Commission on the Measurement of Economic Performance and Social Progress

The Commission on the Measurement of Economic Performance and Social Progress ( CMEPSP ), referred to by their leaders as the Stiglitz- Sen -Fitoussi Commission was a commission of experts that examined on behalf of the French government of Nicolas Sarkozy, the means by which prosperity and social allowed them to measure progress without unilaterally based on income parameters such as gross national product. The Commission was formed in February 2008 and appointed Joseph E. Stiglitz as its chairman. Amartya Sen acted as a scientific consultant, and the co-ordination took over the French economist Jean -Paul Fitoussi. The final report of the Commission was submitted in September 2009. In addition, there is an opinion of the three leading personalities, which deals in particular with the task against the backdrop of the financial crisis in 2007.

Executive Summary

In the summary of the final report emphasizes that the importance of statistical indicators for the assessment of measures for the development of society increases more and more. Because what is measured, influences the actions. Incorrect measurements thus lead to an incorrect policy. Existing statistics on growth, unemployment or inflation often do not correspond to the perceptions of the citizens.

For example, the growth of GDP is not an adequate indicator, if at the same time increasing inequality and a substantial part of the population does not benefit from growth. More traffic jams on the highways leading for example to increased fuel consumption, which is reflected in an increase in GDP, although the well-being of those affected has decreased and they have less money for the rest of consumption available. GDP as an indicator is no information about air pollution or climate change. Task therefore is to look for a meaningful method of measuring welfare, which also takes into account the environmental and social aspects and the issue of sustainability.

The importance of the task demonstrated by the fact that the financial crisis in 2007 and then following the economic crisis not predicted by previous reports and all political decision-makers were surprised by the development. However, one must not overestimate the prognosis opportunities for such relationships. Nevertheless, the report shows that you may provide clues to changes in consumption due partly different data and new indicators.

For the presentation of the topics, the Commission has established three working groups. The main points were:

• Questions of classical measurement of the social product
• Quality of life
• Sustainability

As a result of its work, the Commission speaks twelve basic recommendations:

Recommendation 1: When measuring wellbeing ( wellbeing ) the income and consumption should be recorded instead of the previous measurement of the production.

GDP expresses the value of production for the market in monetary units. However, this value can not express the prosperity of a society. The actual standard of living resulting from the income. The production value may differ significantly, for example, price changes or exports of income and consumption.

Recommendation 2: Placing more focus on the perspective of households

Studies have shown that real household incomes have evolved partly as fast as GDP. One major cause is the government's share and the fact that the state is increasingly services, particularly in education and health, provides that were previously provided in the private sector and for no consideration.

Recommendation 3: Consideration of the relationship between income and consumption with the existing assets

Income and consumption are indeed fundamental for the assessment of living standards, but saving operations or consumption of assets can distort the image. This is also true at the level of national economies. To assess need for balance sheets, in which the assets are acquired. The assessments of the assets should be supported with indicators of sustainability and risk. These non-monetary indicators can be useful.

Recommendation 4: More attention on income distribution, the distribution of wealth and the distribution of consumption

Average or total quantities are not sufficient to assess the existing conditions. So can be connected without effect in a part of the population an average growth of income. To this end, more information about the conditions in the lower and upper portions of the population are necessary.

Recommendation 5: Extension of the income measures on informal activities

Over time there have been major shifts. Today, more and more services on the market are offered that have taken place earlier in the private sector and not for remuneration, such as the care of elderly and sick. By now these activities are recognized in the income statistics, increased the reported wealth, although objectively there is no change. This also the comparison between countries is concerned, in the less developed countries the share of goods directly generated in households is much higher. As a measure of well-being is also well to pay attention to the available free time.

The Commission emphasizes that the welfare ( well being ) is multi-dimensional to be determined. As dimensions that can not be expressed solely by the income, calls them:

Recommendation 6: The quality of life depends on the objective conditions and the realization opportunities (capabilities ) of the people. It should be made steps to improve the indicators on health, education, personal activities and environmental conditions of the people. Above all, significant efforts should aim to align, allow robust and reliable indicators for social connections, political voting rights and uncertainty statements about life satisfaction, to develop and implement.

Relevant to the quality of life information go beyond the self-assessment and perception of interested parties, including the capabilities ( functionings ) and liberties. In fact, significant are the chances of realization of the man, that is the extent of their possibilities and the freedom to choose within this scope. To capture the dimensions of well -being requires not only objective, but also subjective measurements. The existing gaps in the information on here must be recorded and the statistical base must be extended and customized.

Recommendation 7: The quality of life indicators in all the dimensions mentioned should assess inequalities in a comprehensible manner.

The indicators should be used not only over time but also for interpersonal comparison of socio -economic groups, gender and generations, giving special attention should be paid to current developments such as immigration.

Recommendation 8: The studies should be designed so that the connections of the various areas of quality of life for the individual can be evaluated, and that information should be incorporated into the design of the measures in the various fields.

By the production of cross-links the effects of individual measures of the quality of life can be detected in other areas. Therefore, data should be collected in the studies of various fields that allow the production of cross-connections.

Recommendation 9: Statistical offices should provide the necessary information so provided that the interconnection between the different dimensions of quality of life together and the formation of various indices is enabled.

The needs of the statistician is not only in a variety of indicators, but also in the possibility of the indicators selected to merge so that the effect of individual effects can be analyzed in an overall indicator.

Recommendation 10: Both objective and subjective measurements provide key information on the quality of life. Statistical authorities should set up surveys that deal with the evaluation of life, with joyful ( hedonistic ) experiences and preferences of the people.

Research has shown that there are also ways to define meaningful and trustworthy degree for the subjective assessment of the quality of life. The subjective well-being is determined by various aspects such as the cognitive evaluation of one's life, happiness, satisfaction, as by positive emotions such as fun and pride, or by negative emotions such as grief and anxiety which can all be detected in measurable terms. The previous successful results in smaller studies should be put on a broader basis.

Recommendation 11: The assessment of sustainability requires a well - identified dashboard of indicators. The distinctive feature of the components of this dashboard should be that they can be interpreted as deviations from an existing "stock" ( "stock " = existing assets ). A monetary index of sustainability has its place in such a dashboard, but the current state of the meaningfulness of ( state of the art ) he should stay focused on the monetary aspects of the principle of sustainability.

The measuring and evaluating the sustainability is one aspect of paramount importance for the Commission. However, this is difficult due to the complexity of the issue and is even more difficult because between the different countries there is still no uniformity for the determination of sustainability. Sustainability must be examined separately in addition to the current study of well-being. Mixing of the issues can lead to incorrect conclusions. In the indicators for the sustainability of the various stocks of natural resources, human, social and physical capital must be expressed. The reduction of sustainability indicators on monetary values ​​fails because there is no assessable with a market value basis for various aspects. Even if there were such values ​​would also be no assurance that the current valuation of the view in the future corresponds.

Recommendation 12: The environmental aspect of sustainability requires a separate follow-up study, based on a well- selected number of physical indicators. Above all, there is a need for a clear indicator that (for example climate change or overfishing ) describes the proximity to dangerous levels of environmental pollution.

To select appropriate indicators on the one hand it requires the expertise of scientists, on the other hand, the requirements are global, so that the actions of individual national statistical authorities must remain insufficient.

For another approach, the Commission stressed that they considered their report as a beginning, the lead to further research and should be further developed through discussions among experts.

Commissioners

• Bina Agarwal, University of Delhi, India
• Kenneth Arrow, Stanford University, USA
• Anthony Atkinson, Nuffield College, UK
• François Bourguignon, Paris School of Economics
• Jean -Philippe Cotis, Insee (National Bureau of Statistics of France ), Paris
• Angus Deaton, Princeton University, USA
• Kemal Dervis, United Nations Development Programme (UNDP ), New York
• Marc Fleurbaey, University Paris 5, France
• Nancy Folbre, University of Massachusetts, USA
• Jean Gadrey, University of Lille, France
• Enrico Giovannini, OECD, Paris
• Roger Guesnerie, Collège de France, Paris
• Geoffrey Heal, Columbia University, New York
• James Heckman, University of Chicago, USA
• Claude Henry, Institut d' Etudes Politiques de Paris
• Daniel Kahneman, Princeton University, USA
• Alan B. Krueger, Princeton University, USA
• Justin Yifu Lin, World Bank, Washington, D.C.
• Andrew J. Oswald, University of Warwick, United Kingdom
• Robert D. Putnam, Harvard University, USA
• Nick Stern, London School of Economics, UK
• Philippe Weil, Institut d' Etudes Politiques de Paris