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Gross National Happiness (GNH) in Bhutan. Will This Replace GDP In the West?

Updated: May 20, 2022



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In this article, we looked at the OECD’s ‘Beyond Growth’ report, which acknowledges that GDP growth as a singular focus for 38 advanced economies isn’t working anymore, and is even harmful.


It’s a big deal for the Organisation for Economic Co-operation and Development to come up with such a report.



Bhutan, a small Himalayan kingdom half the size of Tasmania, has been doing what the OECD now wants for 50 years.


In Bhutan, they have been focusing on Gross National Happiness (GNH) instead of Gross Domestic Product (GDP) since 1972.

So today, we’ll see what they do, how it works, and to what extent (if at all) the ‘Bhutanese Way’ could be applicable in the West.


BUT…Who cares about a tiny landlocked kingdom?


Bhutan is a tiny landlocked kingdom with a population of 780,000 (which is ironic, coz it’s sandwiched between India and China - the two most populous countries).


But don’t write it off – David and Gandhi weren’t giants and we know what happened to Goliath and the Empire.


Since 1972 – while the West was shifting towards neoclassical economics – Bhutan, a Buddhist country, did the opposite.


Instead of jumping on the bandwagon of competitive liberalized markets, global trade, and minimal role of governments with the singular focus on GDP evergrowth, the Bhutanese asked themselves -


Why should GDP growth be the primary focus of our country?


(What a foresight…was that the Himalayan salt?)


They developed and implemented Gross National Happiness (GNH), defined by Tshering as “a set of social and economic interventions that evaluate societal change in terms of the collective happiness of people and that lead to the adoption of policies aimed at that objective.”


Before you light an ethically-sourced incense, let’s not forget that the word ‘happiness’ in Bhutan doesn’t have the shallow, smiley face connotation like in the West.


Rather, “under the title of happiness in GNH comes a range of domains of human wellbeing. Some of these are traditional areas of social concern such as living standards, health, and education. Some are less traditional, such as time use, psychological wellbeing, culture, community vitality, and environmental diversity.” (Tshering)


So the overall goal of Bhutan - to be attained through GNH - is achieving ultimate happiness.


This goal is underpinned by four pillars of GNH:


1. Equitable and sustainable socio-economic development

2. Preservation and promotion of culture

3. Conservation of the environment

4. Good governance


The Bhutanese Govt identified nine core domains for targeting the level of GNH:


1. Living Standard

2. Health

3. Education

4. Time Use

5. Good Governance

6. Ecological Diversity & Resilience

7. Psychological Well-being

8. Community Vitality

9. Culture Diversity & Resilience


These domains are the components of GNH


They were selected on normative (determining norms) and statistical grounds. They’re “equally weighted because each domain is considered to be relatively equal in terms of its intrinsic importance as a component of GNH” (Tshering).


Each domain is weighted against two to four indicators. These were determined based on their informative capacity across time, having high response rates, and being uncorrelated (Tshering).


So far, we have:


a. Overarching principle and goal -> achieving ultimate happiness

b. Framework for the goal - Gross National Happiness (GNH)

c. Four pillars

d. Nine domains

e. Up to 36 indicators (two-four per each domain)


But how do they measure it?


With the GNH Index


To be identified as ‘happy’, you need to


1) achieve full sufficiency in six out of nine domains

OR

2) achieve full sufficiency in 66% of the weighted indicators regardless of which domain they come from


For example… If you are an uneducated rural dweller living in a village backing onto a national park, growing your own spuds, and saving water, you’re going to score high in indicators, such as ‘Responsibility towards environment’, ‘Ecological issues’, and ‘Wildlife damage’.

These indicators are within the ‘Ecological Diversity & Resilience’ domain. You might also score high on ‘Community Vitality’ and ‘Time Use’ (or other domains), but you won’t do well in ‘Education’ and possibly ‘Living Standard’. Another example:


You are an educated professional living in the capital Thimphu. But you aren’t that keen on the environment, you prefer urban life. You won’t score high in the ‘Ecological Diversity & Resilience’ domain, but you’ll do well in ‘Education’ and possibly ‘Living Standard’.


This means that there’re numerous paths to GNH.


See, your likelihood to meet GNH is based on your particular circumstances and relevance, it’s not a one-size-fits-all approach.

This approach has diversity built-in.


They apply ‘sufficiency cut-off’ which is a benchmark (e.g. 200 out of 1,000). Once you reach 200, you’ve met the requirement for that particular indicator (within that domain). Each indicator has its own sufficiency cut-off.


Your overall GNH score doesn’t increase beyond the cut-off, even if you score 400, 800, or 999.


Tshering from the Centre for Bhutan Studies explains this logic:


“The Gross National Happiness Index takes the position that beyond a certain point, we don’t need to keep adding in higher achievements to the quality of life mechanically; we confine our attention somewhat to a middle band of achievements that contribute significantly to human wellbeing for most people.”


Importantly, the levels of GNH inform government policy-making nationally and at the district level.



The OECD’s ‘Beyond Growth’ report (reviewed here) says – “We can no longer rely on economic growth on its own to make our societies better off”; “Reforms to achieve the new goals need to be built into the core structures,” and, “The goals need to be built into the design of policy.”


In Bhutan, there is no focus on economic growth per se. Instead, ‘Equitable and sustainable socio-economic development’ is only one out of four pillars of GNH.


‘Conservation of environment’ is another one of the four pillars – equal to the economy.


All important aspects of the country’s and peoples’ well-being are built-in.


Decisions and policy-making flow downstream from the goal, pillars, domains, and indicators that cover all aspects of life, incl. culture, education, environment, economy, good governance, time use, etc.


The GNH Index is a measure that reflects the wellbeing and happiness of the population more accurately and profoundly than a monetary measure, according to Tshering.


Through the GNH Index, Bhutan assigns concrete value to equity and free time.


Having more is not rewarded – based on the ‘sufficiency cut-off’ principle.


What we in the West have built in is the maximum economic growth at the exclusion of all else, as quickly as possible. Our singular focus on growth measured by the total $ value of goods and services produced within one year is the OPPOSITE to the Bhutanese approach.


Look, it’s tempting to light the Ru-Goenpa candle and dream about Bhutania, Bhutany, the Bhutanese States (BS), or the Bhutaned Kingdom (BK).


But aside from the GNH / GDP contrast, there are OTHER unique attributes of Bhutan that make parallels with the West harder:


· Bhutan is a landlocked kingdom, one of the smallest countries in the world. Most people don’t even know it exists.

· Bhutan is Buddhist. Buddhism values oneness and interconnectedness with nature and is known for its non-violent behavior towards all forms of life.

· Buddhist concept also doesn’t see human beings as standing against nature. They’re not above, ruling over ‘their dominion’.

· Tourists coming to Bhutan must pay approximately $250 USD per day to the Bhutanese Govt.

· Bhutan measures afforestation as progress. 51% of Bhutan is protected, which is the highest portion for any Asian country. 60% of is forested.

· In Bhutan, like in most East Asian countries, collectivism is valued, not individualism.

· Bhutan chose the path of spiritual, not material ethics and principles.


It’s vital to keep these differences in mind. Yes, the Bhutanese Way is inspiring, amazing, and how-come-we-aren’t-like-that.


They’ve gone beyond the triple bottom line model – something the West is only now embracing. They’ve successfully implemented the ecological economics model in Bhutan, something faaaaaar in the distance in the West.


They have an equal distribution of the economy, environment, and society.


The environment is recognized for what it truly is – the ultimate cradle within which everything else is nested.


They’ve got these principles built into the core structure of society and into the design of the policy.


That’s something we in the West are only now beginning to tiptoe around, as evidenced by the 2020 ‘Beyond Growth’ report by the OECD.


There is a HUUUUGE and WIIIIDE and DEEEP Himalayan valley between Bhutan and the West.


But for me, despite many huge differences, this one stands above all-


It’s the primacy of the individual


That’s at the root of the Western system (economy, society, ethics). It’s been believed, since Adam Smith and John Stuart Mill, that a sovereign individual’s pursuit of profit and wealth is optimal for an individual and thus, for society.


But also, an individual’s acts and morality are separated from policymaking. Individuals are free to pursue their self-interest – any wants and desires.


They don’t shape the government policy by virtue of their way of living reflected by some XYZ score.


That, to me is the biggest difference.


It’s the opposite in Bhutan.


An individual’s acts are directly linked, by design, to the government’s policy where happiness is a social and collective goal, not an induvial goal. An individual’s way of life is built into the design of the government policy through the GNH.


Which brings us to the question…


Will we, in the West, start with tactics, e.g. implementing something like the GNH Index? For example, the OECD’s Better Life Index?


Or, on the other hand, will we start with goals and principles and be bold enough to crucify evergrowth? The OECD isn’t crucifying it but, at least sedating it.


I believe that we’re too addicted and aren’t ready for the cold turkey yet, however…


The writing’s on the wall, and Bhutan shows us what’s possible.


Catch you later.



Jan


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