Designing welfare policies, requires a deep understanding of complex social and economic phenomena. Phenomena that are often hard to be fully captured by conventional economic models and metrics such as GDP. Thus, over the last years, the academic community has tried to address this issue through the development of a beyond-GDP agenda which includes numerous GDP alternatives. Despite this wealth of new knowledge, most of policymaking nowadays still depends in one way or another on GDP.
What we choose to measure as a society directly shapes our understanding of the social and economic issues we face. It therefore affects what policies we design and how we choose to implement them. Hence, there is an urgent need for academics, policymakers and governments to come to a consensus on how we should reframe welfare, measure it and use metrics to design policies that deliver shared sustainable prosperity. That was the key argument highlighted in the online discussion “Assessing welfare disparities in European regions”, that was hosted by KMOP Policy Center and Ethos Lab – Centre for Governance and Sustainability Research.
During the event, a new tool for measuring welfare was presented for the first time, in its beta version. The Reframing Welfare Index, developed by KMOP Policy Center and Ethos Lab, is a composite index that aims to map and analyse social welfare in EU regions, thus enhancing the way we design, implement, and evaluate policies.
“The research behind the Reframing Welfare Index is very interesting and encouraging,” said Mr. Mikuláš Dzurinda, President of the Wilfried Martens Centre for European Studies and former Prime Minister of Slovakia, arguing that “political leaders should adopt good, effective and sustainable decisions only on the basis of good, real, right complex data or parameters.” Despite the promotion of welfare policies such as the structural or cohesion funds, the mood of people is that something is not working well in our European project, Mr. Dzurinda said. “We cannot narrow down the reduction of social disparities to economic categories only – the GDP per capita, or wages or income. We should also see the quality of education, quality of health services, housing, and affordability,” he pointed out. The President of the Wilfried Martens Centre believes that welfare disparities in the EU should not only worry countries lagging behind in prosperity rankings, but also countries leading them.
So, how do we measure such comprehensive phenomena as welfare? According to Mr. Dzurinda, we need to use cutting edge data to identify welfare disparities and quantify them as precisely as possible. “Only then political leaders can adopt effective decisions,” he pointed out. “The fewer national, regional disparities, the faster convergence of our countries and regions, the better for us all, for the EU as a whole.”
Professor Dame Henrietta Moore of University College London, Founder and Director of Institute for Global Prosperity, highlighted the multidimensional features of prosperity, suggesting that policies aiming to improve people’s lives require a number of intersecting actions. These actions include adopting new ways of measuring what we value, by developing citizen-led prosperity indices for Europe, creating new methods of social protection with a new basket of public goods, reforming taxation systems to fund this new basket of public services, and changing our vision of the welfare state of the 21st century. Furthermore, Prof. Moore highlighted that the role of digital citizenship will become even more prominent in our economies and in our way of thinking of how we can deliver the new basket of public goods. “What policymakers and governments across Europe should do is to refocus their attention of what supports prosperity and what makes life worth living. We need a redefinition that is less concerned with aggregate economic wealth and growth like GDP and more attentive to the things that people really care about and need,” she pointed out.
Professor Paul Dolan of the London School of Economics and Political Science, pointed out the importance of subjectivity regarding wellbeing and explained why it must be adopted in policy-making. Professor Dolan argued that policymakers need to extend their traditional focus on material wellbeing and economic development to include the impact that policies have on how people think and feel about their lives. The idea of welfare that lies now in the heart of economics is that if you give people more money it enables them to satisfy more of their desires and needs. Instead, we should focus on a different notion of welfare that actually improves people’s lives and makes them feel better, like the services pointed out by Prof. Moore.
Dr. George Melios, Founder of Ethos Lab, discussed how different approaches to welfare translate to beyond-GDP metrics of welfare. Drawing from a broad research agenda that KMOP Policy Center and Ethos Lab are developing over the past three years, Dr. Melios presented how existing measures fail to capture important aspects of welfare and prosperity. Focusing on the importance of dynamic comparisons over time and across space, the speaker presented a new methodology that helps policymakers and academics reframe what welfare means and how it’s measured. Part of this methodology has led to the development of the Reframing Welfare Index (RWI), a new composite welfare indicator that could reframe the way policymakers and academics design, implement, and evaluate policies.
RWI uses over 2 million data points from various sources to map social welfare through 21 measurable pillars of prosperity and a total of more than 180 indicators. Each indicator has been carefully designed to correspond to different policy actions, allowing for the first time the connection between policy investments and measurable socioeconomic outcomes. The wealth of data analysed for its production can, with the use of appropriate statistical methods, aid the impact assessment of public and private investments in social welfare, Dr. Melios said.
“What we choose to measure as a society directly shapes our understanding of the social and economic issues we face and the way we design policies to address them. Therefore, we do believe, that RWI is a useful tool that can contribute to efficient policy design measuring the right things in the right way,” said Mr. Pyrros Papadimitriou, Director of KMOP Policy Center and Associate Professor at the University of the Peloponnese.
Referring to the timing of the event and the current tectonic geopolitical upheavals in Europe, Mr. Antonis Klapsis, Assistant Professor at the University of the Peloponnese, who moderated the conversation, said that “now is the best time to discuss about welfare and prosperity”. “Maybe the Ukrainian crisis can be a turning point and a time to achieve prosperity. We need to find a new intersection between politics and society so that we can promote welfare,” he argued.
The event was the inaugural meeting of the “Reframing Welfare Policy Workshop” series, that KMOP Policy Center and Ethos Lab are planning to host over the next months, aiming to focus on policies and welfare.
About KMOP Policy Center
KMOP Policy Center was established in Brussels, in 2020, by KMOP – Social Action and Innovation Centre, with the aim to conduct in-depth research, produce impactful, evidence-based policies, and advocate on social issues. Capitalizing on the organization’s long experience in the provision of social services, KMOP Policy Center analyzes, designs and recommends policies that promote social welfare, individual well-being and equal opportunities, bringing real change for individuals and communities. KMOP Policy Center conducts in-depth research that addresses critical social issues, enlightens public debate and enhances policy formation, nationally and internationally.
About Ethos Lab
Ethos Lab – Centre for Governance and Sustainability Studies is a private research organization founded in Athens in 2019. The Centre was founded by a team of academics, practitioners, and policymakers in order to bridge the gap between cutting-edge academic research and its potential policy applications in the public and private sector. Ethos Lab’s work focuses on providing new data and evidence on issues around governance, sustainability and welfare in order to engage state and multilevel stakeholders to promote the use of innovative research-based for policy interventions.