In great news this week, Vermont became the first state to legislate the adoption and use of an alternative to GDP called the Vermont Genuine Progress Indicator (GPI). While Vermont isn’t the first state to calculate genuine progress, we’ve highlighted Maryland’s groundbreaking work in this area, it is the first state to actually adopt a GPI through legislation. The bill, S.237, calls on the state government to work with the Gund Institute to establish and test a genuine progress indicator that can be used to assist the state in decision-making by providing additional basis for budgetary decisions, including outcomes-based budgeting. The GPI will also be used as a tool to identify public policy priorities, including other measures such as human rights.
This last bit is truly exciting. As we’ve written before, it’s not just that we want to measure things that GDP does not capture for the sake of measuring it. The goal is to have a more complete picture of our economy and society so policymakers can make more informed decisions. Currently, GDP only measures very limited metrics of economic growth. Our report, Beyond GDP and accompanying infographics highlight that while we often rely on GDP to measure our growth, it is not capturing the important metric—progress. Expanding metrics to include things that are good for our economy and our society, like volunteering, and things that are bad, like income inequality, provides a more complete data set for decision makers.
The GPI can show the positive impact of politices that are doing well and should be expanded. When the Gund Institute previously measured Vermont’s GPI in 2003, they found that in 2000, the GPI per capita in the state was twice the national average. The main reason Vermont’s GPI was double the national average was due to a much better environmental performance in the state than at the national level.
Source: Costanza, R. et al. 2004. Estimates of the Genuine Progress Indicator (GPI) for Vermont, Chittenden County, and Burlington, from 1950 to 2000. Ecological Economics 51: 139-155.
The legislation is the first step and now Vermont will begin the process of reviewing and formalizing a GPI with participation from state agencies, nonprofits, and community organization. With the passage of S.237, Vermont is proving that states really are the laboratories of democracy where new and exciting ideas can take hold.