How to Get “Beyond GDP”

The world needs a macroeconomic framework that allows nations to manage their economy sustainably - i.e. actively ensuring that all key elements of the economy are aligned behind a sustainable economic framework with a clear set of indicators.

More specifically, we need a ‘quality adjusted’ GDP that is linked to transactions accounting for how much social and natural capital they are building and incorporating the future consequences of present-day activities. In reality, this approach will shift the focus from solely quantifying financial outcomes to understanding how the economy benefits people, regardless of where they live, while ensuring it does not harm the planet. Benefits would include positive life outcomes such as income, good health and education as well as “increased agency” i.e. the capacity of citizens to live the life they value.

The concept of “quality-adjusted GDP” diverges significantly from current mainstream macroeconomic thinking. Today, GDP growth (growth in flow) is king and does not recognise that economic flow depletes our natural resources, degrades biodiversity systems, continues to emit CO2 at dangerous levels and increases inequality.

While financial flows are recognised through GDP - material depletion, human and natural capital degradation, and increased CO2 in the atmosphere are all examples of negative changes to “stock” (defined as “resources held for future benefit”). What is needed is a way to understand the connection between “flow” and “stock” in the economy - so we can manage growth without destroying “stock” at levels that put our existence at risk.

What is Needed??

The United Nations is advocating for a new macroeconomic approach going beyond GDP under the initiative titled “Valuing what Counts” and has outlined a process for moving forward. On 22nd September 2024, the United Nations General Assembly adopted the “Pact for the Future” which specifically addresses how to move beyond GDP. Here is the relevant paragraph.

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Action 53. We will develop a framework on measures of progress on sustainable development to complement and go beyond gross domestic product.

81. We recognize that sustainable development must be pursued in a balanced and integrated manner. We reaffirm the need to urgently develop measures of progress on sustainable development that complement or go beyond gross domestic product. These measures should reflect progress on the economic, social and environmental dimensions of sustainable development, including in the consideration of informing access to development finance and technical cooperation. We decide to:

(a)???Request the Secretary-General to establish an independent high-level expert group to develop recommendations for a limited number of country-owned and universally applicable indicators of sustainable development that complement and go beyond gross domestic product, in close consultation with Member States and relevant stakeholders, taking into account the work of the Statistical Commission, building on the global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable Development and to present the outcome of its work during the eightieth session of the General Assembly;

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(b)?? Initiate a United Nations-led intergovernmental process following the completion of the work of the independent high-level expert group in consultation with relevant stakeholders, including the Statistical Commission, international financial institutions, multilateral development banks and regional commissions, in line with their respective mandates, on measures of progress on sustainable development that complement or go beyond gross domestic product, considering the recommendations of the Secretary General’s high-level expert group.

In the Secretary General’s input to the discussion, he highlights the following point?

“...the aim should not be to establish a single composite indicator that goes beyond GDP. An indicator of everything would summarize too much and reveal too little to be able to adequately inform policy. Instead, I propose the selection of a set of core metrics that would be assessed, developed and selected through a scientific, multidisciplinary process…”?

There is not yet a proposed UN-based fixed formula but the approach of “changing the macroeconomic framework and the indicators simultaneously,” makes the UN-led initiative particularly promising.??

Furthermore, after studying the background documentation and drawing on conversations, we will now present, as an experiment, “beyond GDP” metrics broken down into four broad categories of “core metrics” under the following headings:?

1. Gross Domestic Product
2. Human Well-Being and Agency
3. Degree of Inequality
4. Future-Proof Economy

Figuratively, what is being proposed could be described as a macroeconomic framework with four “dials” on the macroeconomic dashboard.

The first dial measures the overall status of the economic activities - better known as GDP. The second dial measures human well-being and agency, while the third dial measures distribution and degree of inequality. Finally, a fourth dial assesses whether the resource pressure on the economy is within planetary boundaries and whether the human capital of the country is rising/being depleted.

A sustainable economy is a well-managed economy where each of the four dials on the dashboard shows progress. Such an economy is showing growth, and is providing a better quality of life for its citizens while taking a regenerative approach to both human capital and natural resources.

Borrowing from innovation approaches, the idea is to explore if it is possible to create a prototype dashboard - a Minimum Viable Product (MVP) - that would allow us to explore what is available in terms of datasets to “measure what counts”. Such a dashboard would help us understand the new perspectives and create insights that may enable the effective management of a sustainable economy.

Specifically, what public datasets are available as a means to measure the economy? We will highlight a few below, but be sure to explore all 24 database links provided in our 4 Dials Beyond GDP Datasets Overview.?

Dial 1: Gross Domestic Product

Global datasets on GDP calculations are being published nationally, as well as by the World Bank and the UN. There are continued efforts to refine the understanding and measurement of GDP.

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Dial 2: Human Well-Being and Agency?

The Human Development Index could be used to measure human well-being in the form of educational attainment and health. This index is a global and well-established dataset published by UNDP since the early 1990s. It can also be broken down by gender and by regions and thus provide relevant information for “dial 3” (see below).

There are datasets capturing levels of human agency and empowerment. While they are less “mature” than the Human Development Index, they do point to the possibility of establishing international standards for understanding and measuring human agency. The Global Well-being initiative (Gallup) and the International Social Survey program are two such datasets.

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Dial 3: Degree of Inequality?

The World Inequality database, Gender Development Index and the Multidimensional Poverty Index all provide data on the distribution of income and wealth over time, both within and between countries. These indexes provide meaningful and actionable insights into trends and levels of inequality

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Dial 4: Future-Proof Economy?

If we apply the Brundtland definition of sustainability “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” - it is important to “future-proof” the economy.

One way to do that is to look at the “Planetary Boundary Dataset” (Stockholm Resilience Center/ Potsdam Institute for Climate Impact Research). This global dataset identifies limits to how much pressure our economy can put on the planet in the form of pollution (e.g. CO2 emissions) and resource use (e.g. land, water) and it defines the boundaries or the carrying capacity of planetary systems. When the aggregate pressure exceeds the carrying capacity, it increases risks that lead to consequences over time.?

The World Bank Human Capital index provides a global dataset that captures to which extent human capital is “created” or destroyed in the economy.

The Biocapacity Accounts measures the productivity of a region’s natural resources in relation to human demand, allowing for assessments of ecological sustainability and resource consumption.

As for emissions, the Global Carbon Atlas provides a platform to explore and visualize the most up-to-date data on carbon fluxes resulting from human activities and natural processes.?

Some Areas in Need of Urgent Improvements

There are some areas where improvements would significantly strengthen the “dial” approach. Just to mention two:

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Dial 1: On GDP itself, it would be the inclusion of what is known as the “care economy” - the unpaid care that individuals provide to each other - mainly within families. Ideas for how to include the care economy exist and integration of these ideas would result in a GDP giving a more precise picture of the economy (flow side).?

Dial 2: Human well-being, in particular mental health and sense of agency, needs more development. Survey methodologies exist but more work needs to be done to develop them into more globally accepted and applicable standard approaches before we can use them effectively for macroeconomic management.

If we shift from an economic system, where growth in consumption equals increased human well-being, towards a more multi-dimensional and human-centric approach, what kind of management framing would be effective for a given society?

One answer would be the frame provided by the 17 Sustainable Development Goals - with sub-goals in the relatively comprehensive set of indicators. Many countries use this frame today to guide national development and they typically report every fourth year to the UN through the so-called Voluntary National Review process. For countries that apply the Sustainable Development Goals, the absence of a “beyond GDP” approach constitutes a barrier to effective leadership. In other words, leaders of these countries do not have access to the right kind of multi-dimensional economic data and analytical tools required for effective macroeconomic management.

Some Concluding Thoughts

At the COP27 (held in 2022), UN Secretary-General Guterres stated: “We are on a highway to climate hell with our foot on the accelerator,” - central to his metaphor is the insatiable appetite for economic growth that dominates the global economy and how countries manage themselves. Going beyond GDP would not only support a journey off the highway to hell, but also allow for economic management and investments leading to prosperity for current and future generations.

With the “four dials on a dashboard beyond GDP model”, we have shown that for each of the four perspectives, meaningful datasets exist available for use and further development. Furthermore, the globally accepted 2030 agenda and its 17 Sustainable Development Goals provide a ready blueprint that calls for the kind of measurements that the beyond GDP approach could provide.

The fact that we use the concept of a minimum viable product (MVP) suggests that there is significant room for further development - whether by improving existing datasets, applying alternative data resources, or advancing the theoretical framework. In that spirit, we look forward to seeing the Secretary General’s proposal - a year from today - at the 80th General Assembly in September 2025 outlining the recommendations for “going beyond GDP”.

With this article, we aim to demonstrate that it is indeed possible to go “beyond GDP” and, in doing so, more effectively “value what counts.” The question then becomes: what should we call this new macroeconomic framework? Perhaps “GDP+” or “GDP Plus”—or perhaps an entirely new term that better reflects what the world is striving to achieve.?

In our view, to move forward there is an urgency to accept a new innovative macroeconomic mindset and apply multidimensional economic perspectives? while we await the outcomes of the UN-led deliberations.

We therefore urge countries to act now by establishing a minimum viable product (MVP) version of GDP+. This would help get the economy off the highway to hell and start steering it in a sustainable direction. Adopting the MVP approach would also enable these countries to explore the benefits of increased circularity, move towards regenerative production and see if there are cash flows associated with positive externalities derived from more inclusion and reduced inequality.

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Jens Wandel, President of the Danish UN Association

Christian Wandel, Sustainability Analyst