Well-being measures and the future of EU Cohesion Policies

1. Well-being measures and the future of EU Cohesion Policies Perugia, Italy, 29 April 2010 Marco Mira d’Ercole OECD Statistics Directorate

2. Two part presentation • OECD work on measuring well-being and progress • Implications for EU regional policies

3. 1. OECD work on measuring progress Long tradition: • 2001 publication ‘The Well-being of Nations’, 2005 report on ‘Alternative Measures of Well-being’ • 2007, OECD launched the Global Project, in partnership with other IGOs and contributed to other initiatives (including Stiglitz Commission) Today: • An increasing number of high-level initiatives in individual countries (France, Germany, Japan, Italy, Korea, Slovenia, Spain, the United Kingdom, China) and internationally (G20, EU Communication) • One of six OECD priorities in 2011-2012, with substantial work programme in various Directorates

4. Well-being Framework OVERALL HUMAN WELL-BEING Quality of Life Material Living Conditions Work and life balance Health status Education and skills Social connections Civic Engagement and Governance Environmental Quality Personal Security Subjective well-being Income and wealth Jobs and earnings Housing GDP Regrettables SUSTAINABILITY OF WELL-BEING OVER TIME Requires preserving different types of capital: Natural capital Economic capital Human capital Social capital

5. 1. OECD work on measuring progress Ongoing OECD work under three pillars • Methodological research to improve existing statistics and develop new ones where there are gaps, in the three areas of: • material well-being (disparities in SNA, standards for household wealth, measures of non-market production of household services) • quality of life (guidelines on SWB, social relations, vulnerability) • sustainability (human capital, carbon footprint, intangible capital) • Disseminating existing well-being statistics in How’s Life? publication • Continued dialogueand outreach towards emerging and developing countries and civil society • 4th OECD World Forum, New Delhi, fall 2012 • Regional conferences Latin America, Asia, Africa, Europe (2011/ 2012)

6. 2. Implications for cohesion policies • Better well-being measures is not an end but a mean to better policies and better outcomes: different ways in which this can be achieved The ‘virtuous policy cycle’

7. 2. Implications for cohesion policies • One direct way is through the use of outcome indicators as targets for policies: “a systematic and rigorous use of well-defined outcome indicators is a very powerful tool for increasing policy effectiveness” (HLG reflecting on Future of Cohesion Policy) • Some of the details of the proposal could be controversial: • Selection of targets (i.e. not all ‘outcomes’ indicators are about people, and not all well-being outcomes are ‘amenable to policy interventions’) • balance between top/down and bottom/up approaches (i.e. outcomes chosen by each region or based on EU priorities, EU2020); • requirement of ‘comparability’ of indicators among the ‘methodological principles’ (e.g. allocation of funds based on achievement of targets?) • But the re-orientation of cohesion policies described by HLG is a radical one (with huge potential for the ‘measuring progress’ agenda)

8. 2. Implications for cohesion policies Two main challenges: • Building a statistical infrastructure for regional statistics • Better metrics for some of the main factors of cohesion policies

9. 2. Implications for cohesion policies Building a statistical infrastructure for regional statistics • Most official statistics do not provide regional estimates for key indicators at conventional statistical levels: when the investment is made, the data show huge sub-national differences: INSERT 2 • Because of competing priorities (e.g. extending official statistics to other) and tighter NSOs budgets, ‘regionalisation’ unlikely to happen at the pace needed: HLG suggestion that “cohesion policies.. finance move in this direction” is a critical one • Building a statistical system at sub-national level requires combining different sources (not only surveys, but also administrative data, data-linking, modelling, GIS data): INSERT 3

10. 2. Implications for cohesion policies Better metrics needed for some of the aspects that matter most for cohesion policies • HLG emphasis on “using available data” and on need that “selection and production of indicators should not become too burdensome”: legitimate but… • Some of the aspects that matter most for cohesion policies are not adequately measured in official statistics (e.g. quality of public services, communities ties, opportunities for political participation) • Some of the critical concepts (e.g. income poverty) will require new thinking (e.g. national /regional thresholds? regional PPPs? Income including/excluding in-kind social transfers? ) • Local governments have role to play to trigger production of better statistics in these areas; important as not all ‘aspects’ of a given outcome are supported by indicators; risk of distorting decisions towards what is measured (people rather than places) NSI can not respond alone to the increasing demand of information (ex. Social capital)

11. Conclusions • “Better statistics for better policies” (OECD Statistics Day, October 2010) “Better policies for Better Lives” (OECD 50th Anniversary) • “Good statistics are much cheaper than bad policies” Thank you marco.mira@OECD.org