It is well known that GDP has its limitations as a method of quantifying national levels of welfare. Three problems often mentioned are:
- GDP does not capture how income is distributed, which is important for levels of welfare.
- Many wealth-generating factors are not included in the national accounts.
- GDP trends do not reflect whether the process reinforces or undermines the foundations for future GDP growth and welfare.
The report “Is economic growth compatible with a sustainable Nordic future? - A review of literature” recommends that the Nordic countries adopt alternatives to GDP as a measure of progress. Multiple alternatives have been proposed. The idea of a “green GDP” is no longer as popular, but alternatives like the Human Development Index (HDI) and the Inclusive Wealth Index (IWI) are well-known attempts to address some of the issues mentioned above. New Zealand has developed a Living Standard Framework (LSF) Dashboard and “wellbeing budgets”. Types of accounts that complement the national accounts already exist and new ones are being developed. For example, environmental accounts and ecosystem accounts include a range of indicators that measure environmental aspects of welfare. Another alternative is to monitor indicators associated with the UN Sustainable Development Goals.
The Nordic countries tend to score highly on per capita GDP as well as alternatives like The World Happiness Report 2023, in which Finland ranked no. 1, Denmark 2, Iceland 3, Sweden 6 and Norway 7. Relatively small changes in the rankings often attract major press coverage.
Purpose of the project
The purpose of the project is to provide an overview of alternatives to GDP for measuring welfare/wellbeing and of the extent to which alternatives are already used and influence policy in the Nordic countries. The project is in two parts and will:
- Provide an overview of the most important and best-known alternative measures/indicators that already exist and have a significant link to environmental aspects/conditions. Analyse each Nordic country and describe in brief the explanations for the outcome of the alternative measures/indicators.
- Analyse and compare the extent to which the Nordic countries have implemented policies that more or less directly reflect the use of and are linked to the alternative measures/indicators included in the overview under point 1.
The budget for the project is DKK 400,000 (incl. VAT) to cover standard project expenses and any travel costs and expenses related to outreach work presenting the findings.
The NME must receive tenders no later than 28 December 2023 at 15:00 CET. All documents must be submitted by this deadline. Material received after this date will not be taken into consideration. A decision will be made in early 2024 and all applicants informed of it. The date for reporting will be set in the project contract.
Applications must be e-mailed to NME’s administrative body (firstname.lastname@example.org). The project description/application form and compulsory budget schedule must all be in one of the Nordic languages or English. Applications must cite the journal number EPOELY/2984/2023.
Attach additional appendices describing in more detail the factors we take into consideration, e.g. an independent project description and CVs as separate files.
In assessing submissions, emphasis will be placed on:
- the structure and planning of the work, including methodology and how relevant data will be collected and processed
- the allocation of responsibilities, use of time, general skills and qualifications of those managing and implementing the project
- the expenditure for the proposed project period, including hourly rates per person and other expenses
- the tenderer’s previous experience in the area
- the Nordic contacts and networks that will be used in the project and fluency in the Nordic languages
- the timetable
- plans to communicate the project findings.
As per the Nordic Council of Ministers’ funding scheme, the project must be of benefit to the Nordic Region and include actors from at least three of Sweden, Finland, Norway, Denmark, Iceland, the Faroe Islands, Greenland and Åland.
Further information about funding from the Nordic Council of Ministers is available here:
NME will select the project based on their assessments of the applications. However, the working group reserves the right to reject all applications.
For further information about project content and funding requirements, please refer to the appendices: