How to Monitor an Economy’s Contribution to Meeting Basic Needs

Economic outcomes are intermediate between economic outputs and their impact on people’s lives. They represent the major way in which economic activity positively impacts health and wellbeing. The monitoring of such intermediate outcomes has useful measurement properties, because they apply to the whole population, they are present early and allow preventive measures to be undertaken, and they directly indicate where intervention is necessary thereby helping to set the policy agenda. A provisional list of possible indicators for high-income countries is presented. The choice of items is based on the literature on human needs, and on the literatures on impact—the social determinants of health, and the emerging evidence on the economic determinants of subjective wellbeing. Data on these items are already collected, although some development work is needed to put them in the required format for the proposed monitoring system. It is desirable that the list of economic outcome measures should be standardised internationally, albeit with separate lists for different levels of economic prosperity. Many items are expressed in terms of “access”, which combines availability and affordability; the criterion is whether or not the need is met, irrespective of how this is achieved. Insecurity is another pervasive issue, because of its impact on people’s quality of life. Each item would be presented as the proportion unfulfilled, the proportion of the population who lack a particular amenity. This metric corresponds to the commitment to leave no one behind, i.e. the value system that everyone’s basic needs should be met, and is readily understood by most people. This implies that an agreed threshold is required for each item. Economic outcomes would be presented as a dashboard for public discussion and policy development, and as the aggregate measure, the Index of Economic Outcomes (IEO), for the overall evaluation of economic success. The use of the proportion unfulfilled highlights inequalities, at least at the lower end of the income scale, implying that there is no need for a separate measure of inequalities as there is with per capita GDP (and with most other measures). It is compatible with different degrees of inequality higher up the scale, and therefore with a range of political views, implying that it can command wide popular support. An important implication of the proportion unfulfilled metric is that it requires representation of the whole population, including “hard-to-reach” groups. The focus on economic outcomes that meet basic needs while minimising environmental damage corresponds to the perspective of the UN Sustainable Development Goals. The development work involved in establishing the IEO and its component items in the rich world could contribute to future work on the monitoring system for the Goals.