Case Study 1 — Bhutan's Gross National Happiness: An Alternative to GDP
Bhutan — a small Himalayan kingdom of about 800,000 people — has used Gross National Happiness (GNH) rather than GDP as its primary national indicator since the 1970s. The GNH index measures nine domains: psychological wellbeing, health, education, time use, cultural resilience, good governance, community vitality, ecological diversity, and living standards.
What GNH captures that GDP doesn't: time for family and community, cultural preservation, environmental health, psychological wellbeing, governance quality.
What GDP captures that GNH doesn't: material production, market efficiency, innovation incentives, economic growth.
The honest assessment: GNH is an inspiring alternative that reminds us what GDP misses. But Bhutan remains a poor country by material standards ($3,500 GDP per capita), and GNH has not solved poverty, inadequate healthcare, or limited economic opportunity. The lesson: alternative measures are valuable complements to GDP, not replacements. A country needs both material prosperity and the non-material dimensions GNH captures.
Discussion questions
- Should the U.S. adopt something like GNH alongside GDP? What would it measure?
- Can a country be "happy" and poor? Can a country be "rich" and unhappy?
- New Zealand adopted a "wellbeing budget" in 2019. Look up what it includes. Is it working?