Thinktank says nations need to focus on social prosperity in the fight against extremism

The G20 needs to move beyond economic growth and GDP as a measure of progress and factor in human wellbeing and social prosperity, one of its key advisors has said in a new report.

In a hard-hitting report due to be submitted to the G20 group of leading developed and developing countries, experts said that issues including the climate emergency and mental health meant judging progress required a different yardstick of success.

Against a backdrop of heightened political unrest in several major western nations despite continued growth in economic prosperity, Dennis Snower, president of the Global Solutions Initiative, a thinktank with links to the group of rich nations, said they should adopt a “recoupling dashboard” to assess wellbeing and environment alongside GDP.

The report, shared exclusively with the Guardian, Die Zeit and Der Tagesspiegel, said there was an urgent need for all nations to use the dashboard to dramatically increase their focus on social prosperity, as a key tool in the fightback against growing political extremism across advanced economies.

In an interview with the Guardian to mark the launch of the report, Snower said: “The financial crisis of 2008 made all these issues much more salient. Lots of people are now saying ‘I’m sorry but this system sucks’.

“In addition to being materially prosperous, we need empowerment and agency – that is the ability to shape our destiny through our own efforts – and we need solidarity – that is we need to be embedded within our social circles.”

In a proposal floated ahead of the G20 summit in Saudi Arabia later this year, the dashboard would include four separate measurements of economic and social prosperity: GDP per capita and environmental performance, as well as two new indexes assessing the “solidarity” and “empowerment” of citizens.

All four dimensions would need to be in harmony to show a country was adequately serving the needs of its citizens, according to the proposals drawn up by Snower and Katharina Lima de Miranda, an academic at the Kiel Institute for the World Economy.

The empowerment and solidarity indexes are drawn from existing major surveys of wellbeing compiled by the UN, World Bank and OECD, including assessments of job security, education levels, life expectancy, charitable activity, trust in strangers and confidence in government.

Under the new dashboard, New Zealand, Finland and Iceland are among the most progressive nations on earth, while the US dramatically underperforms its level of GDP per head.

India, China and Mexico rank among the worst performers on the dashboard of 35 nations.

The report said that, over the past decade, the dashboard shows the empowerment of citizens and GDP levels in the UK have increased yet social solidarity has fallen, suggesting that the country has become more “neoliberal”.

Although the plan could face resistance from some G20 nations and there is no guarantee the dashboard will ultimately be adopted, Snower said the proposal was the first stage in a drive to get countries to look beyond GDP as a signal of success.

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In the last four decades, globalisation and technological advances have generated significant growth in GDP, but have been accompanied by rising inequality, global heating and a sense of disempowerment among various groups.

Several countries around the world are staging attempts to move beyond GDP and focus instead on the wellbeing of citizens. Last year, New Zealand’s Labour coalition government unveiled what it said was a “world-first” wellbeing budget, raising its spending on mental health services and tackling child poverty.

Snower said that had nations monitored the wellbeing of citizens as much as GDP they would have had earlier warning signs about the fragmentation of society and rise of populist politics. He added: “Globalisation has costs that we’ve been blind to, and solidarity and empowerment have suffered.”