GDP cannot be considered as a measure of well being.

1. GDP :Both the measure and goal are flawed.
High time to revisit Buddhist Economics- case
in Bhutan
Image source

2. Image source

3. Measurement
 Gross domestic product = quantity x price of FINAL G/S
sold
 Gross National Product
 Simon Kuznets
Image source

4. “The welfare of a nation can
scarcely be inferred from a
measurement of national income”
- S. Kuznets, 1934
Image source

5. What Counts?
 Pollution
 Crime
 Health damage
 Family breakdown
 Debt, foreclosure, bankruptcy
 Increasing scarcity
Image source

6. Image source:
Maria Juncos

7. Economic Growth as a Priority
 GDP as a measurements of “progress”
 800% increase in throughput in 20th Century
 Growth as a policy priority
 Inequality as a result
 Both the measure and the goal
are flawed
Image source: Victor, 2010

8. SO…WHAT’S MISSING?

9. What are the Alternatives?
G. Pinchot (1905)
 The Greatest Good
 For the Greatest Number
 Over Longest Run
J. DeGraaf (2011)
 High Quality of Life
 Social Justice or Fairness
 Sustainability
Image source Image

10. Wellbeing, Quality of Life….Happiness
 Origins: foundational to conventional economics
 A modern experiment..
Image
source

11. The Gross National
Happiness Index (GNH)
The Centre for Bhutan Studies
2011
.

13. Bhutanat a glance
• Size: 38,394 km2. (close to the size of Switzerland)
• Population: 768,084 (population density: 20 p. per sq. km.)
• Poverty: 12%
• Language: Dzongkha
• Capital: Thimpu (10-15% of the population)
• Government: Constitutional Monarchy since July 2008 (7 yrs. ago!)
Divided in 20 Dzongkhags (administrative and judicial districts)
• Religion: Buddhism
• School: 72% secondary school /youth literacy rate 74%
• Economy: Agriculture, forestry, hydroelectric power (largest export
product) and now tourism (ecotourism).
Also called Druk Yul or the
“land of the thunder dragon”. They call
themselves the Drukpa people.
Eastern Himalayas,
between China
(Tibet) and India.

14. .
1. GNH concept
2. 9 GNH domains
3. 33 indicators
4. Weighting
5. GNH thresholds-sufficiency &
happiness
6. GNH Index methodology

15. Legal code of 1629*
“if the government cannot
create happiness for its
people, then there is no
purpose for government to
exist.”
.
*Provided laws for government
administration and for social and
moral conduct.
Zhabdrung Rinpoche (Ngawang Namgyal) , Tibetan
Buddhist lama and the unifier and funder of
Bhutan as a nation-state in the 17 th century.
GNH concept

16. Buddhism and happiness in a nutshell:
For Buddha, THE PATH TO HAPPINESS starts from
understanding the root of suffering.
Four Noble Truths, which are the basic conceptual framework for
Buddhism:
1.The Truth of suffering (dukkha): Life, existence is unsatisfactory.
2. The Truth of the cause of suffering: That craving for and clinging to what is pleasurable and the
aversion to what is not pleasurable result in long term suffering, unhappiness (rebirth,
dissatisfaction, and redeath)
3. The truth of the end of suffering: Putting an end to this craving and clinging is the end of
suffering.
4. The truth of the path that frees us from suffering: The Noble Eightfold Path, which is the
MENTAL STATE OF HAPPINESS in order to achieve enlightenment. Is the AWAKENING AND
LIBERATION of the Buddha.

17. The Noble Eightfold Path for HAPPINESS in a nutshell:
1. Right View Wisdom : Perceiving the true
2. Right Intention nature of ourselves and the world
around us…and our intention to
perceive this (practice of Buddhism)
3. Right Speech Ethical Conduct: Take care of
4. Right Action our speech, our actions and our daily
5. Right Livelihood lives to do no harm to other and
cultivate wholesomeness in
ourselves.
6. Right Effort
7. Right Mindfulness Concentration: To develop the mental discipline to cut
8. Right Concentration through delusion to be able to perceive our true nature.
Right Livelihood = Buddhist Economics

18. 4th King of Bhutan, 1972
Jigme Singye Wangchuck, at age 17
.
http://ecooptimism.com/?p=506
“Gross National Happiness is more
important than Gross National
Product.”
Noble Eightfold Path for HAPPINESS: Right Livelihood

19. Buddhist Economics (Chapter 4)
Right Livelihood (work), finding the right path for
human development (the real purpose of the economy).
• Give a human being a chance to utilize and develop
his/her faculties (to be productive in society).
• Enable him/her to overcome ego-centeredness by joining
with other people in a common task.
• So he/she can produce the good and service needed to
maximize well-being with:
 the minimum consumption,
 from local resource (sovereignty),
 with appropriate local-scale technology and
 with reverence and non-violent attitude towards
nature and sentient being.
1973
Ernst Friedrich Shumacher
Noble Eightfold Path for HAPPINESS

20. Constitution of Bhutan 2008 Article 9:
“The State shall strive to promote those
conditions that will enable the pursuit of
Gross National Happiness.”
.
The 5th King of Bhutan, is
committed to GNH.
Jigme Khesar Namgyel Wangchuck
2008- A
Constitutional
Monarchy

21. .
1. GNH concept
2. 9 GNH domains
3. 33 indicators
4. Weighting
5. GNH thresholds-
sufficiency & happiness
6. GNH Index methodology

22. The domains, the 33 GNH indicators and weight
were selected for the GNH Index according to:
1) Their values (survey *)and reliable published research
on well-being
2) Statistical properties (can be measured)
3) Accuracy across time
4) Policy relevance
5) Clarity of interpretation
* Over 120 questions from a survey
done in Bhutan.
.

23. Nine Domains 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
.

24. GNH
Psychological
Wellbeing
•Life satisfaction
•Positive emotions
•Negative emotions
•Spirituality
Health
•Mental health
•Self reported health
status
•Healthy days
•Disability
Time Use
• Work
• Sleep
Education
•Literacy
•Schooling
•Knowledge
•Value
Cultural
Diversity and
Resilience
•Speak native
Language
•Cultural Participation
•Artistic Skills
•Driglam Namzha
Good Governance
•Gov’t performance
•Fundamental rights
•Services
•Political Participation
Community
Vitality
•Donations (time &
money)
•Community
relationship
•Family
•Safety
Ecological
Diversity and
Resilience
•Ecological Issues
•Responsibility
towards environment
•Wildlife damage
(Rural)
•Urbanization issues
Living Standards
•Assets
•Housing
•Household per capita
income
.

25. .
Domain Indicators Weight Domain Indicators Weight
Psychological wellbeing Life satisfaction 33% Good Governance Political participation 40%
Positive emotions 17% Services 40%
Negative emotions 17% Governance performance 10%
Spirituality 33% Fundamental rights 10%
Health Self reported health status10% Community vitality Donation (time & money) 30%
Healthy days 30% Safety 30%
Disability 30% Community relationship 20%
Mental health 30% Family 20%
Time use Work 50% Ecological diversity Wildlife damage 40%
Sleep 50% & resilience Urban issues 40%
Education Literacy 30% Responsibility towards environment10%
Schooling 30% Ecological issues 10%
Knowledge 20% Living Standard Per capita income 33%
Value 20% Assets 33%
Cultural diversity Zorig chusum skills (Artisan)30% Housing 33%
& resilience Cultural participation 30%
Speak native language 20%
Driglam Namzha (Etiquette20%
Weights on the 33 Indicators

26. .
Part I:
1. GNH concept
2. GNH domains
3. GNH survey
4. 33 indicators
5. Weighting
6. GNH thresholds-
sufficiency & happiness
7. GNH Index methodology

27. .
How much is enough?
The GNH Index uses two kinds of thresholds:
1. Sufficiency thresholds
2. Happiness threshold
Sufficiency thresholds:
• Shows how much a person needs in order to enjoy ‘sufficiency”’
• How much is enough to create a happiness condition.
• Each of the 33 GNH indicators has a sufficiency threshold.

28. Sufficiency thresholds were set by:
 International standards (based on studies of well-being)
National standards (based on studies done in Bhutan)
 Normative judgments (based on their history, culture, values
and common sense= relevant to Bhutanese context)
 Participatory meetings
.

29. .
Indicator Sub-indicator Question Response range Sufficiency
Life
satisfaction
Health How satisfied are you with your health?
5 (Low-worst)
To
25 (High
satisfaction)
20-25
Standard of living …with your standard of living?
Occupation …with your major occupation?
Family relationship …with your family relationship?
Work life balance …with your work life balance?
Spirituality
Spirituality How spiritual do you consider yourself?
1 (Not at all)- 4
(Very spiritual)
4 (Very
spiritual)
Karma
Do you consider Karma in the course of
your daily life?
1 (Not at all)-4
(Always)
4 (Always)
Prayer recitation How often do you recite prayers?
1 (Not at all)- 4
(Regularly)
4 (Regularly)
Meditation How often do you meditate?
1 (Not at all)- 4
(Regularly)
3 (Occasionally)
or 4 (Regularly)
Positive
emotions
Calmness During the past few
weeks, how often do you
experience __(Emotion)_?
5 (Low )-20
(High positive
emotion score)
15-20
(Positive
emotion
score)
Compassion
Forgiveness
Contentment
Generosity
Psychological wellbeing

30. .
Indicator Sub-indicator Question Response range Sufficiency threshold
Donation
(time &
money)
Donations In the past 12 months, did you donate
money?
Amount of
donation made in a
year
More than 10% of
annual household
income
Days volunteer During the past 12 months, how many
days did you volunteer?
Number of days
volunteered
National average-
More than 17 days
Community
relationship
Sense of belonging How would you describe your sense of
belonging to your local community?
1 (Weak)-3 (Very
strong)
3 (Very strong)
Trust in neighbours How much do you trust your
neighbours?
1 (Trust none of
them)-4 (Trust
most of them)
4 (Trust most of
them)
Family
Family members care
about each other
Do the members of your family care
about each other?
18 (High family
index score)-6(Low
family Index Score)Wish you were not
part of your family
Do you wish you were not part of your
family?
Feel like a stranger in
your family
Do you feel like a stranger in your
family?
Enough time to spend
with your family
Do you get enough time to spend with
your family?
Lot of understanding
in your family
Is there a lot of understanding in your
family?
Family is a real
source of comfort to
you
Do you think family is a real source of
comfort to you?
15-18 (Family
index score)
Safety
Victim of crime Have you been a victim of crime in the
last 12 months?
1 (Yes)-2 (No) 2 (No)
Community vitality

31. .
Indicator Sub-indicator Question Response range (worst-best) Sufficiency threshold
Ecological
issues
Pollution of rivers and
streams
Is ___ISSUE________
an environmental issue
of concern in your
community?
1 (Major concern)-4
(Not a concern)
4 (Not a concern)
or 3 (Minor
concern) or 2
(Some concern)
in at least 6
ecological issues
Air pollution
Noise pollution
Absence of waste disposal
sites
Littering
Landslides
Soil erosion
Floods
Responsibility
towards
environment
Feelings of responsibility
towards environment
Do you feel responsible
for conserving the natural
environment?
1 (Not at all
responsible)-4 (Highly
responsible)
4 (Highly
responsible)
Wildlife
damage (Rural)
Wildlife problems
Was wildlife a constraint
to your crops during the
last year?
1 (Major constraint)-4
(Not a constraint)
1 (Major constraint)
& 1 (A lot) or 2
(Some)
Crop loss
In the past one year, has
your crops been damaged
by wild animals?
1 (A lot)-4 (Not at all)
Urbanization
issues Traffic congestion
Is ___ISSUE________ an
environmental issue of
concern in your
community?
1 (Major concern)-4
(Not a concern)
4 (Not a concern) or
3 (Minor concern)
or 2 (Some concern)
in at least 3
urbanization issues
Absence/inadequate
green spaces
Lack of pedestrian
friendly streets
Urban sprawl
Ecological diversity and resilience

32. .
2010
0%
20%
40%
60%
80%
100%
120%
Value
Safety
Speaknativelanguage
Family
Disability
Mentalhealth
Urbanizationissues
Responsibilitytowards…
Lifesatisfaction
Governmentperformance
Healthydays
Assets
Selfreportedhealthstatus
Ecologicalissues
Sleep
Negativeemotions
Communityrelationship
Fundamentalrights
Artisanskills
DriglamNamzha
Positiveemotions
Wildlifedamage(Rural)
Politicalparticipation
Householdpercapitaincome
Spirituality
Literacy
Housing
Donations(time&money)
Work
Services
Percentage of people enjoying sufficiency
Most Bhutanese enjoy
sufficiency in value, safety,
native language, family,
mental health, urbanization
issues, responsibility
towards environment,
satisfaction in life,
government performance,
healthy days and assets

33. .
0%
20%
40%
60%
80%
100%
120%
Value
Safety
Speaknativelanguage
Family
Disability
Mentalhealth
Urbanizationissues
Responsibilitytowards…
Lifesatisfaction
Governmentperformance
Healthydays
Assets
Selfreportedhealthstatus
Ecologicalissues
Sleep
Negativeemotions
Communityrelationship
Fundamentalrights
Artisanskills
DriglamNamzha
Positiveemotions
Wildlifedamage(Rural)
Politicalparticipation
Householdpercapitaincome
Spirituality
Literacy
Housing
Donations(time&money)
Work
Services
Schooling
Percentage of people enjoying sufficiency
50-60% of Bhutanese enjoy
sufficiency in ecological
issues, negative emotions,
community relationship,
Artisan skills, Driglam
Namzha etc.
2010

34. .
Value
Safety
Speaknativelanguage
Family
Disability
Mentalhealth
Urbanizationissues
Responsibilitytowards…
Lifesatisfaction
Governmentperformance
Healthydays
Assets
Selfreportedhealthstatus
Ecologicalissues
Sleep
Negativeemotions
Communityrelationship
Fundamentalrights
Artisanskills
DriglamNamzha
Positiveemotions
Wildlifedamage(Rural)
Politicalparticipation
Householdpercapitaincome
Spirituality
Literacy
Housing
Donations(time&money)
Work
Services
Schooling
Culturalparticipation
Knowledge
Percentage of people enjoying sufficiency
Less than 50% of Bhutanese enjoy sufficiency in
literacy, housing, donations, work, services,
schooling, cultural participation and knowledge
2010

35. .
Who is considered Happy?
The GNH Index uses two kinds of thresholds:
1. Sufficiency thresholds
2. Happiness threshold
Happiness Threshold= 66% of domains
A person who enjoys sufficiency in more than
six (6) of the nine domains is considered happy.

36. In 2010 40.8% of Bhutanese
enjoy sufficiency in
six or more domains
at the same time.
According to the GNH Index, they are
‘happy’.
.

37. .
Part I:
1. GNH concept
2. GNH domains
3. GNH survey
4. 33 indicators
5. GNH thresholds-sufficiency &
happiness
6. Weighting
7. GNH Index methodology

38. .
The GNH Index is based on the Alkire & Foster
(2007, 2011) methodology. In this methodology
we:
1. Choose indicators
2. Apply weights for each indicator
3. Apply sufficiency thresholds (who has enough)?
4. Apply the happiness threshold
5. Identify two groups:
1. Happy people
2. Not-yet happy people (policy priority)

39. .
GNH Index: Formulae
The GNH Index Formulae is:
𝐺𝑁𝐻 = 1 − 𝐻 𝑛 × 𝐴 𝑛
Where
𝐻 𝑛 = percent of not-yet-happy people
= 1-𝐻ℎ or (100% - % happy people)
𝐴 𝑛= percentage of domains in which
not-yet-happy people lack sufficiency

40. .
GNH Index: Formulae
The GNH Index Formulae is:
𝑮𝑵𝑯 = 𝟏 − 𝑯 𝒏 × 𝑨 𝒏
So in Bhutan 2010, the GNH was:
GNH = 1-(.591 x .434) = 0.743
It ranges from 0 to 1. A higher number is better. It reflects the percentage of
Bhutanese who are happy and the percentage of domains in which not-yet-happy
people have achieved sufficiency (headcount and intensity).

41. The Gross National
Happiness Index (GNH)
The Centre for Bhutan Studies
2011
.

42. Bhutan Population
The total population in Bhutan was last recorded at 770,000 people in 2014 from 200,000 in 1960, changing 235%
during the last 50 years.
World Bank

43. The Gross Domestic Product (GDP) per capita in Bhutan
$2,068.37 US in 2014. GDP per capita in Bhutan, World Bank ($2,611.74 according to Bhutan National Statistic Bureau).
Per capita GDP is used as an indicator of standard of living. Higher per capita GDP = higher standard of living. A
rise in per capita GDP signals growth in the economy and tends to translate as an increase in productivity.
In just over 5 years, from 2007-2012, poverty in Bhutan was reduced by almost half - from 23% in 2007 to 12 % in
2012. (World Bank, Sept. 2014). Supposedly, it is one of the world’s poorest and least developed countries.

44. Bhutan Government Debt to GDP
Bhutan recorded a Government Debt to GDP of 101.30 % of the country's GDP in 2014.
Government Debt to GDP in Bhutan averaged 70.98 percent from 1995 until 2014, reaching an all
time high of 101.30 percent in 2014.
Royal Monetary Authority of Bhutan.
Low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay
back debts, without incurring further debt. A debt-to-GDP ratio of 60% is quite often noted as a OK limit
for developed countries. Crossing this limit might threaten fiscal sustainability. For developing and
emerging economies, 40% is the suggested debt-to-GDP ratio.

45. Resources
De Graaf, J. (2011). What’s the economy for anyway? New York, NY: Bloosmbury Press.
NDP Steering Committee and Secretariat. 2013. Happiness: towards a new development paradigm. Report of the
Kingdom of Bhutan.
Schumacher, E.F. (1973). Small is beautiful: Economics as if people mattered. New York, NY: Harper & Row,
Publishers, Inc.
United Nations. (2013, 16 January). Happiness: towards a holistic approach to development. General Assembly,
Sixty-Seventh session Agenda Item 14
Victor, P. (2010). Questioning economic growth. Nature 486(18).
http://www.kingdomofbhutan.com/
Note: I do not claim any right to this presentation. This is adopted from a presentation made by S. Sannitti and M.
Juncos at York University- December 2015. I decided to publish the important sections for the benefit of all.