The gauging of a nation’s well-being has become a hot topic for discussion among the policy makers across the globe, the trendsetter being the Himalayan mountain kingdom, Bhutan, which desires to measure “gross national happiness”. The latest to join the bandwagon is Cameron when he said that Briton needs alternative measures that would express national progress “not just by how our economy is growing, but by how our lives are improving; not just by our standard of living, but by our quality of life.”

Of course, all along GDP has been recognised as the best measure of economic performance because of the implicit link between the economic growth and elements of well-being such as employment levels, level of consumption, etc. However, as Robert Kennedy argued in the 1960s, GDP also measures a nation’s evils in terms of pollution, tobacco advertising, production of napalm and nuclear warheads, but not the wit, the strength of marriage, courage, wisdom, or learning of the people. He said, GDP “measures everything, in short, except that which makes life worthwhile.”

All these arguments, besides reminding us of what Simon Smith Kuznets, the Jewish Nobel Laureate in economics, who standardized the measurement of GNP, said way back in 1934, “The welfare of a nation can … scarcely be inferred from a measure of national income”, have set in motion a kind of momentum for “Happiness Economics”. Now the moot question is: How to measure national well-being/happiness?

Nevertheless, researchers like Norbert Schwarz, Alan Krueger, and Daniel Kahneman have come up with “day reconstruction method” which asks people to recall, episode by episode, the previous day’s events and the most prevalent accompanying feelings—stress, peace, exhaustion and elation. Of course, economists like Andrew Oswald argue that the data pertaining to well-being does already exist and hence demand more such collection of data than adapt an altogether different model, while professors like Kahneman and Krueger plan for a radical departure by proposing the publication of “time accounting measures”—how a nation spends its time—alongside regular national accounts.

The central idea behind this measure is that by asking the survey respondents to rank the emotions they felt while spending time in various activities such as cooking, commuting, working in office, and watching television, a measure can be produced that indicates how long people spend in a predominantly unpleasant state of mind because of engaging in tedious works like commuting or working vis-à-vis a pleasant state of mind by engaging in acts like having dinner or watching TV. Such an approach to measure the well-being of people would also enable the government evaluate public policy interventions such as investing in roads, overtime laws, creation of leisure facilities, etc.

Yet, as the UK’s National Statistics Office felt, the question of how to summarize the overall well-being of a nation using a set of indicators such as health, education, governance, and social connections, and subjective measures of quality of life, remains a challenge. Nonetheless, all these arguments lead to the need for clarifying what indices are most appropriate to measure progress and how this can best be integrated in the national decision-making process.

Interestingly, the first paper, “Can Microcredit and Job Under NREGS Jointly Bring More Happiness to the Villagers?” by Amit Kundu, investigates whether the enhanced financial capacity of a villager due to better access to micro-loan from a microfinance institution and employment under the NREGS had any impact on the well-being and happiness of the villagers in West Bengal, by developing “Happiness Index”. The author carried out a field survey using a structured questionnaire that consisted of ten questions to collect information on happiness of the people for two periods: one, just before joining the microfinance system and two, the status of happiness after two-and-a-half-years of joining the loan system. The respondents were asked to rate their happiness between four to zero on a four-point scale and the impact was assessed through first differenced method. The study revealed that participation in microfinance programme, size of the loan and more number of days of job under NREGS bestowed more happiness to the villagers. It was also established that members of self-help groups under SGSY had become happier than members of VSSU microfinance system. The difference is attributed to the fact that most of the members under SGSY scheme were women, while members of VSSU were men, and the fact that women for the first time felt more empowered by virtue of joining a microfinance programme by forming self-help groups, vindicating Amartya Sen’s capability approach theory.

This paper is followed by another interesting assertion by T. V. Ramachandra and H. S. Sudhira, in their paper, “Influence of Planning and Governance on the Level of Urban Services”, that planning and governance are imperative for ensuring effective service delivery and management of resources in addressing the challenges posed by urban sprawl, taking Bangalore as the focus of the study.

The third paper of the issue, “Agricultural Water Governance and Policies in Bulgaria”, by Hrabrin Bachev, analyses the evolution and efficiency of agricultural water governance and policies in Bulgaria during post-communist transition and EU integration, based on which the author has made certain recommendations for the improvement in public policies and strategies that would pave the way for effective and sustainable water management.

The last paper of the issue, “Corporate Governance Education: An Analysis of Existing Syllabi”, by Zabihollah Rezaee, Ran Zhang, Shahriar M. Saadullah and Douglas E. Ziegenfuss, analyses the extent to which corporate governance education has been integrated in the curricula of business schools worldwide and, based on their empirical findings, offers pedagogical suggestions for designing curriculum for corporate governance education.

-- GRK Murty
Consulting Editor