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             Monday Morning Development Newsletter


A new Development Compass

By Lykke Andersen
*, La Paz, 18 October 2010


"If you're a Boy Scout on Mars with a compass, you're lost.”
- Jack Connerney

A compass is a direction finding instrument. The classic magnetic compass indicates where north is and helps us choose in which direction to walk if we happen to be lost in a wilderness area. However, we need direction in so many more ways than that. Every choice we make implies choosing one direction over another, and the better direction finding instruments we have, the better choices we will make. This holds at all levels from the personal level to the country level, and in all areas of life from driving to choosing where to study. This article is about direction finding at the community or country level.

In Bolivia, the stated goal is “living well in harmony with nature.” This is a very sensible goal aiming at securing human well-being without destroying the natural assets on which all life depends. But what exactly do we mean by living well in harmony with nature? How do we know if we are doing it? And, if we are not doing it, how do we know which policies might move us in the right direction? In order to answer these crucial questions, we need indicators that can serve as a compass.

We can split the concept of “living well in harmony with nature” into its two dimensions, which facilitates analysis and measurement. In one dimension, we would have the “living well” aspect, and in the other dimension, we would measure “harmony with nature.”

Living well can either be measured objectively (usually by income, basic needs or asset indicators) or subjectively (capturing the level of life-satisfaction or happiness). Subjective and objective indicators are highly correlated in poor countries, but the correlation tends to break down as people become richer. In any case, being happy and healthy seems to be more directly related to the goal of living well, while income, electricity and education may be thought of as means to achieve that goal.

Thus, ideally, our indicator of living well should measure the degree to which we live happy and healthy lives. The Happy Planet Index (1) proposes to use “happiness adjusted life expectancy” as a summary indicator. It is calculated as life expectancy multiplied by subjective well-being (as measured on a scale from 0 to 1), and the units are “Happy Life Years.” In the case of Bolivia, life expectancy is about 65 years and life satisfaction is about 0.65, so the happiness adjusted life expectancy is 42 Happy Life Years. The highest level of human well-being at the country level is achieved in Costa Rica, where life expectancy is 79 years and life satisfaction is 0.85, implying an average human well-being of 76 Happy Life Years. At the other extreme we find Zimbabwe, with a life expectancy of 41 years and life satisfaction of 0.28, implying an average level of human well-being of only 17 Happy Life Years.

As for any indicator, data is needed to construct this one, and while several large surveys have been carried out (2), subjective well-being is not yet a standard question in household surveys and censuses. It should be, though, as it is central to our goal of living well and it takes just one simple question:

All things considered, how satisfied are you with your life as a whole these days?

Responses are recorded on numerical scales, typically from 0 to 10, where 0 is dissatisfied and 10 is satisfied.

I would strongly recommend that this question is included in all future household surveys in Bolivia, as well as in the next census, because if it is not, we are going to have a compass without a needle.

As to the “harmony in nature” dimension, it is easier to measure in the opposite direction, as the amount of “environmental damage.” In Bolivia, most people have very low environmental impacts, because they consume few resources, use little energy, and generate modest amounts of waste. Thus, they can be said to live in harmony with nature. However, a small percentage of the population pulls up average environmental impacts. The uncontrolled burning of several hundred thousand hectares of forest every year and the thoughtless contamination of precious water sources cannot possibly be considered “harmony with nature.”

The Happy Planet Index proposes to use the concept “Ecological Footprint” as a way of aggregating the many different types of environmental impacts into one simple measure, which indicates how many hectares of bio-productive area a person “uses.”

The area of biologically productive land and water on Earth is approximately 11.9 billion hectares. Not all areas are equally productive, but through conversion factors, they can be standardized into average global hectares (gha). With a World population of 6.6 billion people, the available bio-capacity is about 1.8 gha per person. Thus, we might say that people who use less than 1.8 gha live in harmony with nature, while people who use more than their fair share do not.

Currently, Bolivians on average use about 2.1 gha/person, so we use more than our fair share of the World’s bio-productive area. However, Bolivia has more bio-productive area per person than any other country in the World, so we are living well within our own bio-productive capacity. Thus, in the “harmony with nature” dimension, we are doing reasonably well (except for the 5% of the population (many of them foreigners) who are causing 95% of the environmental damage).

However, in the “living well” dimension, we are not doing very well. Indeed, according to one of the World Happiness Maps, Bolivia is right at the bottom, much below Zimbabwe and war torn Iraq (3). This is very disappointing, and hopefully not entirely accurate. However, it is clear that we need to make progress in the well-being dimension, and for that to happen, we need to better understand what makes Bolivians happy.

I suggest that we replace our current, highly misleading GDP growth indicator with the following development compass, which will show us the direction towards “living well in harmony with nature”:

Figure 1: A new Development Compass



Related articles:

 Necesidad de una teoría económica más realista y más relevante
Gross National Happiness

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(*) Scientific Manager, Conservation International - Bolivia. The author happily receives comments at the following address: .
(1) NEF (2009) The Happy Planet Index 2.0. The New Economics Foundation. (
(2) See, for example, the World Values Survey ( and the ASEP/JDS (


(c) Institute for Advanced Development Studies 2010. Feel free to circulate in its original form. Past issues can be found at . The opinions expressed in this newsletters are those of the author and do not necessarily coincide with those of the Institute or of the sponsors.

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