Don’t Worry, Be Happy

IMF Blog, February 20, 2019

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Since the early 1970s, Bhutan’s economic development model incorporated tenets of Buddhist philosophy and holistic development, with core functions of preserving the environment and emphasizing happiness and collective well-being.
The concept of Gross National Happiness (GNH) and an associated index guide public policymaking in Bhutan.
The Royal Government of Bhutan developed GNH indicators in 2005 to move GNH from an academic notion to a measurable one; the indicators aim to check whether programs and policies are consistent with the values of GNH.
The Center for Bhutan Studies developed a detailed questionnaire covering nine key “domains” used to construct the index: psychological well-being, health, time use, education, culture, good governance, ecological resilience, community vitality, and living standards.

Real GDP per capita grew from roughly $400 in 1980 to about $2,800 in 2016.
The country is now nearing middle-income status.
IMF staff working paper chart shows change in Bhutan’s real GDP per capita from 1980 until 2017, demonstrating a broad, increasing trend; real GDP per capita increased by about six times over this period.

Bhutan developed GNH indicators in 2005 and has GNH survey data for 2008, 2010, and 2015 used to construct the GNH index score.
The measurement of happiness through the GNH index shows an improvement, albeit much more modest than GDP gains.
Current trends indicate Bhutan is likely to follow Easterlin’s Paradox—where gains in per capita income are not fully reflected in gains in well-being—which is discussed in detail in the IMF working paper.
The overall happiness level improved in 2015 compared to the previous survey.

Some 51 percent of men are self-described as “happy” or “extremely happy,” compared with only 39 percent of women.
Some 55 percent of urban dwellers are “happy” or “extremely happy,” compared with only 38 percent of those living in rural areas.
Among occupations, Bhutan’s farmers were found to be the least happy.

IMF Blog — “Don’t Worry, Be Happy”; Sriram Balasubramanian and Paul Cashin; February 20, 2019