Aligning Public Policy with the Way People Want to Live – The New Zealand Treasury’s Living Standards Framework

Wellbeing is being embraced by policy makers around the world and this week we welcome colleagues from New Zealand’s Treasury to discuss their Living Standards Framework.

New Zealand Treasury’s vision is to achieve higher living standards for its residents, using a much wider set of measures than just income to define wellbeing. Here, Joey Au and Girol Karacaoglu set out the Living Standards Framework:


 

GirolKGirol Karacaoglu, Chief Economist     Joey Au,Senior AdvisorJoey Au - NZ Treasury  

 New Zealand Treasury

The ultimate purpose of public policy is to improve people’s lives, now and into the future. 

We do not know how each and every individual wishes to live his/her life, nor do we wish to pass judgement on how they should be living their lives.OECDBLI

We can however rely on the robust findings of numerous studies, covering a large variety of countries and cultures, about the broader domains of individual wellbeing.

For example, OECD’s Better Life Initiative (BLI) [OECD (2013)] focuses on domains classified under quality of life and material conditions (Figure 1).

 

The Treasury’s Living Standards Framework (LSF) follows the lead of Atkinson (2015), Gough (2015), Phelps (2013), Sen (2009), and others, in emphasising that public policy can improve people’s lives now and into the future by enhancing the capabilities and opportunities, as well as incentives, of individuals to pursue the lives they have reason to value. It provides a guide for thinking about good economic, environmental and social policies in an integrated way and is illustrated in Figure 2.

NZTreasury LSF

Good public policy focuses on ensuring that the wellbeing-generating capacity of capital assets (human, social, natural and economic capital) is sustained or enhanced – that is: not eroded by current generations at the expense of future generations (sustainability);shared in a manner consistent with sustaining or enhancing the capital base (equity); no particular social group(s) impose their concepts of wellbeing on others, respecting others’ rights to live the kinds of lives they have reason to value (social cohesion); capital assets are protected against major systemic risks (resilience); and the material wellbeing generating potential of these assets (“comprehensive wealth”) is enhanced (raising potential economic growth).

These five dimensions of the LSF define the boundaries of society’s wellbeing frontier, and are therefore of legitimate interest for a public policy that aims to push out these boundaries, while also being cognisant of their interdependencies.

Treasury’s stylised LSF model, while drawing on the work of Arrow et al (2012), is intended to serve as a policy-guiding tool. It weaves together threads from the wellbeing, human needs, sustainable development, endogenous economic growth, and directed technical change (favouring “clean” technology) literatures [Karacaoglu (2015)].

The model suggests that a time-consistent policy package needs to be strongly grounded in the history, cultures and values of the society it is intended for. Universal access to basic income, and to health services, housing and education, provides the necessary platform. A set of economic, social and environmental infrastructures (including strong institutions) act as enablers, but also provide the incentives to participate productively in economic and social life.

In practice, to design effective and efficient public policies, we need to know which aspects of living standards are most important to people, and be able to assess the trade-offs they are willing to accept. Au et al (2015) demonstrate an application of the survey-based methodology we are increasingly using to make these assessments. Au and Karacaoglu (2015) provide a summary of the applications of the LSF in the Treasury’s policy advice.

→ NZ Treasury Living Standards Framework

 

Have your say on Sustainable Development Goals

In the UK  the Office of National Statistics takes a snapshot of how we are doing as a nation, communities and individuals and how sustainable that is for the future in the Life in the UK reports, across the 10 domains and 41 measures of national wellbeing.

At a global level the UN has the Sustainable Development Goals , or ‘Global Goals’ which are a set of 17 goals, 169 targets and 241 supporting indicators.

The ONS are seeking views on what the UK report on these global goals  by 27th May.

SDGs_poster_new1

ONS are responsible for reporting UK progress towards the goals. They are currently running a consultation (with UK Stakeholders for Sustainable Development) where you can inform decisions about which global targets and indicators are relevant for the UK,  and what potential new, UK-focussed indicators there could be.

→Have your say

→ More information about the goals

There is no target or indicator about personal wellbeing. Should we be taking account of how people assess the quality of their own lives? Should there be indicators of this included as part of the UK’s monitoring of specific goals (like health and wellbeing?)

The connection between wellbeing, sustainable development and the Sustainable Development Goals was considered in the this year’s World Happiness Report:

Measuring self-reported happiness and achieving well-being should be on every nation’s agenda as they begin to pursue the Sustainable Development Goals….Indeed the Goals themselves embody the very idea that human well-being should be nurtured through a holistic approach that combines economic, social and environmental objectives. Rather than taking a narrow approach focused solely on economic growth, we should promote societies that are prosperous, just, and environmentally sustainable. Jeffrey Sachs, director of the Earth Institute at Columbia University.

Out of the shadows – World Bank & World Health Organisation on Mental Health

Guest blog from our Chairman Dr Paul LitchfieldDr Paul Litchfield

I have just attended a joint meeting of the World Bank and the World Health Organisation in Washington – the topic was mental health and the pressing need to make it a global development priority. It was good to see that mental illness is now, at last, being seen as part of the non-communicable disease crisis that is afflicting every part of the planet.

Margaret Chan, WHO Director General, flagged up recent research showing the global cost of anxiety and depression as being $1 trillion per year and  Jim Yong Kim, World Bank President, framed the issue as one of development and not just public health.

WHO & World Bank

The meeting, titled Out of the Shadows, sought to shine a light on a subject still characterised in many parts of the world by fear, stigma and neglect. Even in the “developed” world the imbalance of resources devoted to mental health compared to physical health is stark. Innovative models of service delivery were showcased from around the world and ranged from individual placement and support in the most deprived communities to high tech psychological therapies.

Workplace interventions are of particular interest to me but progress in that area seems remarkably slow. There appears to be a widespread reluctance by many health professionals to engage with the private sector, even in relation to companies’ own employees. Perhaps that is a reflection of a lack of shared experience and language but some of it also appears to be driven by political dogma which has no place in responding to human distress and misery.

It is heartening to see the progress that has been made in addressing mental illness over the past 30 years. There remains much to do but the profile the issues now have and the range of key players that see the need for action gives cause for hope. The downside is that the positive aspects of good mental health and wellbeing are only mentioned briefly in any discussion before the focus shifts entirely to illness and healthcare systems. The medical model of health that has dominated the past 100 years is not sustainable. Spending 17.5% of GDP on healthcare (as the USA did in 2014) diverts resources from other essential areas and untold harm will be caused to emerging economies that try to emulate the model.

We need to not only accept and address the social determinants of disease but also to reframe political thinking to consider citizens’ wellbeing as the priority. Having a positive – wellbeing – as the end point aspired to is much more motivational than the simple avoidance of harm – illness. Promoting the elements that have been shown to improve wellbeing will reduce ill health while at the same time advancing human happiness and societal progress. That has to be a better framework than one based on the fear of pestilence – whether that is physical or mental.

Dr Paul Litchfield

World Economic ForumAlso launched at the conference is the World Economic Forum Global Agenda Council on Mental Health and their new guide for improving wellbeing at work.

Seven Steps Guide towards a Mentally Healthy Organisation

 

You may also like 

→ E-course on wellbeing in policy & practice

→ Case Studies wellbeing at work 

→ Wellbeing in the UK data

World Happiness Report 2016 summary findings

The fourth edition of the World Happiness Report has been published this week by the Sustainable Development Solutions Network with a 2016 special update.160311-whr-2016-happy-ppl-opt

The growing interest in the report reflects growth across the world in using subjective wellbeing and happiness as primary indicators of the quality of human development as many governments and organisations are using wellbeing research to develop policies for improving lives.

“Measuring self-reported happiness and achieving well-being should be on every nation’s agenda as they begin to pursue the Sustainable Development Goals,”

 Jeffrey Sachs, director of the Earth Institute at Columbia University

The report is co-edited by Professor Richard Layard (who heads up our Cross Cutting evidence team).  The report uses ‘happiness’ and ‘subjective wellbeing’ interchangeably. It ranks 157 countries by their happiness levels:

160314-whr-2016-fig2.2-1024x512

This year, for the first time, the World Happiness Report also gives a special role to the measurement and consequences of inequality in the distribution of wellbeing among countries and regions.

What’s important for high wellbeing?

Three quarters of the difference in wellbeing between the top 10 and bottom 10 countries and regions can be explained by:

  1. Social support so that you have friends and family to count on in times of trouble
  2. Freedom to choose what you do in life
  3. Generosity and how much people donate to charity
  4. Absence of corruption in business and government
  5. GDP
  6. Healthy life expectancy

These don’t explain everything, for example with this data we are not yet able to understand how much our wellbeing is impacted by having a sense of purpose and feeling what you do in life is worthwhile.  They did find that the experience of positive emotion matters more to our overall wellbeing, measured by life satisfaction, than the absence of negative emotions although both are important.

What supports national resilience? 

The report also looks at changes in wellbeing over time, looking at the impact of the recession by comparing data from 2005/7 and 2013/15.  The biggest drops in wellbeing are more than would be expected from changes to economic situation alone.

Resilience, that enables a positive response to a crisis and increases positive emotion, looks like it comes from having a caring and effective community through:

  • strength of social fabric
  • levels of trust
  • institutional quality
  • generosity
  • shared purpose

Wellbeing in the UKWHRpt 16

The World Happiness Reports give an understanding of wellbeing at a national level.  The UK is:

  • 23rd of 157 countries in the world happiness rankings 2013-15
  • 85th of 126 countries in our change in happiness from 2005-7 to 2013-15
  • 46th of 157 countries in inequalities of wellbeing in 2012-15

The What Works Centre for Wellbeing is focused on understanding what governments, business, communities and individuals can do to improve wellbeing at a policy and practice level in the UK.

You can see similar information for the whole of the UK measured by the Office for National Statistics.

→New e-course on wellbeing in policy and practice in the UK 

A thousand wellbeing flowers are blooming


Saamah Abdallah
, Senior Researcher & Programme Manager, NEF and part of the Community Wellbeing evidence team, shares his thoughts from the 5th OECD World Forum.


saamahMexico is a country of vivid colours, and its bright vibrant flowers are a welcome sight when you’ve come from autumnal England.  So it was a fitting country for the Organisation for Economic Cooperation and Development’s Fifth World Forum on Statistics, Knowledge and Policy, where, indeed it was clear that wellbeing initiatives around the world are starting to bloom.

The OECD’s World Forums have been central to the development of the wellbeing agenda.  The first one, in Palermo in 2004, was little more than an exploration of the idea that there are new things that we should be measuring to understand progress.  2007, the Istanbul Declaration was signed by the OECD, the United Nations, the United Nations Development Programme, the European Commission, the Organisation of the Islamic Conference, and the World Bank, demonstrating the desire of the signatories to move Beyond GDP.  At the last World Forum, in New Delhi in 2012, talk was still focussed on measurement, and how it should be done.  But now, in 2015, in Guadalajara in Mexico, data was flowing and the policy implications being considered.

Countries all around the world were starting to measure wellbeing in ways that one could not have imagined a few years ago. Turkey has carried out a survey reaching over 120,000 households so as to be able to map wellbeing across its 81 provinces. In several states across Australia, wellbeing is being assessed for every single child at school. In Ecuador, the 2008 constitution incorporates the concept of Buen Vivir (good living) as their model of development (in opposition to a focus on economic growth) and the statistics department there is busy trying to measure this objective. The tiny Pacific state of Vanuatu, that came top of the first Happy Planet Index in 2006, has started collecting wellbeing data. And in Mexico itself, as well as an impressive network of citizen-led local initiatives measuring wellbeing, the official statistics office published the results of a large scale survey which has allowed them to assess wellbeing across all the 31 states, and explore the relationship between subjective wellbeing and material conditions.

Presenters were beginning to link wellbeing evidence to clear policy implications. Not just academics and think tanks, but political actors as well. UK MP David Lammy talked about supporting active transport, and arts and culture education. Aristoteles Sandoval, the Governor of Jalisco, the state Guadalajara is part of, talked about the need to reduce inequality (as indeed did almost everyone at the event). Sangheon Lee, from the International Labour Organisation highlighted new evidence that job quality does not need to come at the cost of job quantity.

And mechanisms are beginning to be put in place to ensure new data is considered in policy decisions. In Israel, the Ministry for Environmental Protection, Central Bureau of Statistics and Economic Council are creating a structure of wellbeing indicators which government ministers will be held to account on. In Finland, the Prime Minister’s office is identifying 25-30 indicators on five key themes with the same purpose.

The What Works Centre, which is of course one of the UK’s mechanisms for getting wellbeing data used, was well represented at the conference.  Chair Dr. Paul Litchfield spoke on a plenary panel about behaviour insights (I also chaired the session). Lord Richard Layard, who leads the cross-cutting evidence programme, spoke at a session on the importance of subjective wellbeing for the sustainable development agenda.  And Lord Gus O’Donnell, Patron of the What Works Centre, spoke at a plenary session on how alternative indicators were already being used in policy.

Slowly but surely, wellbeing is getting into policy.  The UK is making important contributions to this global movement, but there’s a lot we can learn from elsewhere too.  The What Works Centre will be keeping an eye on all this to make sure we do know what works to improve wellbeing.

Transforming policy changing lives – a view from the 5th OECD World Forum

OECD world forumThe OECD (partners on our cross-cutting evidence programme) held it’s 5th World Forum on Statistics, Knowledge and Policy last week with a focus on action and implementation.

Bringing together examples of policies, frameworks and institutions that are using new well-being measures around the world it looked to answer the question evolving from “How do we measure progress?” to “How do we best put those measures into practice for policies aimed at improving lives?”.

videos of all the forum sessions.

Our Chair, Dr Paul Litchfield reflects on the forum below.


PaulLitchfieldI have just attended the 5TH OECD World Forum on Statistics, Knowledge & Policy held in Guadalajara, Mexico.  The event drew some 1,400 representatives from around the world to discuss wellbeing and how measures are being used to drive a new approach to setting and evaluating policy.

For me, the event signalled a step change in attitudes.  Multiple examples were showcased of how a focus on wellbeing is transforming lives and, critically, a succession of political leaders articulated how they are now placing the concept at the heart of what their administrations are seeking to achieve.  Inevitably at an event with a strong focus on statistics, measurement featured strongly but it was refreshing to hear that most people are moving beyond dry debates about definitions and methodologies to focus on action and implementation.  The broad range of backgrounds evident among the speakers reflected the potential strength that is available through multidisciplinary collaboration.  However, there are many residual silos of expertise that will compromise rapid progress unless we learn each other’s languages, adapt to each other’s ways of thinking and respect evidence gathered in a manner different to our own conventions.

The programme featured a number of inspirational interventions but, as ever, Joseph Stiglitz’s contribution stood out for its coherence, gravitas and challenging messages.  The evidence presented to show the rise in inequalities that we have experienced in recent times was sobering.  Similarly the observation that the impact on human capital of the economic crisis has been underrepresented was compelling and the lifelong loss of training and skills acquisition resulting from high levels of youth unemployment must be a major cause for concern.

On a more positive note, the demonstration of how “big” and crowd sourced data can be used to supplement traditional collection methods was stimulating.  The elegant presentation by Johannes Eichstaedt of the strong predictive power of language used in social media to identify risk factors for disease and the optimum areas for intervention was truly exciting for a physician trained long before Twitter and other applications had been conceived.  The point was well made however that such sources are by nature ephemeral and cannot therefore be relied upon for the longitudinal studies that add so much to our knowledge.OECDvideo

The What Works Centre for Wellbeing was well represented with Gus O’Donnell, Richard Layard and Saamah Abdallah all speaking from the platform.  I took the opportunity in the panel session to which I contributed to describe the work of the Centre and to set that in the context of the What Works Network and the behavioural insights movement in general.  Our work attracted considerable interest and there is undoubtedly potential for future collaboration with a number of bodies from around the world.

Mental health day and wellbeing

October 10th is the 23rd World Mental Health Day hostedWMHD_report_2015_cover
by the World Federation for Mental Health.

Mental health is a key determinant of our wellbeing, from adult mental health and employment, child mental health, dementia to the promotion of mental health.

The wellbeing research and data give a good indication of where we can make a difference if we are serious about improving our wellbeing. Enhancing wellbeing is a key intermediate outcome in a preventative approach to policy and leads to other positive outcomes.

From the research and data we can formulate our priorities for improving wellbeing:

 Followed by:
2. Social relationships, social support and communitiesPositive social relationships at home and work have a significant impact on our wellbeing. Neighbourhood belonging is particularly low in the UK.
3. Prosperity – Sustainable, stable growth and good work. Money does matter, especially up to a certain point, but has diminishing returns. Most things, including a pay rise, don’t have a sustained impact on wellbeing but being unemployed for more than a year does have a sustained negative impact.
4. Childcare, early years, work life balance. Life-satisfaction, good mental health and wellbeing in adult-life is strongly influenced by the development of strong mental health, social and emotional skills in childhood. UK is lowest on sense of vitality in Europe.
Levels of wellbeing vary across the life course, dipping in the mid teenage years, at midlife, and again among the oldest old.  There are ways to cushion the impact of this dip and these will have an impact on other things we care about too like health, work and crime.
→Mental health is a key priority in improving our wellbeing, and we should support evidence-based approaches and interventions that can add to the evidence.
→Here’s on our patron, Lord Gus O’Donnell on Why we must stop ‘spending on failure’ with mental health.

→The theme of this years WMHD is Dignity in Mental Health.wfmhlogo

 “Dignity” is a word that has a number of meanings, none of them precise—but we all recognize dignity when we see it, and more importantly, we recognize the lack of it when it’s absent

→ You can support on Facebook and Twitter and also join Thunderclap to donate your status update on October 10 using #WMHD

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