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

What HPI measuresHuman system

Ecosystem

Resource

demand

Ecosystem well-being

Human well-being

Culture

Social Capital

Governance

Economy

EducationHealthcar

e

Natural Capital

Biodiversity

CO2 emissions

Soil erosion

Water quality

Air quality

What HPI measures

Human system

Resource

demand

Happy and Long Lives

Resource Use

(divided by)

Human well-being

What HPI measures

Human system

Resource

demand

(Life Sat) * (Life Exp)

Eco Footprint

(divided by)

Human well-being

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 don’t oversimplifyBut they seldom tell the whole story

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

- Albert Einstein