If what experts say has little or no relation to what people feel or can see all around them, it’s inevitable that they stop believing the experts and the politicians they advise, and look for answers elsewhere. This column introduces the work of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress, which argues that we need to develop datasets and tools to examine the factors that determine what matters for people and the places in which they live. Having the right set of indicators, and anchoring them in policy, will help close the gap between experts and ordinary people that are at the root of today’s political crisis.
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Misleading statistics result in misguided policies. If governments think the economy is well on the road to recovery because that’s what GDP suggests, they might not take the strong policy measures needed to resuscitate the economy that they would take with metrics that inform on whether most of the population still feels in recession. If they do not have metrics on the extent of people’s economic insecurity, they may not take measures to bolster the safety net and social protection; they might even set about stripping away some social programmes.
One reason the Great Recession morphed into a social and political crisis is that relying on GDP not only gave a false picture of the overall state of well-being, it contributed to the decline of trust in governments and experts, as people saw that their own situation was not improving despite the claim by the experts, based on certain official figures, that a recovery was underway. If we had had better metrics, including better measures of increases in people’s economic insecurity, we might have realised that the downturn was deeper than the GDP statistics indicated. And if that had been the case, perhaps governments would have responded more strongly to mitigate the negative impacts of the crisis.
The HLEG sets statisticians a challenge: find the right balance between a comprehensive set of metrics that embraces a full account of what is occurring and a simpler and less complete set of metrics that are more comprehensible. In other words, a set of indicators that is broad enough to reflect what matters in people’s lives, but narrow enough to be readily understood by policymakers and the public.
But having the right set of indicators is just the beginning. They need to be anchored in policy. If we want people to trust us, we have to show them evidence that is at least as good as the evidence of their own eyes. And we need to act on this evidence, designing policies that improve their lives. In this way we can close the gap between experts and ordinary people that are at the root of today’s political crisis.
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