Composite Indicators: When and How To Use Them

Composite Indicators: When and How To Use Them Jon Hall Global Project, OECD

Composite Indicators • A powerful tool for advocacy • A way to promote debate • But they can be controversial

Potential Users • Civil Society • Bureaucrats • Politicians • Media • Citizens

Potential Users – Potential Uses If I was from Civil Society …… How would I use acomposite indicator?

Potential Users – Potential Uses If I was from Civil Society …… • To lobby government, the media, the public about issues of concern • To focus debate within my organisation on issues of concern

Potential Users – Potential Uses If I was from a Bureaucrat…… How would I use acomposite indicator?

Potential Users – Potential Uses If I was from a Bureaucrat…… • To portray issues of concern to ministers - to galvanise action and keep focus • To demonstrate that policies are having an effect • To encourage joined up government • NOT to design detailed policy proposals

Potential Users – Potential Uses If I was from a Politician…… How would I use acomposite indicator?

Potential Users – Potential Uses If I was from a Politician…… • To demonstrate to voters the need for new – perhaps difficult – policies • To demonstrate to voters that policies are working The political economy of reform

Potential Users – Potential Uses If I was from the Media…… How would I use acomposite indicator?

Potential Users – Potential Uses If I was from the Media…… • To tell an exciting story – the public like composite indicators • To communicate complicated issues in a simple way • The Happy Planet Index

A Happy Planet Index • Launched by nef in July 2006 • HDI style rank order of nations • Measure of the “Ecological efficiency with which human well-being is delivered” • Over 1,000,000 downloads to date

Culture Governance Human well-being Education Healthcare Social Capital Economy Resource demand Natural Capital CO2 emissions Ecosystem well-being Water quality Air quality Biodiversity Soil erosion What HPI measures Human system Ecosystem

Resource demand What HPI measures Human system Human well-being Happy and Long Lives (divided by) Resource Use

Resource demand What HPI measures Human system Human well-being (Life Sat) * (Life Exp) (divided by) Eco Footprint

Potential Users – Potential Uses • If I was from a Citizen…… How would I use acomposite indicator?

Potential Users – Potential Uses If I was from a Citizen…… • To participate more effectively in democratic debate? Lobby my government, write to my member of parliament? Decide on who to vote for? • Change my behaviour…. Consume less resources? Move to another country?

But …. • Potential Uses are many – and can be very important • Vital that we are transparent about the limitations of composite indicators • Vital that we are transparent about the assumptions within them • Be clear about what they explain and do not explain • Great as a tool for simplifying a complex story • Great as a way to initiate a debate But they seldom tell the whole story But don’t oversimplify

“Everything should be as simple as it is, but not simpler.” - Albert Einstein

Composite Indicators: When and How To Use Them