Is Happiness Relevant to Development?

There are differing opinions on what poverty and development are and the role that happiness plays in them (see for example Development Roast’s January article ‘Opinion: Why happiness does not matter for the problem of poverty’). Aside from poverty itself, the world’s view on how to conceptualize and measure development has evolved over time. Factors that years ago were considered completely irrelevant to development are increasingly incorporated into our collective understanding of what it means to advance and the new directions of the concept’s evolution are proving highly interesting.

It is safe to assume that everyone wants to be happy; happiness is often referred to as the ultimate goal of existence at the individual level. However, a global scale evaluation of happiness levels, in relation to nations’ development, is rare since, for some, its natural subjectivity makes it inadequate for the analysis of progress. However, slowly, over time, views are changing.

Junior likes to smile. (San Juan de Lurigancho, Lima, Peru). Photo credit: Lorena Talavera

Until recently, the measurement of a country’s progress was based only its people’s income per person (the country’s gross domestic product (GDP) divided by its population): where lack of development was directly equated to low income, i.e. poverty. But poverty goes beyond income levels and, as this idea settled into society’s thinking, new, more complex, and increasingly comprehensive development indicators have been introduced. For further discussion on this see ’Graphics: Is there more to life than money? Mapping happiness of people and planet’.

Launched in 1990 by the United Nations Development Program (UNDP), in an attempt to make policies more people-centered, the Human Development Index (HDI) was one of the pioneers. It includes three dimensions: life expectancy at birth, adult literacy rates, and standards of living. According to this indicator Norway leads the table. One of the main criticisms for this index, by Prof. Martin Ravallion (former Director of the Development Research Group at the World Bank), is that the trade-offs between the indicators that make it up need to be questioned, as they “implicitly put a value on an extra year of life.” However, Francisco R. Rodríguez from the UNDP responded to this criticism, and said that

“trade-offs are implicit in any aggregate index, and exploration of these trade-offs is meaningful.”

Later came the 1997 Human Poverty Index that differentiates developing and developed countries. The differentiation consists of different indicators being used for the calculation of the index in both cases, making comparisons between countries complex. This index involves life expectancy at birth, literacy rates (like the HDI), access to water (for developing countries only), population below income poverty line, and unemployment levels (for developed countries only).

The most recent indicator is the Multidimensional Poverty Index (MPI) which uses the three HDI dimensions but divides them into ten more specific indicators. It takes into consideration factors such as availability of cooking fuel and the possession of assets. Prof. Ravallion puts forward a similar criticism to that of the HDI in relation of the composition of the index,

“How can one contend (as the MPI does implicitly) that the death of a child is equivalent to having a dirt floor, cooking with wood, and not having a radio, TV, telephone, bike or car? […] Being multidimensional about poverty is not about adding up fundamentally different things in arbitrary ways. Rather it is about explicitly recognizing that there are important aspects of welfare that cannot be captured in a single index.”

Despite such criticisms, from a merely human-developmental perspective, the evolution of these indicators is necessary as it allows for a better understanding of poverty in different countries through a grass-roots evaluation. It also enables more specific policies; for example, for analyses of returns to national investment, it is easier for governments to see exactly where it is that they are falling behind or where they are doing a good job. Besides, these evolving indices (in most cases) provide an aggregate figure that facilitates cross-country comparison involving more than just income per capita. Development thus becomes not only about who earns more, but also about access to public goods and cost of living, among other aspects which turn it into a more people-inclusive measure.

The evolution of different development indicators has not stopped there. Aside from trying to get a better grasp of what poverty actually entails, some indicators have gone further and include perceived well-being and happiness. The subjectivity of these concepts is what makes their inclusion in newer indicators controversial, Dr. David L. Luechauer’s critique, is an example of the arguments for a more objective assessment. The Happy Planet Index (HPI), published by the London-based think tank the New Economics Foundation (NEF), considers people’s perceived well-being and nations’ ecological footprints alongside average life expectancy. Surprising reshuffling of the ranking table of the world leaders in development occurs when more than economic welfare is considered: Costa Rica, with a 2012 income per capita of US$12,600 and carbon usage per person of two metric tons per capita in 2009, consistently tops the Happy Planet Index. Basing the assessment simply on GDP per capita, Costa Rica would be far behind Luxembourg, which is consistently in the top three of GDP per capita ranks, with $81,100 per capita in 2012, yet in the HPI rankings it is among the bottom three countries.

The South Asian country of Bhutan takes things even further. Instead of measuring its development in income, the country’s leaders collect and publish data on its Gross National Happiness (GNH) as, like the current King Khesar, they believe that

without peace, security and happiness we have nothing.”

And that is exactly what the GNH tries to measure through its seven types of ‘wellness’: economic, environmental, physical, mental, workplace, social, and political.

This increasing interest in more abstract measures is not exclusive to evolving development measures. At the end of 2012 the Worldwide Independent Network of Market Research (WIN)/Gallup International Association (GIA) published the Global Barometer of Hope and Happiness. The participants were asked “As far as you are concerned, do you personally feel happy, unhappy, or neither happy nor unhappy about your life?” And Colombians were found to be the happiest. However, criticism raises the issue of people potentially feeling pressured into giving more positive responses than what they actually feel. Warren Davies evaluates the complexity of measuring happiness in his post ‘Can Happiness be Measured?’ and argues that

“happy, positive people are more attractive, so you might expect people to report a happiness score that they view as being attractive.  This explains why you get higher happiness scores if you do surveys by interview than by post.”

Today’s development measures are still far from perfect. Poverty involves many aspects that are interlinked in numerous ways, and are not simple to put together.  Even though the evolving measures can be very controversial for some, and, depending on your views, they might not the best indicators for policy making; it is encouraging that the concept of development is evolving into a more people-friendly assessment.

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Lorena Talavera is a Research and Communications Intern at INESAD.

For your reference:

UNDP 2012. ‘International Human Development Indicators’


University of Oxford, OPHI 2013. ‘OPHI Measure Used in Creating the Bhutan Gross National Happiness Index’


CIA World Factbook 2013. ‘Costa Rica’

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The World Bank Databank 2013. ‘Costa Rica’

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