FOR IMMEDIATE RELEASE CONTACT Joshua E. Brown Joshua.E.Brown@uvm.edu 802/656-3039 “What you measure is what you get,” said Nobelprize-winning economist Joseph Stiglitz. Soon Vermont may measureits economic well-being somewhat differently. This week, the Vermont legislature sent a bill to Gov. PeterShumlin that charges the University of Vermont s Gund Institutefor Ecological Economics with developing a new way of measuring thehealth of the state economy: it s called the Vermont GenuineProgress Indicator.
The law would be the first of its kind in the U.S. and builds on agrowing network of state GPI initiatives, most notably Maryland’s . Beyond GDP Since World War II, policy-makers and their economic advisersworldwide have measured economic progress by the Gross DomesticProduct, or GDP, which tracks the volume of commercialtransactions: the purchase and sale of stuff. “And that s what we ve gotten more stuff,” saysJon Erickson, professor and managing director of UVM s Gund Institute . “But is having more stuff the only purpose of the economy?Is it even the main purpose?” Erickson doesn t think it is or should be anymore.
“GDP accounting grew out of the Great Depression and becamethe dominant planning tool for post-war expansion,” he says.”But today economists and policy-makers alike are questioningthe utility of such a narrow metric of progress, looking for morecomprehensive measures that reflect the environmental and socialrealities of our time.” That s why Erickson and colleagues have been working hard onbehalf of the new legislation , S.237, “An Act Relating To The Genuine ProgressIndicator,” working closely with the governor s office aswell as testifying before the state legislature. The law will call on the state government to work with the GundInstitute to “establish and test a genuine progressindicator” the legislation says, that “will assiststate government in decision-making by providing an additionalbasis for budgetary decisions, including outcomes-based budgeting;by measuring progress in the application of policy and programs;and by serving as a tool to identify public policy priorities,including other measures such as human rights.” “It makes sense that Vermont, with its commitment toenvironmental protection and social justice, would be in theforefront of a movement to redefine progress,” says Erickson. The GPI is a more accurate measure of the economy s costs andbenefits than GDP. What s the economy for? “The point of the economy isn t to crank through resourcesas quickly as possible,” says Gund Fellow Eric Zencey whowill be coordinating the GPI initiative. “The point is tobuild sustainable well-being for our communities.” GPI studies and happiness surveys worldwide point to a growingdisconnect between GDP and our standard of living. Retort Pouch
“GDP assumes that if we re all working 80 hours a week,farming our children out to daycare, and living high-consumptionlifestyles, that s a good thing for the economy,” saysErickson, but that might not be such a good thing for ourwell-being.” “GPI subtracts things that should be costs but in GDP arecounted as benefits like air pollution, water pollution, landdegradation,” says Erickson, and it adds in things that GDPdoesn t count because they re not part of the formal economy like household work and volunteer time.” “GDP goes up, but we aren t better off, because GDP doesn tdeduct the costs or adjust for the distribution of all thateconomic activity,” Zencey says. “This new law callsfor a better indicator set, one that will draw on social andenvironmental research to better guide Vermont economicpolicy.” Zencey led a graduate class at the Gund Institute last fall thatupdated a 2003 Gund research project, the first state-level GPIstudy in the nation. The class drew on widely available data andnetworked with state legislators, agencies, and Vermont nonprofitsto estimate twenty-six GPI variables that adjust Gross StateProduct (the state-level equivalent to GDP) for economic, social,and environmental costs and benefits to consumption. Many supporters The GPI bill was introduced into this year s legislative sessionby state Sen. Anthony Pollina of Washington County, and severalco-sponsors. Stand Up Pouch Bags
“The GPI accounts for the quality ofpeoples’ lives, not just the commotion of money in theeconomy,” says Pollina. “We should strive for aneconomy that produces widely shared prosperity in a way that buildsstrong families, strengthens communities and protects theenvironment.” The new bill directs the secretary of administration to work withthe Gund Institute to review and formalize a Vermont GPI, withbroad participation from state agencies, nonprofits and communityorganizations. “We’re witnessing a shift toward measuring whatmatters,” says Tom Barefoot, co-coordinator of Gross NationalHappiness USA, a national group based in Vermont working onwell-being indicators. “The partnerships being formed aroundthe Vermont GPI bill are taking years of good thinking and puttingit into action.” Barefoot s group is working with the Gund Institute, Common GoodVermont and Benchmarks for a Better Vermont to begin building a”Vermont data committee” called for in the GPI bill. With passage of the bill, “Vermont continues to show thatit s a leader in progressive thinking and policy,” saysErickson, “We’re all a little prouder to be Vermontersthis week.” More information A conference to begin work on the Vermont GPI and well-beingmeasures will be hosted by the Gund Institute and Gross NationalHappiness USA on Wednesday, May 30 at UVM. Plastic Snack Bags Manufacturer
Find information andregistration at. To learn more about past GPI studies led by the Gund Institute,including Vermont, Ohio and Maryland, see their featured projectsat http://www.uvm.edu/giee/.