Why World Leaders Must Track Gross National Well-Being
Business Journal

Why World Leaders Must Track Gross National Well-Being

Well-being is a key indicator of a society's stability and economic momentum

Almost no one knows or understands this: Gross national well-being (GNW) occurs before GDP in cities and countries. GNW, or the lack of it, occurs before revolutions and before significant political change.

Clearly, work status makes a difference in how people rate their lives.

This means that virtually all world leaders and heads of states and cities are focused on the wrong things. They are looking through the rearview mirror at GDP in an attempt to see the road ahead. Consequently, they are managing their countries and cities after the fact. Because GDP follows GNW, leaders need to understand what well-being tells us, the impact it has on constituencies, and most importantly, how to increase it.

What well-being tells us

At the end of each day, most people can say if it has been a good day. In fact, they can probably say if it has been a good week, month, year, or lifetime. Now, if you ask people about their day in a little more detail -- "Did you get enough to eat?" or "Did you spend any time with friends?" -- and collect and measure the answers, as Gallup does, you'll get a consistent, reliable measure of well-being.

In fact, Gallup has been asking well-being questions in more than 150 countries for the past seven years through our World Poll, which conducted its 1 millionth interview in 2012. The responses have been subjected to a university math department-worth of statistical analysis so that a lot of complex numbers can be described simply as a "ladder of life."

Building on the Cantril Self-Anchoring Striving Scale, Gallup measures life satisfaction by asking respondents to rate their lives on a ladder scale, with steps numbered from 0 to 10. We have found that one of the best measures of well-being for anyone on earth is these questions:

  • Please imagine a ladder with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you.
  • On which step of the ladder would you say you personally feel you stand at this time?
  • Just your best guess, on which step do you think you will stand in the future, say about five years from now?

Based on how respondents rate their current and future lives, Gallup scientists categorize them as "thriving," "struggling," or "suffering." Gallup has found that, worldwide, those who have "good jobs" -- those who are employed by an employer and work for that employer for at least 30 hours per week -- are most likely to be thriving. Those who are employed part time and those who are unemployed are less likely to be thriving. The self-employed lag behind and are the least likely to be thriving.

The Coming Jobs War

Clearly, work status makes a difference in how people rate their lives.

Furthermore, Gallup has found that the answers to well-being questions are highly correlated with other external ratings taken separately and independently. For instance, Gallup knows that those living in wealthier countries tend to have higher subjective well-being than those living in poor countries. While money doesn't guarantee happiness, living in a wealthy country certainly increases your odds of having a good life.

Expectations are everything

Angus Deaton, one of the world's foremost economists, looked into the relationship between well-being and measures of health, such as life expectancy and prevalence of HIV, and concluded that the relationship between health and well-being is based on the expectation of health and not actual health status.

That's an interesting and important point. Expectations are everything. You might hate being sick, but you'll hate it a lot less if you think you'll be cured soon. For that reason, leaders need to watch the direction that GNW is trending. High GNW that's heading downward is worse for a city than low GNW that's getting a little better every year.

Gallup has also found that as thriving decreases and suffering increases in a country or region, the country or region becomes more unstable. These critical behavioral metrics will become more and more important to countries and cities as they are forced to make drastic cuts in government jobs as well as other government entitlements. They will need to keep a close eye on the growing percentage of people who are suffering because that number is an indicator of potential extreme citizen discomfort and unrest -- even chaos. On average, about two countries per year descend into revolution; Gallup economics has found that one of the key conditions necessary for revolution is whether more and more citizens are suffering.

And, importantly, Gallup's research indicates that having a good job is probably essential to having a sense of higher well-being.

Explore the thriving and employment rates for more than 130 countries by visiting Two Powerful Metrics for World Leaders on Gallup.com.

NOTE: Gallup classifies respondents' well-being as thriving, struggling, or suffering according to how they rate their current and future lives on a ladder scale with steps numbered from 0 to 10 based on the Cantril Self-Anchoring Striving Scale. People are considered thriving if they rate their current lives a 7 or higher and expectations for their lives in five years an 8 or higher. People who rate their current or future lives a 4 or lower are classified as suffering. All others are considered "struggling."

Jim Clifton is Chairman and CEO of Gallup. He is the author of The Coming Jobs War and coauthor of Entrepreneurial StrengthsFinder.
Gallup http://www.gallup.com/businessjournal/159599/why-world-leaders-track-gross-national-wellbeing.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030