Photo: Truba7113/Shutterstock

Iceland’s Prime Minister Favors Well-Being Over GDP in Budget

by Eben Diskin Dec 6, 2019

Countries around the world measure economic success through the yearly Growth Domestic Product (GDP), the total market value of goods and services produced by a nation in the space of one year.

Katrín Jakobsdóttir, Iceland’s prime minister, as well as Scottish First Minister Nicola Sturgeon and New Zealand’s PM Jacinda Ardern, are going against that trend. The three heads of nations have created Wellbeing Economy Governments, an initiative that takes the well-being of a country’s population as a more accurate indicator of success than pure economic growth.

Speaking at London’s Chatham House think tank, Jakobsdóttir called for an “alternative future based on well-being and inclusive growth,” focusing less on the production of goods and services and more on the effects of climate change, health inequality, mental health, domestic violence, and other phenomena, when crafting a budget.

Jakobsdóttir said, “It’s about how you prioritize the public budget — you can always have an emphasis on well-being.” Iceland’s more holistic view of measuring a nation’s success and prioritizing non-economic factors is backed by economist and Nobel Prize winner Joseph Stiglitz who expressed that “GDP is not a good measure of wellbeing — it’s too materialistic.”

Jakobsdóttir cited Iceland’s adoption of universal childcare and parental leave as examples of the kind of positive, well-being-focused changes she hopes to see in the future.

Discover Matador