It's (not just) the economy, stupid: moving towards a broader understanding of what makes a thriving society

GDP – just one number, yet whether it is going up (growth) or down (recession), and by how much, is a concern most people attend to closely, given its importance to our livelihoods and subsistence. But has GDP (Gross Domestic Product) outlived its usefulness as a measure of how well a country is doing? Yes, according to Nobel prize-winning economist Joseph Stiglitz in his opening keynote of the Social Outcomes Conference 2021 – a view he shares with many other leading thinkers. Though its simplicity is deceptive (hundreds of different measures are used to construct it), it measures economic output, not population wellbeing, meaning “GDP could be going up and yet most people could be experiencing a lower standard of living”. Stiglitz argued that instead, we should use a “dashboard” of several different measures that aim to capture social metrics as well as economic ones. There have been attempts to do this, and we heard about the example of New Zealand.

The desire to better understand a population’s social, not just economic condition, was no doubt easy for conference delegates to agree with. But to what end? Stiglitz argued that “what gets measured gets done.” Many recognised that only by connecting measurement to the way that society’s institutions operate would it become useful.

Counting for accountability

One way to do that is by linking measurement to public accountability – the mechanisms that enable citizens to regulate society’s institutions. This link could be strengthened by having citizens decide which social outcomes are worth measuring and working towards. New Zealand’s dashboard was designed through a democratic process. But the listening is ongoing: a deep-dive into “user voice” on the conference’s second day indicated that feedback from citizens is not an occasional indulgence – it can and must be built into the day-to-day delivery of services.

Another critical consideration is who should get to see whether or not outcomes are being achieved? One answer is “everyone”: a repeated sentiment throughout the conference was that the data generated from measuring social outcomes should be made public. That would mean the media, academics and civil society could see whether progress is being made and demand an account from those responsible when it is not. It would also mean institutions could learn from one another about what does and does not work. One of the roundtables that kicked off the conference showed that outcome-based partnerships worldwide(such as “impact bonds”) can and must lead the way in data transparency. The “hack and learn” later on the conference’s first day experimented with how technology can make such data easy to interpret for all.

A question of scale

Stiglitz’s “dashboard” idea is intended to operate at the national level, to complement GDP, which is a national measure by definition. Yet for bigger countries, a lot of information needs to be aggregated and abstracted in order for it to be reliable and understandable at this scale. Perhaps we are not yet ready to observe and influence social outcomes across entire national populations, and should focus on a smaller scale, say regions or localities. The conference abounded with examples of what that might look like.

One session discussed the British government’s signature policy of “levelling up”. Britain is among the countries with the highest levels of regional inequality, and the government’s commitment to address this has so far focused on economic metrics and transport infrastructure. Prof Philip McCann chaired a roundtable discussing the importance of a greater focus on local “social” infrastructure and community life.

Many examples were shared throughout the conference where a focus on improving social outcomes enabled diverse organisations in a place to rally around a set of clearly defined shared goals. But the lack of local power to define these and invest in them was highlighted too. Evidence from a range of research, including GO Lab’s own research on projects to reform children’s social care, suggested that localities accepted onerous conditions attached to discretionary spending from higher authorities (national governments or multilateral institutions) because more than anything, they needed more cash.

Social outcomes with everything

Social outcomes are increasingly becoming part of conversations they haven’t traditionally featured in. One of these is public procurement, which counts for a cool 12% of GDP in the OECD. All over the world, public procurement regulations are attempting to go beyond maximising economic efficiency so that government spending with outside suppliers can be used as a lever to improve social outcomes. But the practice is new and poorly understood. Does the addition of new social requirements for suppliers reduce the economic efficiency of government buying? And if so, how do we know if that is compensated for by taking a broader understanding of the “social value” generated? Promises made by suppliers in competitive tendering processes need to be followed up and validated. Data is patchy and not standardised.

Another world where social outcomes are making a debut (or perhaps a comeback) is in the world of business. Presenters throughout the conference shared many examples of where the private sector is partnering with government and civil society to play a role in improving social outcomes. Alongside this intriguing work, businesses and their financiers are making loud claims about their desire to be “responsible”, which seems like it ought to be welcomed. Perhaps not, argued Prof Karthik Ramanna and blue-chip corporate board member Dambisa Moyo in the conference’s closing session. Companies’ core incentive is to make money, and that will always come first. Any claims they make to improve environmental or social outcomes need to be independently validated just as their financial accounts are. And critical decisions about what matters to society should not be delegated to a small group of unelected businesspeople in a boardroom.

The need to know more

Discussion at the conference made it clear that a wide array of society’s institutions are starting to consider social outcomes alongside economic ones. But much is still to be learned about how social outcomes are understood, and how things should be done differently when they are. The conference’s centrepiece was a session on a Global Systematic Review of Social Outcomes Contracting that the GO Lab is running in partnership with research consultancy Ecorys, the most ambitious attempt yet to make sense of all that has been written about formal partnerships to improve social outcomes.

We would like to extend a huge thank you to all those who participated in SOC21 as speakers and delegates and made for such a rich set of discussions, and look forward to delving further into the issues, at the Social Outcomes Conference 2022.