GDP Growth and Wellbeing: what is the relationship between economic growth and welfare in Ireland?

Guest Post by Eilís Lawlor: It is sometimes argued that under conditions of austerity and economic hardship discussions of issues relating to quality of life and wellbeing are inappropriate. And there is something in this. With the figure for those at risk of poverty in Ireland continuing to rise, you could be forgiven for arguing that the objective of raising material incomes should be centre-stage.

Even if you accept the criticisms of GPD as a measure of progress, you may also think that whilst an over-focus on GDP got us into this mess, a relentless emphasis on raising it again is the only way to get us out of it. After all, it would raise investor confidence, increase tax revenue and reduce unemployment. Yet the Irish economy has begun to grow, and Ireland continues to be regularly cited as a success story of austerity.

Reflecting on this uptick in growth last year, I made the case that that GDP growth might not be the answer to our problems in spite of the recession. Instead, I argued that Ireland remains a stark reminder of where an emphasis on growth at all costs, and a systematic sidelining of quality of life issues can lead. The legacy of chaotic planning, ghost estates, empty motorways, poor public transport, investment-starved public services, and a weak banking sector - all products of previous growth agenda - cannot be erased by a few percentage points of positive growth. Neither is growth as measured by GDP necessarily the solution to rising debt or lower living standards. It simply creates a false choice between material and non-material ends.

It is to investigate these issues further that I have begun a three-year research project at the University of Sussex in the UK with a particular focus on the relationship between economic growth and welfare in Ireland. The aim is to build an index of progress and compare it to movements in GDP over the past twenty years to look at where GDP predicts positive change and where it does not. The first step in constructing this index is to find out what kinds of things matter to people. To this end I am surveying people about the things they value in life. You can take the survey here. The results will be posted on the same space as they emerge.

I will post again when the analysis is completed later in the year. In the meantime, you can read more about the project here.

Eilís Lawlor

Eilis Lawlor is Director of Just Economics, a research company that specialises in social and economic research. Prior to founding Just Economics, she worked for the New Economics Foundation, where she ran a programme area on social return on investment (SROI). As lead researcher on the Measuring What Matters programme, she produced some of the first SROIs to be published in the UK and was pivotal in establishing SROI as a credible evaluation tool.

Eilis is widely published in a number of policy areas and is a co-author with Eva Neitzert of the official Cabinet Office guide to SROI. She is a member of both the SROI Network's National Council and Assurance Panel.