Taken together, the answers form Bhutan’s first baseline GNH index–0.743 on a scale that goes up to 1.

That score represents the most comprehensive effort yet to devise an alternative to GDP, but it is certainly not the only one. Since the 2008 global financial crisis, the calls to rethink GDP have grown more vehement. “The crisis was very helpful because people realized the GDP wasn’t telling us anything about what was going on,” says Joseph Stiglitz, a Nobel Prize–winning economist. “When Bhutan took up GNH, some people said it was because they wanted to take attention away from lack of development. I think quite the contrary. The crisis has made us aware of how bad our metrics were even in economics, because U.S. GDP looked good, and then we realized it was all a phantasm.”

What’s the alternative? Stiglitz has become the world’s leading advocate for developing better measures of national well-being. He leads an influential commission funded by the French government to come up with better ways of measuring it. In response, the Organisation for Economic Co-operation and Development put together the Your Better Life Index, a new Web tool that allows users to rank countries according to 11 measures of well-being. The tool recognizes that everyone has a different idea of what happiness looks like; you can weight the index accordingly and recalculate.

If work-life balance and the environment are most important, Denmark and Sweden rank highest. Give more weight to income and health, and the U.S. and Switzerland top the chart. Stiglitz acknowledges that measures of well-being won’t displace GDP but believes they will certainly supplement it. “I don’t have any fear that it won’t take hold,” he says. “The question is the pace with which they are implemented.”

The pace is picking up in Canada, where the province of Alberta and the city of Edmonton have supported the development of the Canadian Index of Wellbeing. It’s similar to Bhutan’s GNH Index, but instead of using survey questions, Canadian researchers created a composite of 64 existing statistics, including work hours and incidence of violent crime, that are considered proxies for various components of well-being. “We didn’t ask Canadians how they feel,” says Mark Anielski, who led the project.

Great Britain’s Office for National Statistics added four questions about well-being to its largest ongoing household survey last year–including “How happy did you feel yesterday?” and “How satisfied are you with life nowadays?”–at a cost of $3.2 million annually, about 1% of the agency’s budget. The new questions were derided by critics as a frivolous expense in a time of austerity, but Prime Minister David Cameron, a longtime champion of happiness research, stood firm. “He took some political risks to support it,” says Nic Marks, founder of the London-based New Economics Foundation’s Centre for Well-Being. The new data will give Britain’s policymakers a more complete picture of how the country’s citizens are faring, Marks says. “Most people feel disconnected from the dominant economic indicators.”

Screening for Happiness

Once countries start measuring well-being, it isn’t clear how they should use the data. In Edmonton, the new well-being index is intended simply as another data point to guide long-range strategic planning. At most, “we start to pay attention to inequality of well-being,” Anielski says. In the U.K., the modest hope is that well-being measures will creep into the national debate about unemployment and income. “It will start to earn its keep, but that’s a slight unknown,” says Marks.

That’s why in the U.S. well-being indicators have yet to take hold at the federal level. Steve Landefeld, director of the U.S. Bureau of Economic Analysis, acknowledges that GDP’s shortcomings are significant: it does not reflect growing inequality, and as the housing bubble showed so dramatically, it doesn’t do much to warn about future economic trouble. “We think it’s rather urgent” to fix those inadequacies, Landefeld says, but he doesn’t see the need for a well-being indicator. The precursor to GDP was devised during the Great Depression to give the President a clear measure of economic health that would respond directly to government intervention. When interest rates fall or infrastructure spending rises, GDP moves in turn. Well-being indicators, as Bhutan’s GNH experts admit, aren’t very input sensitive and don’t move much over time. For policymakers, Landefeld says, “I don’t know how useful they are.”

Bhutan’s solution is to turn GNH principles into a policy-screening tool to achieve that elusive ideal of sustainable economic development. This effort is still in its infancy, but eventually every significant decision by Bhutan’s government will go through a GNH filter–a set of questions that force policymakers to consider, for example, whether a new tax or public-works project will affect ecological diversity, decrease stress levels in the population or encourage physical exercise. Bhutan is doing a total review of its mining policy using the GNH screening tool to come up with better bidding processes, regulations and revenue agreements that will minimize corruption and environmental damage. “Environmentally, it’s quite a big challenge,” says Sonam Tshering, Bhutan’s economic-affairs secretary. “We have to be mindful of future generations. But we also realize that minerals are a resource that needs to be used for the country.”

Thinking Local

Politicians have always cited ideals in shaping public policy. In today’s extreme partisan battleground, though, it’s hard to imagine U.S. lawmakers setting aside their differences to agree on a single set of principles for screening every big decision. At the state and local levels, however, this is already happening. Maryland has begun using a genuine progress indicator (GPI) to “measure whether or not economic progress results in sustainable prosperity.” Vermont’s legislature passed a law to implement GPI in May, revitalizing a dormant effort to link the mission of Vermont’s social-service agency–responsible for everything from public health to prisons–to quantifiable measures of well-being.

Lofty dreams have been recast in concrete terms. Instead of just “decreasing the lasting impacts of poverty on children,” for example, the state has set a goal of reducing the reading-test-score gap between poor students and others by at least 10 points by 2015. To reach that target, Vermont’s department for children and families will monitor enrollment rates in subsidized child care, prenatal care and other programs. Monica Hutt, director of policy and planning for Vermont’s agency of human services, steers clear of words like happiness. “The word happiness really throws people off,” she says. “It’s about much more than that.” Her aim is to “operationalize” happiness to make Vermont a safer, healthier place to live. “All of these things are connected to that happiness index that started in Bhutan.”

When he first began sharing Bhutan’s vision of sustainable development with the outside world, Thinley says, he did so only reluctantly. “We felt that the world was not ready,” he says. The people of tranquil valleys and noisy cities all over the world are proving him wrong.