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Home Features Nicholas Gruen: what have wellbeing frameworks ever done for us?
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Government agencies around the world have been discussing wellbeing for a long time, but this has not filtered through to action on the ground, argues economist Nicholas Gruen. The first of a four-part essay series about failures of policy debate to translate into outcomes.
“Principles are good and worth the effort only when they develop into deeds” — Vincent Van Gogh
I’ve previously critiqued the process by which a lot of organisations do strategic thinking and planning and proposed an alternative. In this series of essays, I make similar claims and suggestions for policy thinking. As with strategic thinking, I have no commands to give, at least none of a very simple type. Indeed, as I’ve argued in the case of strategic thinking, the uncritical assertion of simple, plausible and apparently authoritative rules like “agree on where you’re going before you choose how to get there” often presage the transition from thinking to a kind of ‘anti-thinking’. As paradoxical as it may sound, the consideration of ends and means should be a dialectical one. The one rule I’d propose is always to navigate these questions with the critical intelligence you and/or your colleagues can muster. Thinking is a tricky business.
In this and the next essay I explore ‘wellbeing frameworks’ established within policy departments, academia and its partners in business, government and civil society. The third essay looks at a sub-discipline of economics – the renewed interest in scale economies in trade theory in the 1980s and 90s – and how little use it was for important policy debates to which it should have been directly relevant. Part four is more forward looking. I use the critique of the way we do things presented in the first three essays to motivate an elaboration of how the current interest in trade and technology as drivers of inequality offers a similar example of a sub-discipline within economics taking off for its ‘relevance’ to existing anxieties, but again in such a way that it offers strangely infertile ground for improving policy. I set out what I think it would look like if it were in pursuit of policy insight.
At the most general level my arguments are similar to those of Francis Bacon, and other founders of modern science, against scholasticism. Let me quote a favourite philosopher, RG Collingwood, on the point. From his marvellous, brief autobiography1:
“I was only rediscovering for myself, in the practice of historical research, principles which Bacon 2 and Descartes had stated, three hundred years earlier in connexion with the natural sciences. Each of them had said very plainly that knowledge comes only by answering questions, and that these questions must be the right questions and asked in the right order. And [in an illustration of these very ideas themselves] I had often read the works in which they said it; but [since I didn’t have these questions on my mind] I did not understand them until I had found the same thing out for myself.”
In the material explored in these essays, we find fine sentiments expressed from on high, but for them to bear fruit they require careful connecting up with ‘lower’ realms. To use Collingwood’s formulation, if some of the high level questions are the right ones — such as “how do we promote wellbeing?” — the policy fruit of such questions is meagre because those questions are not pursued sufficiently seriously or critically to generate the required cascade of “the right questions asked in the right order”. As a consequence there’s plenty of talking points for those giving speeches and setting out new visions. But it’s rare that means are adequately related to ends, causes to effects, or details to the bigger picture or ‘visions’ so frequently promulgated. The sound and fury signifies nothing.
The UK Institute for Government recently published an expose of endless ‘churn’ in the announcement of major policy revamps and new policy ‘visions’, the long range ambitions of each then being curtailed in the next revamp, the next major plan to pay obeisance to our ever intensifying cult of ‘announceables’. TV satires like Utopia and John Clarke and Bryan Dawe make great play of this in the area of politics and bureaucracy. But I argue in these essays that the confusions and disjunctions satirised in such programs are well established in more serious discourse which has the imprimatur of the academy.
Part of Francis Bacon’s program for a new science was his ‘doctrine of idols’, a lengthy elaboration of all the ways in which people went astray. It was “to the interpretation of nature what the doctrine of the refutation of sophisms is to common logic”:
“For what a man had rather were true he more readily believes. Therefore he rejects difficult things from impatience of research; sober things, because they narrow hope; the deeper things of nature, from superstition; the light of experience, from arrogance and pride …. Numberless, in short, are the ways, and sometimes imperceptible, in which the affections colour and infect the understanding.”
In these essays I try to elaborate some ‘idols of the mind’ of our policy discourse in the hope that, by identifying and naming them, we can resist their siren song.
In this essay, I’ll focus on the way in which ‘official policy makers’ have treated wellbeing, something that’s recently acquired some newsworthiness. Treasury had made occasional forays into discussing the distinction between economic growth and broader concepts of wellbeing during its transition from a bean counting department to an economic policy and strategy agency in the 1960s and 70s. However in the 2000s as secretary, Ken Henry initiated a process by which Treasury got itself a wellbeing framework. Meanwhile, the UK got itself one. And just as New Zealand was getting more serious about developing its own wellbeing framework, Australia’s Treasury dumped its wellbeing framework.
As Peter Martin reported recently, ironies abound:
“While our government tried to get through the Senate rules that would further stigmatise and inconvenience Australians applying for unemployment benefits, the British Behavioural Insights Team nominated reducing ‘cognitive load”’as one of the most important things governments could do. ‘We all have limited mental processing capacity to reason, to focus, to learn new ideas,’ it said. ‘The worries involved in making ends meet already deplete bandwidth, so government services aiming to tackle disadvantage – such as savings schemes, employment advice and parenting programs – should be required to pass a cognitive load test to ensure these services do not make it harder for people on low incomes to make good decisions.'”
If only we’d cottoned on first.
The five point wellbeing framework3 always looked fairly well intentioned. At the same time it was half arsed – in several senses. As a framework it was vague and unclear. Was ‘complexity’ sufficiently important to occupy one of the five dimensions of wellbeing? It is ambiguous in its impact on welfare in any event. Some kinds of complexity are just what we want – yes, as recent behavioural economics results have suggested, the variety we’re offered in shops and online may be above optimal, but even in an optimally variety constrained smartphone, we’d still want access to probably billions of possible combinations of settings for the phone and its apps. In this sense complexity is a sign of progress. Indeed in one of the more fertile developments in the discipline in some time, scholars like Hausmann and Hidalgo’s work suggests that economic development is conjoint with the evolution of economic complexity. The main downside I can think of occurs when complexity is used as a tool to manipulate or obfuscate to exploit asymmetric information between two parties. And if that’s a problem, why isn’t it subsumed into the first criterion of economic opportunities? Who knows?
Anyway, it doesn’t matter because none of this is very serious. The five dot points never functioned as an evaluative framework and don’t really seem to have been taken seriously in helping structure the Treasury’s work. Some of Treasury’s Great and Good gave speeches about it, but it was very hard to see what difference it was making, other than to the content of the occasional Treasury speech. For instance, as Don Arthur observed in 2012:
“Currently the government’s social inclusion agenda and Treasury’s wellbeing framework operate almost independently. Perhaps it’s time for a more whole of government approach to normative issues.4“
In one presentation senior Treasury officials explain that just because you’ve got a wellbeing framework doesn’t mean you need to measure wellbeing – a candid statement with which I broadly agree.5 After all, they explain that “for the foreseeable future we will continue to face an array of differing approaches to wellbeing measurement … because a fully agreed approach to wellbeing measurement would require full agreement on the concept of wellbeing itself”. One might nevertheless have hoped for some words about how the framework might influence policy (as opposed to supplying some talking points for decisions that would be taken in any event). Alas, it doesn’t happen. The presentation then goes on to explain the many ways in which the literature shows that multi-party democracy and liberal capitalism correlate with wellbeing. So Treasury working for the elected government of the day in a capitalist economy should work out to deliver wellbeing! (Yes, seriously!)
During Treasury’s ‘wellbeing period’ if I might call it that, Lateral Economics built the Herald/Age Lateral Economics (HALE) Index of Wellbeing. In fact, someone from Treasurer Joe Hockey’s office did ring about it and responded to my emailed response by commenting that “it’s a very useful contribution and something that will hopefully help inform some of the commentary we are seeing”. I hope they did see some commentary from Treasury on it but I heard nothing more. In any event, there’s no evidence I’ve seen of Treasury taking any interest in our index and we never heard another word.
As intimated in the generalities of the presentation quoted above, I don’t think Treasury took any interest in any other indexes either. Indeed, it’s hard to see anything Treasury did differently to business-as-usual arising from their new framework. On the question of complexity for instance I checked Treasury’s website for summaries of the first two major documents it served up where complexity might be regarded as of some importance to policy quality before the wellbeing framework was discarded – the government’s response to the Harper Competition Policy Review (pdf) and its response to the the Financial System Inquiry (pdf) – neither include the word ‘complexity’.6 I conclude that Treasury’s ‘wellbeing framework’ was more like some words from on high that authorise people to talk and think in a particular way.7 Not, as Jerry Seinfeld might say, that there’s anything wrong with that. It’s just that it’s a bit of a non-event, and something that might lead us to ponder how little happened and why.
There was a stronger commitment to the wellbeing agenda in the UK where Prime Minister Cameron made much of wellbeing and Gus O’Donnell was supportive as his cabinet secretary. Both Ken Henry and Gus O’Donnell – or GOD as he came to be known – are now retired from their Secretaryships. And where Ken is now in the established, if relatively recent, tradition of the wider Australian public sector, working for the interests he used to regulate, GOD remained actively involved in the wellbeing agenda, chairing the Commission on Wellbeing at the Legatum Institute and being involved with the What Works Centre for Wellbeing and speaking publicly on the subject frequently at home and abroad.
The UK’s wellbeing agenda has clearly been taken more seriously than it was in Australia. The What Works Centre for Wellbeing is one of just a handful of such centres in the UK. From the admittedly slender evidence base of some discussions I had when I was in England a year or so ago and a fairly cursory inspection of its website, it’s still hard to get much idea from the centre where they think the biggest payoffs to wellbeing are. On the other hand, guides like this one into the data local administrators need in order to understand (and so manage for?) wellbeing locally, seem very worthwhile.8
All in all, wellbeing has clearly received a lot more serious and sustained attention than it has in Australia. There’s an All-Party Parliamentary Group on Wellbeing Economics. Its blog suggests that it’s moribund currently, but with John Cruddas as co-chair, it has presumably seen serious days. And there’s the loneliness agenda. I don’t know if it grew out of the wellbeing agenda, but it’s just the kind of thing which it seems to me ought to come out of a wellbeing agenda, for reasons which, if they’re not obvious, I explain below.
New Zealand Treasury calls its wellbeing framework a “Living Standards Framework“. New Zealand Treasury informs us (pdf) that it developed the framework “as a way to help our own staff think widely about the most important things for lifting living standards for New Zealanders”. And good on them. They’ve obviously taken it a lot more seriously than we did in the lucky country (before we forgot the whole thing).
Then the New Zealand documentation makes an extraordinary comment. Expressing some of the diffidence the Australian Treasury expressed about difficulties in measuring things, they comment that they’re releasing their work on the subject, not because it’s perfect and not just for feedback:
“[W]e also knew that we were at the cutting edge of thinking. Other countries had Living Standards-type measurement tools, but no-one seemed to be thinking about how to use it for policy advice.”
So central and statistical agencies around the world have been developing wellbeing frameworks for over a decade9 – with some having national commissions of great moment and international note. But to quote New Zealand’s Treasury again, “no-one seemed to be thinking about how to use it for policy advice”. Isn’t that the whole purpose of all this work? To make better policy? (In subsequent parts of this essay I’ll show how much this same problem exists at the academic level, both in the study of wellbeing and more broadly.)
This is part one of a four-part essay series about failures of policy to translate into outcomes. Read part two, on ‘hacking’ wellbeing, here.
1. Read it if you can. An autobiography as a history of ideas – it’s a quick, succinct and bracing read – if you like ideas. It’s been rated five stars by all six reviewers on Amazon. It’s only US$4.61 if your account with Amazon is in the US or AUD$6.94 if you like our copyright arrangements that serve up our citizens for the profit maximisation of vendors. ↩
2. On Bacon, Collingwood said this (pdf): “Francis Bacon, lawyer and philosopher, laid it down in one of his memorable phrases that the natural scientist must ‘put Nature to the question’. What he was denying, when he wrote this, was that the scientist’s attitude toward nature should be one of respectful attentiveness, waiting upon her utterances and building his theories on the basis of what she chooses to vouchsafe him. What he was asserting was two things at once: first, that the scientist must take the initiative, deciding for himself what he wants to know and formulating this in his own mind in the shape of a question; and secondly, that he must find means of compelling nature to answer, devising tortures under which she can no longer hold her tongue. Here, in a single brief epigram, Bacon laid down once for all the true theory of experimental science.”↩
3. The framework is set out in a ‘box’ in this Treasury paper and comprises these five points: 1) The set of opportunities available to people. This includes not only the level of goods and services that can be consumed, but good health and environmental amenity, leisure and intangibles such as personal and social activities, community participation and political rights and freedoms; 2) The distribution of those opportunities across the Australian people. In particular, that all Australians have the opportunity to lead a fulfilling life and participate meaningfully in society; 3) The sustainability of those opportunities available over time. In particular, consideration of whether the productive base needed to generate opportunities (the total stock of capital, including human, physical, social and natural assets) is maintained or enhanced for current and future generations; 4) The overall level and allocation of risk borne by individuals and the community. This includes a concern for the ability, and inability, of individuals to manage the level and nature of the risks they face; and 5) The complexity of the choices facing individuals and the community. Our concerns include the costs of dealing with unwanted complexity, the transparency of government and the ability of individuals and the community to make choices and trade-offs that better match their preferences.↩
4. Intriguingly, according to this submission to a 2009 PC inquiry into not-for-profits, when the idea of a National Development Index had come up as a recommendation of the 202o Summit, government’s response “generally endorsed the idea of national development indicators, and the need to ‘engage the community in discussion about what is important to Australia’s progress and development’; and it said it had asked the Australian Social Inclusion Board to report on progress in social inclusion and key progress indicators to measure it”.↩
5. Though it depends on context, a matter I’ll get onto.↩
6. It’s hard for anyone to really know, and certainly difficult for an outsider to know what real influence the wellbeing framework had on Treasury’s policy advice. Gene Tunny — with whom I dealt when he was inside Treasury and who now keeps his own blog — described the Treasury’s wellbeing framework as one of his favourites of “the many outstanding contributions” of former Treasury Secretary Ken Henry to public policy in Australia. When I suggested that the wellbeing framework hadn’t made any difference to Treasury’s policy advice he responded, I think fairly meekly, as follows: As you’d suspect, It’s difficult to trace the real impacts that it had, but I always saw it as an important part of Ken Henry’s refashioning of Treasury away from a department of hard-headed bean counters to one that was more broadly engaged with not just economic but social policy issues, particularly in health and education. The department’s involvement with the Cape York Institute was guided in part by Amartya Sen’s view of development as freedom and the wellbeing framework which tried to encompass Sen’s thinking. I take your point about complexity being an odd inclusion, but there was a widespread view that our regulatory and tax systems were too complex, and this complexity was adverse to wellbeing in and of itself, not just because of its economic costs. I recall KH tried to inject some of this thinking into his tax review. I suggested in reply that the one thing Gene had mentioned – the Cape York connection – looked more like tokenism to me. I’m afraid I … smell a rat with the Cape York malarkey. The people I know who were involved in it – some sent there by the bureaucracy – speak of it as a bit of a Potemkin operation. I’m a great admirer of Noel Pearson’s essays, but I’ve never met anyone I respect who admires his administration at Cape York. The institute was, however, a pinup of a new approach from all the serious folks who are invited into the Qantas Managers’ Lounge or whatever they call it these days. How much real curiosity did they show or help did they give others seeking to forge a new way that was consistent with their new framework? (I speak as one who was as chair of The Australian Centre for Social Innovation (TACSI). I’m seriously not being snide here or taking any of this personally. I’m trying to argue the case I made above … suggesting that however it related to people’s self-image, however well it was intended and/or received, knowing the tree by its fruits, it wasn’t really a serious exercise. … I’ve love you to prove me wrong. I really would. Alas there was no further response.↩
7. As Treasury officers wrote in 2012 that the framework functioned, “By providing an ongoing reminder to staff of the underlying objectives of their work, it is one of the common threads that help tie the Treasury’s work together”.↩
8. The Australian Centre for Excellence in Local Government seems to have published something similar in 2013, though it appears not to have been referenced on Treasury’s website.↩
9. Regarding Australia, the Treasury folks I quoted above also commented on Australia’s being at the forefront of wellbeing measurement. The Measures of Australia’s Progress project of the Australian Bureau of Statistics was ahead of its time, and continues to provide an insightful, wide-ranging and balanced dashboard of important indicators to assist public debate and understanding.↩
Nicholas Gruen is CEO of Lateral Economics. He's an economist, a consultant, a commentator and a former adviser to the federal government.
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