The Gross Domestic Product (GDP) has long been heralded as the standard measure of a nation’s economic health and thus a primary goal for all states. However, its narrow focus on economic output fails to capture the complexity of human and planetary well-being and perpetuates patriarchal and colonial ideologies. These shortcomings have spurred demands to move beyond GDP.
GDP was never meant to be a signifier of well-being, not for the economy and definitely not for people and planet. It simply measures the market value of all final goods and services produced within a country in a given period. When it comes to GDP growth, $1000 spent on white phosphorous is just as positive as $1000 worth of healthcare. It is blind to natural capital like the carbon sink services of the Amazon rainforest, informal or unpaid work such as the 16.4 billion hours of unpaid care work performed every day, and non-transactional products such as breast milk which is key to a child’s health and development.
GDP grows when rainforests are burnt down. It grows when a tsunami devastates a sinking nation. It grows when wars are waged. This leads to a fundamental question for 21st Century politics; can we, and will we, ever truly grasp the depth of these atrocities and take political action against them if our main measure of well-being continues to grow, not just despite them, but because of them?
Who decides what we measure?
As Stiglitz famously remarked “what we measure affects what we do, and if we measure the wrong thing, we will do the wrong thing.” GDP’s myopic focus on economic growth at all costs perpetuates policies that prioritize short-term economic growth over long-term environmental sustainability, contributing to the ongoing climate crisis and undervalues the contributions of women, and other marginalised groups, reinforcing inequalities.
Moreover, it reflects and reinforces colonial legacies. Walter Rodney has highlighted that GDP and other Western economic frameworks ignored and eroded indigenous standards of what can and should be valued. He went on to link this to the subordination of African women as their work became deemed as ‘traditional’ and ‘backward’.
African scholars have linked Western demands for GDP growth to the exploitation of African land and displacement that impacts food insecurity, poverty and climate vulnerability to this day. Similarly, colonial Britain’s desire for cash crops along the Indus River displaced agropastoralists, damaged biodiversity and erased Indigenous knowledge systems which still leave the area and local communities vulnerable to flooding today.
Not only has GDP robbed these nations of agency when it comes to measuring their success, but it has left their people and land vulnerable to crises they did not create. Instead, they are victims to an economic system that justifies the exploitation of resources and labour in the Global South to fuel growth in the Global North.
Furthermore, GDP growth has been instrumentalized to legitimise power differentials in international relations influencing voting rights in multilateral institutions; borrowing capacity; access to international markets and foreign aid; leverage in trade negotiations; and the measurement of the Sustainable Development Goals (SDGs). These institutions tie power to GDP growth, incentivising policies that prioritize GDP growth, often at the expense of social welfare and environmental protection, including policies such as austerity and trade liberalisation.
The cost of GDP-focused policies
Austerity measures are frequently imposed by the IMF to lower debt as a proportion of GDP and promote sustained growth. Whilst the measures may succeed in raising GDP, it often comes at the cost of increased time and income poverty, degraded social welfare and instability. In 2022, during a major health and cost-of-living crisis, 143 countries implemented policy measures that weakened the government’s capacity to provide education, healthcare, social protection and other public services.
Similarly, liberalisation and deregulation of markets, driven by GDP-focused agendas, has eroded labour rights and environmental protections, culminating in disasters like the Rana Plaza collapse which claimed over 1000 lives and the BP oil spill that devastated ecosystems. GDP doesn’t just fail to comprehend or visibilize the human and environmental toll of these disasters, it qualifies them as positives because they lead to new financial transactions. GDP cannot account for the losses of lives and ecosystems, but it can account for the materials and labour to build a new factory. Economically, the Oil Spill clean-up was worth more than any carbon absorption provided by the Amazon rainforest.
A new way forward
GDP has been used to justify an extractive, patriarchal, and neo-colonial economic system that is pushing us towards a breaking point. Unless we pivot towards alternatives modes of measurement it will continue to do so. We must redefine progress beyond GDP metrics and ensure these metrics are comparable, trusted, country-owned, universally applicable, actionable, scientifically robust, and dynamic and we must invest in the data systems required to monitor them.
We can learn from initiatives around the world like Bhutan’s Gross National Happiness Index which prioritizes the happiness of its people over GDP and has seen poverty levels drop while improving environmental and social indicators. In New Zealand, the national budget is organised around the Living Standards Frameworkwhich measures a range of well-being indicators. These measures incorporate values such as education, health, environmental sustainability, and income distribution, providing a more holistic view of a country’s progress.
However, to succeed in this, we must first redesign decision-making processes. Moving beyond GDP requires a paradigm shift in whose voices are heard and whose values are included on the global stage. We cannot challenge the patriarchal and neo-colonial implications of GDP policies without challenging the political powers that have maintained GDP as the status quo.
As humanity faces multiple overlapping crises, there has been a notable shift in perspective, with both the OECD and WEF acknowledging the “need to rethink GDP as our ‘key performance indicator’”. Similarly, the 2030 Agenda represents a global consensus to value well-being and sustainability and to co-operate in achieving these objectives.
The 2024 Summit of the Future provides a critical opportunity for governments to reflect on their progress towards the SDGs and build new mechanisms for achieving them, including a system that moves beyond GDP and the colonial, patriarchal and environmentally devastating legacy that it leaves behind.
To ensure inclusivity and accuracy, this new framework must be co-created by all levels of society, heeding Indigenous, feminist and ecological principles. This shift is not just necessary in securing a healthy planet and sustainable development, but crucial in advancing decolonization and strengthening global democracy by ensuring that global financial and political institutions revolve around principles that represent all countries and identities.
