The LAC region faces a number of persistent challenges to societal well-being, which are being aggravated by the COVID-19 pandemic. Addressing these challenges calls for a multidimensional approach to public policy. This chapter describes how such an approach can help LAC countries to address the highly interconnected challenges they face by: 1) systematically focusing government action on the well-being outcomes of greatest need; 2) fostering a more coherent, whole-of-government approach to improving societal well-being; 3) encouraging more anticipatory governance; 4) strengthening the social contract between governments and citizens; and 5) leveraging new forms of international co-operation. Practical examples are provided of how a multidimensional approach can be embedded throughout the policy cycle.
How’s Life in Latin America?
6. Policy through a well-being lens: Experiences from LAC and wider OECD countries
Abstract
Challenges to societal well-being in LAC countries
Improving the measurement of multidimensional well-being is important but not sufficient for promoting policies that foster inclusive and sustainable development. The main focus of this report has been to bring together the available comparative evidence on well-being and sustainability in the LAC region and to identify areas for statistical development. The scope of this exercise – spanning material conditions, quality of life, resources for future well-being and inequalities of opportunity – illustrates the breadth of the indicators needed to inform public policy about the full range of aspects that shape people’s lives. However, while the development of a comprehensive indicator set is essential for gaining a more complete picture of a country’s challenges and resources, the mere existence of such information is not enough to ensure its policy use. A well-being policy approach uses well-being indicators and evidence in an integrated way throughout the policy cycle to work towards a more comprehensive, long-term and integrated vision of development. It firmly focuses government action on what matters most to people and society, rather than on a single (or very narrow range of) objective(s), such as GDP growth, independently of others (European Union, 2021[1]). An increasing number of governments around the world are incorporating elements of such an approach (whether or not they use the specific “well-being” label) in recognition of the fact that dealing with the major challenges of the world today requires moving beyond traditional, short-term and silo-oriented ways of thinking and acting.1
Taking a multidimensional approach to public policy is especially important for the LAC region. The previous chapters have shown that even before the pandemic, Latin American and Caribbean countries were facing persistent challenges across multiple dimensions of well-being and sustainability and that the pace of progress in areas such as poverty and inequality was beginning to slow. Recent social unrest in the LAC region has underlined the magnitude of the disconnect and the dissatisfaction experienced by many citizens towards their governments. The impact of the COVID-19 crisis has further deepened the societal challenges, impacting every dimension covered in this report, and will likely continue to do so for the foreseeable future. The multifaceted nature of the policy challenges faced by the LAC region were explored in detail in the 2019 edition of Latin American Economic Outlook (OECD et al., 2019[2]). That report focused on how the development challenges and opportunities in the region have evolved with the region’s overall progress in the last decades, showing how GDP growth alone cannot address the structural obstacles to achieving inclusive and sustainable well-being due to the existence of various “development traps” that need to be addressed together (Box 6.1).
Box 6.1. Societal well-being in LAC countries is challenged by several “development traps”
The 2019 Latin America Economic Outlook identified four development traps in LAC countries, whose circular and self-reinforcing dynamics keep countries stuck in low levels of overall well-being:
A productivity trap: In LAC countries, stagnant productivity performance is associated with an export structure biased towards primary sectors with low levels of sophistication (such as agriculture, fisheries or mining). This export structure presents barriers to entry and does not generate backward linkages in the economy. This, in turn, makes it difficult for micro, small and medium-sized enterprises, which are abundant in LAC, to connect to international markets. Hence, the region is poorly integrated into global value chains. The LAC’s weak participation in these global chains is also associated with low levels of technology adoption and few incentives to invest in productive capacities. Overall competitiveness remains low, making it difficult to move towards a more sophisticated export structure and towards higher added-value segments of the global value chains. This fuels a vicious circle that negatively affects productivity. The COVID-19 crisis has deepened this productivity trap, as the Latin America and Caribbean region was hit especially hard by GDP contraction in 2020 (OECD, 2020[3]).
A social vulnerability trap: Most people in LAC countries who have escaped poverty have become part of a vulnerable middle class that relies on low-quality and often informal jobs with little or no social protection and low and often unstable income. Just over 61% of the region’s workers are in informal employment, defined as workers who do not benefit from employment-related social protection programmes, such as pensions, paid annual leave or sick leave (see Chapter 2). Unstable income prevents these workers from investing in further education and training and thus from moving to higher productivity jobs, keeping them stuck in vulnerable positions. The COVID-19 crisis has exacerbated this situation, bringing lower employment rates, a rising share of informal jobs in the labour market and increasing poverty (see Chapter 2). While digital technologies have helped many to navigate the crisis, the digital divide has prevented the most vulnerable from benefiting from these solutions (see Chapter 3, section on Knowledge and Skills). In addition, confinement measures combined with a lack of Internet access have generated a significant educational backlog among the most vulnerable children and youth, threatening human capital formation and thus future well-being (OECD et al., forthcoming[4]).
An institutional trap: The expansion of the middle class in LAC, which represented approximately one-third of the population before the COVID-19 crisis, has translated into mounting aspirations and demands by citizens for better quality public services and institutions. The region’s institutions have struggled to respond effectively, giving rise to an institutional trap, with declining citizen trust and satisfaction and deepening social disengagement. In turn, citizens’ low levels of trust and satisfaction with government is weakening public revenues and limiting governments’ capacity to create better services. In addition, undervalued public services are prone to becoming highly politicised and weakly professionalised, which limits their capacity and reinforces the low value placed on such services (OECD, 2020[5]).
The pandemic’s impact on poverty and inequality is likely to fuel further social discontent and poses additional challenges (OECD, 2020[3]), as it has impacted LAC in a context where trust in government is structurally low (see Chapters 3 and 4). Strengthening the social contract between governments and citizens is therefore essential to enable successful collaboration to improve the well-being of current and future generations.
An environmental trap: Lastly, the LAC countries are being held back by environmentally and economically unsustainable development models that have a strong bias towards material- and resource-intensive economic activities. Compared to 2000, intact forest area in the LAC region fell by around 9% (by around 400 000 square kilometres), while high levels of local water stress (e.g. 45% in the Dominican Republic and 26% in Mexico1) lead to water scarcity (see Chapter 4). The environmental trap is reducing the sustainability of economic development and heightening people’s vulnerability to environmental risk, with cascading effects on other well-being outcomes. This highlights the need to transform the economic development model of LAC countries and to direct post-COVID-19 economic stimulus programmes towards building economic models grounded in environmental sustainability (OECD, 2020[3]).
Note:
1. Water stress refers to gross freshwater abstraction as a proportion of the total available renewable freshwater.
These four development traps interact and reinforce each other, creating vicious circles that compromise progress towards greater societal well-being. For example, while addressing the productivity trap is a clear pathway for raising living standards in a region where jobs remain precarious and informality is prevalent (the vulnerability trap), informality itself acts as a headwind against efforts to increase productivity (the productivity trap). The lack of an adequate safety net and weak health and educational services (the institutional trap) further increases people’s vulnerability (the vulnerability trap). At the same time, this vulnerability trap reduces tax compliance, with less than half (45%) of the population in the focal countries believing that tax avoidance can never be justified (Chapter 4), creating further barriers to improving institutional quality (the institutional trap). Similarly, the environmental trap increases vulnerability by depleting the resources that are needed for sustainable economic development, and is worsened by low diversification of economic productivity (the productivity trap) as well as by institutional obstacles to securing direct investment in environmentally friendly technologies (the institutional trap). Given their interconnectedness, overcoming these complex development challenges requires a strong multidimensional approach and co-ordinated policy responses.
This chapter describes how a multidimensional lens can support efforts by LAC governments to raise well-being for all, now and in the future. In the following section, it outlines the building blocks of a multidimensional approach to public policy and describes its value in terms of: 1) guiding a whole-of-government approach to raising societal well-being; 2) helping to increase the effectiveness and efficiency of public spending; 3) encouraging more anticipatory governance; 4) strengthening the social contract between governments and citizens; and 5) informing international co-operation. Next, it provides an overview of emerging practice in applying a multidimensional lens to public policy, including relevant experiences from the LAC region and OECD countries. Unless otherwise stated, the LAC-specific findings in this section stem from bilateral meetings between the OECD Secretariat and LAC countries. The last section summarises the main conclusions and highlights opportunities to further develop a multidimensional approach to public policy in LAC countries.
The value of a multidimensional development approach in the LAC region
What is a multidimensional approach to public policy?
Multidimensional well-being frameworks take a wider perspective on societal progress, moving “beyond GDP” (European Union, 2021[1]). In addition to the Sustainable Development Goals (SDGs), adopted by 193 nations in 2015, more than half of all OECD countries have developed their own tailor-made multidimensional well-being frameworks and indicator sets, several of which pre-date the SDGs (Exton and Fleischer, forthcoming[6]; Exton and Shinwell, 2018[7]). Multidimensional frameworks aim to better address the multifaceted nature of country development by considering social, environmental and economic goals, as well as inclusion and sustainability (European Union, 2021[1]). Conceptual frameworks, which describe the different domains and dimensions of societal well-being, are often operationalised through a set of well-being metrics to assess levels of current well-being, inequalities and resources for future well-being:
Current well-being indicators include measures of quality of life (e.g. health, safety, knowledge and skills, social connectedness, civic participation) alongside measures of material well-being (e.g. income and wealth, jobs, housing conditions). Measuring the multiple dimensions of people’s current well-being provides a comprehensive view of the final outcomes that matter to people and that policy makers are ultimately seeking to improve.
Indicators of current well-being typically consist of a wide range of objective measures, often complemented by some subjective indicators. People’s own experiences of their lives (e.g. their life satisfaction, trust in others and in public institutions, fear of crime, and perceived discrimination) can alert policy makers to issues that are not picked up by objective measures (OECD, 2013[8]).2
The measurement of inequalities highlights the diversity of people’s experiences and living standards, based on personal characteristics (e.g. gender, age, socio-economic background, race or ethnicity) as well as the regional distribution of well-being outcomes within countries. Measuring inequalities is particularly relevant in the LAC region, where socio-economic and regional disparities run deep through societies, as seen in the previous chapters of this report.
Measures of sustainability focus on the key resources that are needed to underpin well-being now and into the future. The OECD and others conceptualise these as “capitals”, such as social capital, human capital, natural capital and economic capital (OECD, 2013[9]; Exton and Fleischer, forthcoming[6]). A “capitals approach” acknowledges that gains in current well-being are not sustainable if they deplete the resources that shape well-being over time. This includes trust and citizens’ willingness to positively contribute to societal outcomes (social capital), future health and educational outcomes (human capital), natural assets, ecosystems and their services on which we depend (natural capital), and the produced and financial assets that support sustainable economic development (economic capital).
In addition, measures of transboundary effects help assess country impacts on well-being elsewhere, for example in terms of carbon footprints, foreign aid or export of waste (Stats NZ, 2018[10]; CBS, 2020[11]; UNECE, Eurostat and OECD, 2013[12]).
Multidimensional frameworks place the focus on desired policy outcomes, rather than on the means to get there (Durand and Exton, 2019[13]). Over the last decades, governments have often given priority to GDP growth relative to other goals, implicitly assuming that well-being would follow. However, a growing body of evidence shows that economic growth and well-being do not necessarily go hand in hand. Around the world, countries with similar levels of GDP per capita display very different societal outcomes in other areas (OECD, 2020[14]) (OECD et al., 2019[2]). As discussed in Chapter 1, this is also true for middle- and upper-middle-income countries, including many LAC countries.3 The divergence between GDP and wider societal outcomes underlines the importance of looking “beyond GDP” and applying a multidimensional approach to societal progress (Stiglitz, Sen and Fitoussi, 2009[15]; Stiglitz, Fitoussi and Durand, 2019[16]). While reinvigorating economic activity is a key priority in the LAC region in the wake of the pandemic, the form and quality of economic recovery (rather than the quantity of economic activity alone) will determine the extent to which this can improve lives (Sarracino, 2019[17]).
A multidimensional approach to public policy focuses governments’ attention on the range of societal outcomes, as well as their interactions, that are key to a well-functioning and resilient society (European Union, 2021[1]). It does so by using well-being frameworks and measures in an integrated way and throughout the policy cycle (Figure 6.1).
Figure 6.1. Well-being frameworks and measures can inform every stage in the policy cycle
Source: Adapted from Exton C. and M. Shinwell (2018[7])
In the agenda-setting stage, a situational analysis of multidimensional outcomes helps governments to identify priority areas for action (Durand and Exton, 2019[13]). Comprehensive dashboards of well-being indicators, typically developed by National Statistical Offices, can provide a diagnostic tool to identify countries’ strengths and weaknesses and to compare performance against other countries. Even where comprehensive data do not (yet) exist, multidimensional frameworks can help guide the agenda-setting process as a conceptual tool, by encouraging governments to consider each of the dimensions and domains of societal well-being.
Embedding well-being frameworks in the policy formulation and budgeting stage is important to align government spending and policy development with identified societal priorities. From a practical perspective, using a smaller set of societal well-being indicators for this purpose helps to make the application of a multidimensional lens manageable in the budgeting and policy formulation stage (Stiglitz, Fitoussi and Durand, 2019[16]). The development of such smaller, policy-focused well-being frameworks has often been led by Treasuries or other central government bodies, based on various selection methodologies: in France, the 10 Nouveaux Indicateurs de Richesse (“the New Wealth Indicators”) were the product of broad public consultation; in New Zealand, the five overarching well-being objectives that guide the budget and policy development process were selected based on a diagnostic well-being scan, using the full suite of well-being indicators; and in Italy, a set of 12 well-being indicators was selected by an expert committee established by the Prime Minister (Durand and Exton, 2019[13]). Whether established based on data analysis, expert groups, focus group discussions or a combination of these approaches, the chosen set of well-being objectives needs to have broad societal legitimacy and support to serve as the basis for government decision-making (Durand and Exton, 2019[13]).
During and following policy implementation, the wider diagnostic set of well-being indicators can support monitoring and evaluation of the effectiveness of policy interventions on the desired outcomes, as input into the ongoing cycle of policy development. Here, a broad and comprehensive set of well-being indicators enables governments to track the development of well-being outcomes and their distributions over time and to evaluate the impact of specific policy programmes on desired societal outcomes.
The value of a multidimensional approach to public policy
Multidimensional well-being frameworks can underpin a better targeted, more coherent approach to addressing the complex development challenges that LAC countries face. Improving the well-being of society requires policies that take into account the wide range of well-being determinants and factors and how these vary across people and time. Anchoring policy in a comprehensive framework also supports the strategic alignment of outcome objectives across government. Around the world, central government departments tend to be organised in siloes where policies on economic, environmental and social issues are designed, implemented and monitored largely separately from each other. In these siloed processes, each ministry works towards its own set of objectives, with few incentives to invest in outcomes that fall under the responsibility of other departments (APPG, 2014[18]). In this context, economic statistics are often used mostly to assess economic policies, social statistics mostly for social policies, and environmental statistics mostly for environmental ones (Durand and Exton, 2019[13]). Instead, a multidimensional outcomes-based framework provides a clear statement about the aspects of people’s lives that the government is jointly seeking to improve, which typically span multiple government departments and imply a shared responsibility for their attainment. A multidimensional approach puts a core set of societal well-being objectives and indicators (spanning environmental, economic and social objectives and including short- and long-term perspectives) at the heart of all policy development. These multidimensional policy frameworks do not replace sectoral, inter-sectoral, regional or sub-population frameworks or analysis. They rather bring them together in an overarching, whole-of-government framework that enables policy makers to see the bigger picture and the ways in which their work and objectives intersect with those of other departments. Strengthening a whole-of-government approach to raising societal well-being is particularly important in the LAC region, as the development challenges it faces are highly interconnected rather than isolated processes.
Multidimensional outcomes frameworks can help to strengthen the effectiveness and efficiency of public expenditure to raise societal well-being in the region. Existing development traps mean that the fiscal space for LAC governments to invest in raising societal well-being is limited. While there are large differences between LAC countries, on average, tax revenues remain low at 23% of GDP in 2019 – more than 10 percentage points below the OECD average (OECD et al., 2021[19]). This makes it essential that governments deploy public spending in the most strategic and co-ordinated manner possible on the policies and programmes that will deliver the highest societal returns on investment. In addition to considering the well-being returns of each individual line of expenditure, governments need mechanisms for taking a holistic view across their budgets, to minimise negative spill-overs and maximise positive synergies. A common framework of shared outcomes, spanning all government departments, can help to facilitate this process. The ultimate aim of this co-ordination is to fully harness the opportunities for spending in each policy ministry to create positive feedback loops that support the objectives of other ministries (e.g. targeted spending on health or education that has positive impacts on labour force participation and productivity, or that reduces social protection expenditure). At the same time, such co-ordination can improve policy design by helping to anticipate and mitigate risks when well-intended actions in one policy area trigger problems in other areas that will then require additional expenditure to address (i.e. policies that add to the burden on social or environmental protection systems – for example, by raising the price of essential goods, triggering unemployment or increasing environmental pollution). As the COVID-19 crisis is putting further pressures on public revenues, co-ordinating spending on the policies and programmes that raise societal well-being in the most cost-effective manner is now more crucial than ever.
A multidimensional approach can help lay the foundations for rebuilding trust between citizens and governments in LAC countries. The pandemic has highlighted the important role of effective collaboration between governments and citizens in determining societal outcomes (Borgonovi and Andrieu, 2020[20]; Bartscher et al., 2020[21]). However, as described in Chapters 3 and 4 of this report, the COVID-19 crisis has hit many LAC countries in a context where the social contract between governments and citizens has already been structurally weakened. Strengthening trust in government is therefore fundamental for effective collaboration between governments and citizens in building forward, post-pandemic. The OECD distinguishes between five key drivers of trust in government that relate to government competencies (responsiveness and reliability) as well as the values that guide government actions and behaviours (integrity, openness and fairness) (OECD, 2017[22]). Establishing societal well-being objectives through a trusted and transparent participatory process that reflects the diversity of voices in society can help strengthen government openness, responsiveness and fairness. This is particularly important in the LAC countries, where civil society’s participation in the definition of societal goals and development strategies remains limited to date (OECD et al., 2019[2]; OECD, 2020[3]; Máttar and Cuervo, 2017[23]). Using an inclusive and participatory approach to define societal well-being priorities can help reconnect governments and citizens based on a shared sense of purpose, as a starting point for mobilising collective action towards these objectives. By operationalising a well-being vision into a well-being measurement framework, with indicators for each of the societal goals, governments’ public accountability towards these goals can be strengthened, laying a sounder basis for maintaining trust over time. The joint development of a well-being framework and measures can thus be an important part of wider efforts to reconnect governments and citizens that focus on each of the five drivers of trust in government. This includes the importance of further efforts to strengthen public sector integrity and accountability as well as promoting and protecting civic space, that is, the set of legal, policy, institutional and practical conditions necessary for non-governmental actors to access information, express themselves, associate, organise and participate in public life (OECD, 2017[24]).
Multidimensional frameworks can also support more long-term planning by encouraging systematic consideration of both well-being outcomes today and resources for tomorrow. Many multidimensional frameworks include forward-looking components, such as indicators of the social, human, natural and economic capital stocks that support future well-being. As such, they respond to the critique that GDP fails to take sustainability into account – in terms both of whether economic growth is itself sustainable over time, but also whether growth is coming at the price of environmental and social costs that offset the benefits of growth (Exton and Shinwell, 2018[7]). Maintaining a clear distinction between current well-being outcomes and resources for future well-being helps to clarify the important trade-offs that often exist between the two. This is particularly important as future well-being outcomes can easily be overshadowed by current concerns (Boston, 2016[25]).
Just as national policy making can benefit from broader, well-being focused perspectives, a multidimensional approach can also help inform international co-operation. The COVID-19 pandemic has highlighted the importance of multilateral governance and international co-operation for coping with and responding to the crisis. In the wake of the pandemic, and considering countries’ aspirations for more equal and sustainable futures, there is an opportunity to broaden the objectives of international co-operation towards wider well-being outcomes and to move beyond the current income-related indicators that still largely influence the allocation of public concessional finance today. Looking forward, a multidimensional approach can encourage a change in perspectives and practices, allowing for the creation of renewed partnerships that take into account the multidimensionality of development – by considering social, environmental and economic goals as well as their interconnections – and that favour a whole-of-government approach. Multidimensional frameworks can also help draw greater attention to transboundary effects and the interconnected nature of development outcomes, strengthening the basis for shared agenda-setting and a more coherent approach across countries. By helping individual countries better appreciate how their national and local policies may affect global public goods and cross-border outcomes, a multidimensional approach can encourage stronger alignment between national development outcomes, on one side, and regional and global ones, on the other.
The scope for mutual learning and policy dialogue based on a broader view of development outcomes applies more generally to a vision for a renewed multilateral and co-operation system based on equal footing. Despite the significant uptake of the 2030 Agenda by countries in the LAC region, including the Agenda’s multidimensional view of development, traditional economic indicators such as GDP and Gross National Income (GNI) continue to largely determine eligibility for donor assistance. Since higher levels of GNI per capita are taken to reflect a higher degree of development, middle and higher-income economies can be excluded from financial aid, as they are considered to be sufficiently developed. Yet often these countries continue to face important structural challenges and combine good performance on some objectives of the 2030 Agenda with lower performance on others. Wide within-countries inequalities may also translate into a country-level measure of GNI per capita that exceeds the threshold for Overseas Development Assistance eligibility whereas a large part of the country, or even the majority of the population, still falls short of it. These situations are not anomalies or idiosyncrasies reflecting specific national circumstances, but the natural consequence of relying on narrow, average measures that can hide large discrepancies and inequalities in well-being outcomes. A multidimensional approach is therefore important to inform regional dialogue and co-operation.
A multidimensional approach to public policy: Building on experience from Latin America and around the world
Although policy applications of well-being metrics and frameworks differ across countries, a number of emerging experiences are creating a strong knowledge basis for countries to learn from each other. The ways in which multidimensional concepts and evidence are integrated throughout the policy cycle differs between countries (Exton and Shinwell, 2018[7]; Durand and Exton, 2019[13]).This partly reflects the fact that the most effective approaches, models and tools need to work within local circumstances. There is therefore no such thing as a universal “multidimensional approach” to public policy. Nonetheless, recent decades have seen a growing number of practices embedding multidimensional perspectives throughout the policy cycle. This section describes these emerging practices, drawing on relevant case studies from LAC countries as well as wider OECD experiences. The evidence is organised around the main stages of the policy cycle (see Figure 6.1):
Agenda-setting: Building on a multidimensional framework to identify well-being priority areas for government action, favouring a long-term view and a focus on prevention.
Budgeting: Aligning government spending with societal well-being outcomes of highest priority and using the budget process as a tool to drive stronger policy coherence.
Policy formulation and implementation: Using multidimensional outcome-based frameworks to encourage a whole-of-government approach to raising well-being, to identify the package of interventions most effective in achieving the selected priority areas, and to strengthen policy coherence towards these priorities.
Outcomes-monitoring and policy evaluation: Using a multidimensional lens to monitor societal progress and to guide evaluations that consider the breadth of outcomes that are important to societal well-being.
Using multidimensional frameworks in agenda-setting
Using a multidimensional framework to guide the government agenda-setting process helps to focus government action on the well-being outcomes of the highest priority. More than half of OECD countries have developed well-being measurement and policy frameworks that go “beyond GDP” to specify the range of outcomes that are important for the well-being of people today and in the future (Stiglitz, Fitoussi and Durand, 2019[16]). In many countries, conceptual well-being frameworks have been underpinned by measurement frameworks that enable governments to identify priority areas for government action. Grounding government priorities in a diagnostic societal well-being scan can increase transparency on the range of outcomes that have been considered in agenda-setting. This can then play an important role in increasing public accountability and strengthening citizens’ trust in government. It also encourages more anticipatory governance by systematically considering current well-being outcomes as well as well-being resources for tomorrow. Even where comprehensive data are not readily available, conceptual frameworks can help embed wider considerations into the government agenda-setting process by outlining the core components of societal well-being – and their interrelationships – that need to be considered.
In the development of well-being frameworks, many governments have engaged in a national dialogue to come to a broadly shared vision, across politicians, civil society, businesses, academics and policy makers, on what makes for a good life (Exton and Shinwell, 2018[7]; León Guzmán, 2015[26]; RREE, 2010[27]). Such participatory processes can offer important value to both governments and citizens: well-listening governments can learn more about citizens’ perspectives, issues and concerns, particularly among those who are most vulnerable. At the same time, citizens can gain a deeper understanding of the often complex interplay between the societal well-being outcomes at stake and can play a more direct role in public agenda-setting and decision-making (OECD, 2020[28]). An inclusive process that actively reaches out to those who face higher barriers or are less used to or willing to “get involved” is essential to make sure that well-being frameworks incorporate the views of people in society who are underserved or less heard.
Table 6.1 provides an overview of the main “beyond GDP” frameworks and measures used by LAC governments. The most notable example of a multidimensional societal progress framework used by LAC countries is the 2030 Agenda, an internationally agreed set of policy goals and targets centred around the core elements of current well-being, inequalities, the sustainability of well-being over time, and transboundary effects. As will be discussed in more detail below, national development plans also play an important role in multidimensional agenda-setting in LAC countries. Some countries, including Ecuador and Bolivia, have developed their own local well-being frameworks to help inform policy development. In addition, the use of multidimensional measures, such as multidimensional poverty indices, has helped advance the “beyond GDP” agenda in LAC countries (Table 6.1).
Table 6.1. Overview of the main “beyond GDP” frameworks and measures applied to public policy in LAC countries
Note:
1. Official measures generally imply recognition of this measure by the national statistical office as one of the country's leading indicators, in addition to having periodic updates of its data. Non-official measures have generally been one-off, non-periodic efforts to collect data and calculate a measure, with more limited use and recognition.
Source: Adapted from Montoya and Nieto-Parra (forthcoming[29])
The 2030 Agenda has received significant commitments from most governments and statistical offices in the LAC region. Many LAC countries have adapted their institutional frameworks to comply with the 2030 Agenda (Table 6.2), appointing responsibility for the co-ordination of efforts towards achieving the SDGs to either existing public agencies or newly established (inter-institutional) commissions (ECLAC, 2021[30]). The 2030 SDG agenda has also been a significant driving force behind broadening the agenda-setting process and encouraging statistical development in the region. Several LAC countries have aligned their national development plans with the SDGs (CLAD, 2018[31]). For example, in Guatemala, the Plan Nacional de Desarrollo K’atun: nuestra Guatemala 2032 contains 129 goals, of which 90% are in line with the 2030 SDG objectives. Similarly, in Colombia, 98% of the goals established in the 2018-2022 National Development Plan (Pacto por Colombia, pacto por la equidad) are aligned with the SDG agenda (Joint SDG Fund, 2021[32]).
Table 6.2. Legal frameworks underpinning compliance with the 2030 Agenda in LAC countries
Source: Adapted from ECLAC (2021[30])
Some LAC countries have developed local well-being frameworks in consultation with stakeholders from across society. For example, in Ecuador, the notion of “buen vivir” (“good living”) refers to the ambition to pursue collective well-being in a sustainable relationship with the environment. The concept has its origin in the worldview of the indigenous peoples of the Andes and the Amazon (originally “Sumak Kawsay” in the Quechua language). Approved by referendum in September 2008, Ecuador incorporated the concept of Buen Vivir into its constitution. The Ecuadorian Constitution was the first in the world to recognise nature as having constitutional rights (León Guzmán, 2015[26]). Similarly to Ecuador, Vivir Bien was put forward as an alternative vision of development in Bolivia, building on principles of balance and harmony, with strong roots in the indigenous worldviews of the Aymara peoples of the Andean region. The Vivir Bien framework was incorporated into Bolivia’s 2009 Constitution to guide state action (Weyer, 2017[33]). Even though the Buen Vivir and Vivir Bien frameworks represent important steps in moving towards more balanced approaches to development, to date, they mostly remain conceptual frameworks with relatively little impact on the way public policy decisions are made.
Broad public and political support, as well as specific institutional mechanisms that anchor well-being priorities into long-term government operations, are important to ensure a continuous commitment (Montoya and Nieto-Parra, forthcoming[29]). For example, in Ecuador, changes in the political environment have resulted in a weakening of support for the Buen Vivir approach. Several OECD countries have “locked in” certain aspects of a multidimensional approach through legislation to help extend public accountability for societal well-being outcomes beyond electoral cycles (Durand and Exton, 2019[13]; Ormston, Pennycook and Wallace, 2021[34]). France, Italy and New Zealand, as well as Scotland and Wales, have created legal requirements for their governments to report on well-being outcomes and to engage in a regular public consultation on which well-being outcomes should be considered. For example, Scottish Ministers have a duty to consult on, develop and publish a new set of National Outcomes for Scotland at least every five years (Durand and Exton, 2019[13]). Although there is never a guarantee that an administration will give continuity to the previous administration’s strategy, a vision of overarching societal goals that has been developed for and by the people is generally more difficult to discard (OECD, EU and UN ECLAC, 2019[35]).
The use of multidimensional measures, such as multidimensional poverty indices (MPI), has also framed well-being-oriented programmes in LAC countries. The LAC region has a long tradition of measuring poverty from a multidimensional perspective. The MPI (Alkire, 2018[36]) complement traditional monetary poverty measures by capturing a wider range of deprivations that people face, including in areas such as health, education, housing, job and social security, and social connectedness (Annex 6.A). Although the MPI do not represent a comprehensive well-being framework as such,4 they are an important step towards using multidimensional measures in the policy process, for example to better target government initiatives to those most in need. Colombia, for instance, has used information from its national multidimensional poverty index to support the information from the national multidimensional targeting system (SISBEN IV) to deliver new social assistance programmes and services (Ingreso Solidario) to the most vulnerable during the COVID-19 crisis, going beyond traditional income-based poverty measures (MPPN, 2020[37]; Prosperidad Social, 2021[38]). The United Nations Human Development Index (UNDP, 2018[39]) and the Social Progress Index (Social Progress Imperative, 2020[40]) have also gained considerable traction in LAC countries over the last decades (Montoya and Nieto-Parra, forthcoming[29]). The use of these multidimensional measures has encouraged a more evidence-based approach to government agenda-setting and policy development by taking into account the multifaceted nature of progress.
National development planning plays a crucial role in the agenda-setting process in LAC countries and is increasingly fostering a multidimensional view of what development is about (OECD et al., 2019[2]). The concept of development planning gained currency outside the socialist countries in the 1950s and 1960s, following a broad consensus in favour of state intervention in the economy (e.g. the Marshall Plan). This popularity continued for more than two decades, after which the global popularity of national planning dwindled in the 1980s, especially among high-income countries. From the early 2000s onwards, LAC countries’ commitment to the UN Millennium Development Goals – followed in 2015 by the approval of the 2030 Agenda – motivated many of them to pursue their development goals in a more structured way. This has led to the emergence of a new generation of development plans (Chimhowu, Hulme and Munro, 2019[41]). Currently, at least 18 LAC countries have national development plans in place (OECD et al., 2019[2]). A review of development plans in the LAC region against the OECD Well-Being Framework using text mining analysis shows that, in terms of current well-being, national development plans tend to focus most strongly on income and wealth, reflecting widespread concerns in the region about poverty (see Figure 6.2). In addition, the well-being domains of knowledge and skills, environmental quality, safety, civic engagement, and health also feature relatively commonly. There is more limited reference in development plans to issues of work and job quality, housing and social connections, whereas subjective well-being and work-life balance are least commonly mentioned as part of the development plans (see Figure 6.2).
Figure 6.2. Current well-being domains featuring in LAC national development plans
Note: The colour intensity indicates the frequency of references in the national development plans of 16 LAC countries to the dimensions of the OECD Well-Being Framework. As a colour darkens, the frequency of references to a given dimension within the plan increases. The sum of the relative frequencies across all dimensions in a country's national development plan is 100. Each country’s text data comes from the latest development plan (or its equivalent) approved by the end of 2020. See methodological details in Annex 6.B.
Source: Authors’ elaboration based on text analysis of country national development plans
In terms of sustainability, national development plans in LAC countries focus strongly on economic capital, with more limited references to the other resources needed to sustain well-being over time. The text mining analysis indicates that development plans in the LAC region refer most frequently to the development of economic capital (such as gross capital formation, infrastructure investment, research development and managing external debt). This is followed by references to aspects of social capital, such as trust in government and institutions, perceptions of corruption, and tax morale. Across LAC countries, natural capital (such as in relation to greenhouse gas emissions, endangered species and deforestation) features less clearly. The development of human capital (such as in relation to youth Not in Employment, Education, or Training [NEET], child malnutrition and tobacco consumption) is least frequently referred to in LAC national development plans.
Figure 6.3. Future well-being domains featuring in LAC national development plans
Note: The colour intensity indicates the frequency of references in the national development plans of 16 LAC countries to the dimensions of the OECD Well-Being Framework. As a colour darkens, the frequency of references to a given dimension within the plan increases. The sum of the relative frequencies across all dimensions in a country's national development plan is 100. Each country’s text data comes from the latest development plan (or its equivalent) approved by the end of 2020. See methodological details in Annex 6.B.
Source: Authors’ elaboration based on text analysis of country national development plans
Embedding a stronger long-term focus in national development plans is important to ensure that the plans foster more sustainable development. Improving well-being is a long process and cannot be achieved by a single administration. Using a multidimensional framework to systematically consider both well-being today, as well as resources for tomorrow, can help to identify sustainable pathways for development. Nonetheless, as the heat map above shows (Figure 6.3), apart from economic capital, LAC national development plans include very few references to the other important resources needed to sustain well-being over time. This may partly reflect the large diversity in the scope of LAC national development plans. In some countries, development planning is a medium-term process linked to a single (4 to 6 year) administration, as in Colombia, Costa Rica, Ecuador and Mexico. In others, these plans seek to define long-term development goals and strategies beyond the current political cycle, as in Paraguay and the Dominican Republic (ILPES/AECID, 2020[42]). Several LAC countries, including Paraguay and Uruguay, have formulated long-term plans through participatory processes with a broad representation of different stakeholders (Box 6.2). Aligning national development plans with the 2030 Agenda, as is done for example in Paraguay, Argentina and Guatemala, also encourages a longer-term perspective. Combining long-term planning with strong accountability mechanisms for current achievement is important to leverage the strengths of both approaches (see later section on “Multidimensional Monitoring and Evaluation”).
Box 6.2. Participatory approaches to developing national development plans in Paraguay
The Paraguay 2030 National Development Plan
Already in 2014, Paraguay published a long-term roadmap for public policy up to 2030. The 2030 Paraguay National Development Plan was the first to bring different sector plans together in a single, overarching plan focused on three strategic axes: 1) poverty reduction and social development; 2) inclusive economic growth; 3) strengthening Paraguay’s projection in the world. These axes were intersected by four cross-cutting themes: 1) equality of opportunity; 2) efficient and transparent public management; 3) territorial development and land management; and 4) environmental sustainability. The preparation of the development plan, published in December 2014,1 was led by the Technical Secretariat for Economic and Social Development Planning (STP, by its Spanish acronym) and built on a participatory approach to establish a country vision up to 2030 and to define concrete development goals (OECD, 2018[43]).
Once the 2030 Plan had been established, the Paraguay government created a select committee within the planning authority to monitor its implementation. The 2030 National Development Plan has been an important mechanism to align both sector-based strategies and sub-national strategies with those for the country as a whole. The goals embedded in this plan have provided sub-national decision-makers with more precise guidance about the most strategic areas for public investment. Ministries, secretariats and other public entities must prepare sector plans based on the objectives and strategic axes of the National Development Plan, in co-ordination with the Planning Secretariat. Although all policies are expected to be aligned with the Plan’s guidelines, key elements such as the annual budget allocation have nonetheless remained largely independent of the planning process (Montoya and Nieto-Parra, forthcoming[29]).
After the next administration took office in 2018, the government decided to update the 2030 National Development Plan. The current administration took up the plan prepared by the past administration and built on that basis. Among other changes, they added a fourth strategic axis: the political and institutional strengthening of Paraguay. In addition, specific objectives were adjusted throughout this follow-up process, defining monitoring indicators, baseline values and targets for 2023 and 2030.
Note:
1. By Presidential decree No. 2794.
Aligning government budgets with societal well-being priorities
In LAC countries, limited alignment between national development plans and budget allocation reduces the plans’ impact on overall well-being outcomes. Government budgets are a key instrument to link government priorities with the allocation of resources for implementing these priorities (Durand and Exton, 2019[13]). Currently, there is no clear connection between national development plans and government budget allocation in many LAC countries, and often funding is insufficient to fully implement the plans (OECD et al., 2019[2]; Montoya and Nieto-Parra, forthcoming[29]). National planning, budget allocation and policy design remain separate processes in many LAC countries, which have their own discretionary criteria and ways of functioning. Budgeting is linked to the development planning process in a few countries, such as Costa Rica, Ecuador and Colombia (Montoya and Nieto-Parra, forthcoming[29]). For example, in Colombia, development plans are co-ordinated by the National Planning Department and include a strategic part (the Development Plan, containing objectives and programmes) as well as a financing part (the Multi-year Investment Plan) (Box 6.3). Nonetheless, the process of budget allocation remains independent of the planning process in most of the region’s countries (RedSNIP, 2020[44]). This means that, in many cases, the objectives in the national development plans provide a country vision, at times even embedded within a country’s constitution, without having much influence over crucial elements of government decision-making, such as budget allocation.
Box 6.3. Linking development planning to budget allocation: The Colombian National Planning Department
The Colombian National Planning Department (DNP, by its Spanish acronym) is responsible for co-ordinating national development planning as well as the government budget process. After each administration takes office, the DNP prepares a draft national development plan for consultation, in co-ordination with the President’s office and the Ministry of Finance, based on the elected government’s campaign proposals. The national development plan defines an administration’s objectives and outlines guidelines and targets for the responsible public institutions, including indicators to track progress towards the objectives. In the 2018-2022 National Development Plan, each target was also associated with one or two SDGs from the 2030 Agenda (DNP, 2020[45]).
In addition to co-ordinating the planning process, the DNP is also responsible for co-ordinating the Multi-year Investment Plan, which allocates the national public investment budget to the strategic objectives in the National Development Plan and provides strategic guidelines to public institutions in charge of policy implementation. The first draft of the National Development Plan, prepared by the DNP, goes through three different bodies to ensure: 1) civil society’s participation; 2) technical and financial feasibility; and 3) enactment into law.
In the first stage, the development plan is submitted to a National Planning Council, which gathers input into the draft proposals by bringing together representatives from territorial entities, the economic, social, environmental and education sectors, as well as civil society organisations, indigenous peoples, ethnic minorities and women’s groups (CNP, 2020[46]). In the second stage, the objectives and targets of the draft plan are discussed with the public institutions responsible for achieving them, and adjusted if necessary. The National Council of Economic and Social Policy (CONPES) – consisting of the President, Vice-President and all ministers – reviews the draft plan before the Ministry of Finance links it to the Nation’s General Budget Project. In the final stage, the government presents the draft plan to Congress to allow for any final changes. Once approved, Congress issues the National Development Plan by law, which then forms the basis and strategic direction for the government programme. The National Planning Department subsequently provides technical assistance and monitors and evaluates policy implementation.
The budget process can be an important lever for strengthening policy coherence towards overall societal objectives. Carrying societal well-being priorities through from national development plans into the process of allocating the government budget is important to increase the responsiveness of government actions to the needs of current and future generations. Developing clear financing streams for the objectives outlined in national development plans, as in the case of Colombia, is important to ensure their effective implementation. A next step would be to use societal well-being priorities – that have broad public legitimacy – to inform the allocation of the annual budget across government. An increasing number of countries are starting to use well-being frameworks as tools to integrate a wider multidimensional perspective into the budget process. France, Italy and Sweden, for example, have complemented standard economic and fiscal reporting that typically accompanies the budget with the monitoring of a dashboard of well-being indicators in order to put the budget discussion into a wider multidimensional perspective (Durand and Exton, 2019[13]). Similarly, several LAC countries are using SDG indicators to inform the budget deliberations and to track budgetary contributions to the SDG objectives. For example, the Mexican government links its budgetary programmes to SDG goals, to determine the share of each goal linked to any budgetary programme and, conversely, the number of budgetary programmes linked to each goal (Ministry of Finance and Public Credit and UNDP, 2017[47]; Hege and Brimont, 2018[48]). Due to their international focus, the SDGs are very broad in nature. Therefore, localising the SDGs within countries’ unique contexts is fundamental to make them operational as part of the budgeting and policy development processes.
Assessing budget proposals for their expected impact on selected well-being priorities can help embed a well-being lens into strategic decision-making and policy development. In addition to their use in informing the budget narrative and tracking budgetary contributions to societal well-being goals, well-being frameworks can also serve as an ex ante evaluation framework that enables a more comprehensive assessment of budget proposals in light of a country’s societal objectives. By doing so, well-being frameworks can not only help answer questions on “where should we be spending less or more?” but also on “how can we spend it better?”, by encouraging the development of budget proposals that minimise negative spill-overs and maximise synergies between spending programmes. For example, since 2019, the New Zealand government assesses all budget proposals against a set of five overarching societal well-being priorities, to help drive policy coherence towards these societal objectives (Box 6.4). The Government of Canada has also taken steps to build a better understanding of how its budget investments affect people differently, building on its Gender-Based Analysis Plus (GBA+) methodology.5 As a next step, the Canadian Government is now working to better incorporate well-being measures into its budget decision-making (Government of Canada, 2021[49]). Other countries and regions have similarly expressed an interest in more closely integrating multidimensional outcomes frameworks into their budgetary processes, including Ireland (Government of Ireland, 2021[50]), Iceland (Jakobsdóttir, 2020[51]) and Wales (Future Generations Commissioner for Wales, 2019[52]).
Box 6.4. The New Zealand Wellbeing Budget
In May 2019, the New Zealand Government released its first Wellbeing Budget. The Wellbeing Budget builds on analysis of well-being data in the New Zealand Treasury’s Living Standards Framework (LSF) Dashboard (https://lsfdashboard.treasury.govt.nz). The LSF dashboard, first released in December 2018, is a national adaptation of the OECD Well-Being Framework. It includes twelve domains of current well-being and inequalities in outcomes for each of these twelve domains, as well as indicators of resources for future well-being (Human capital; Social capital; Financial and physical capital; and Natural capital) (New Zealand Treasury, 2019[53]).
Since 2019, the New Zealand Treasury uses analysis of data in its Living Standards Framework Dashboard to identify a long list of well-being priorities. Based on this list, a smaller set of budget priorities are shortlisted by ministers, and then the full Cabinet decides on the final budget priorities (Huang, Renzio and McCullough, 2020[54]). Between 2019 and 2021, the New Zealand Wellbeing Budget priorities have focused on: supporting a just transition to a low-emissions economy, shaping the future of work, reducing inequalities, improving child well-being, and improving physical and mental health outcomes (New Zealand Government, 2018[55]; New Zealand Government, 2021[56]; New Zealand Government, 2019[57]). The selected budget priorities are described in a Budget Policy Statement. As part of its well-being approach, from 2019, the Budget Policy Statement includes a Wellbeing Outlook (an analysis of current well-being, inequalities, and the sustainability of well-being outcomes) to complement the budget’s traditional Economic and Fiscal Outlook as the basis for setting government priorities. The new Wellbeing Outlook helps to create greater transparency in terms of the data that underpins the selected well-being priorities.
Following the release of the Budget Policy Statement (generally in December), ministries are invited to submit funding requests for policy proposals that are aligned with the government well-being priorities. In doing so, government ministries are strongly encouraged to work together to put forward budget bids that target the overarching well-being priorities. Ministers are appointed to co-ordinate the budget bids to help drive policy integration. As a result, the 2019 New Zealand budget saw as many as 10 agencies come together to jointly put in a budget bid to help address issues of family and sexual violence (Huang, Renzio and McCullough, 2020[54]). In their proposals, ministries are required to present evidence of how their funding request supports well-being, and to present expected well-being impacts, which build on a cost-benefit analysis model (including an optional monetary evaluation component, called CBAx) that has been specifically aligned with a well-being approach (New Zealand Treasury, 2018[58]). Those policy proposals that are considered to best support the identified societal well-being priorities are selected, upon which the final budget is released (usually in May) (Figure 6.4).
Figure 6.4. New Zealand’s well-being budget process
Source: New Zealand Government (2018), Budget Policy Statement, Budget 2019
A multidimensional approach to policy formulation and implementation
A lack of integration and co-ordination of strategies, policies and implementation has long been recognised as one of the main impediments to sustainable development, globally (OECD, 2019[59]). Inconsistent policies and fragmented programmes entail a higher risk of duplication, inefficient spending, lower quality of service and difficulty in meeting goals. This ultimately leads to a reduced capacity to deliver and to unsustainable choices and pathways (De Coning, 2007[60]; OECD, 2019[59]). The associated costs – both in terms of reduced well-being and of financial spending – are significant. In the United States, for example, the US Government Accountability Office has estimated that actions from Congress and executive branch agencies to reduce fragmentation, overlap and duplication in government programmes from 2011 to 2018 have generated about USD 262 billion in reported financial benefits (GAO, 2019[61]; OECD, forthcoming[62]).
A multidimensional lens can support policy makers in designing policies that are mutually reinforcing and that anticipate and manage any trade-offs that may occur. Maximising synergies and minimising disruption is particularly important in the LAC region, where highly interconnected development challenges need to be addressed through limited government budgets that have become further constrained by the impact of COVID-19 (OECD, 2020[3]). The UNSSC Knowledge Centre for Sustainable Development builds on the metaphor of a Rubik’s cube to illustrate the importance of policy coherence for sustainable development (Van Weerelt, 2018[63]; OECD, 2019[64]). Thinking of the different sides of the Rubik’s cube, it is easy to see how movements on one side of the cube impact on the others. Policy makers need to constantly be mindful of the fact that what appears to be a solution in one area may inadvertently cause damage in another area. Increasing this awareness helps to create a more coherent, effective and efficient approach to raising societal well-being (Van Weerelt, 2018[63]; OECD, forthcoming[62]).
Since the 2000s, development planning has contributed to foster a whole-of-government approach to public policy in LAC countries. National development plans are an important co-ordination mechanism for government strategies and programmes, both horizontally (across the sectors of government) and vertically (between different government levels) (OECD et al., 2019[2]). Several LAC countries have created a specialised planning agency responsible for preparing development plans and co-ordinating policy development across sectors. These planning authorities are usually responsible for drafting development plans and strategies and overseeing implementation, both at the national and sub-national level. By co-ordinating the policy planning process, and in some cases also government budget allocation, planning authorities have contributed to improving co-ordination across different government departments and between different levels of government (Montoya and Nieto-Parra, forthcoming[29]). In some countries, planning authorities are also responsible for monitoring and evaluating the implementation of public policies.
Screening policy proposals ex ante against a core set of societal well-being objectives can further strengthen policy coherence. In recent years, several OECD countries have started to put a set of societal progress objectives at the heart of all policy development (Box 6.5). Doing so can help overcome siloed approaches in which each ministry works towards its own set of objectives, with few incentives to invest in outcomes that fall under the responsibility of other departments (APPG, 2014[18]). Assessing policies right across government departments for their multidimensional well-being impact, ex ante rather than ex post, can lead to better strategic alignment and stronger cross-government collaboration in addressing societal issues. In addition, multidimensional frameworks can draw attention to well-being issues that are commonly overlooked or left unaddressed in more traditional analysis, but which can nonetheless form barriers to progress in other areas. Even though considering externalities and spill-over effects has long been an important part of the work of many policy analysts, putting a core set of societal objectives at the heart of all policies makes such assessments more systematic in three important areas: 1) the agencies assessing their impacts on multidimensional outcomes; 2) the domains and dimensions of societal well-being that are being considered; and 3) the consistency in indicators used to measure and report on these domains and dimensions (OECD, forthcoming[62]).
Box 6.5. Embedding well-being priorities in the policy development process
Wales: The Well-being of Future Generations Act
The Well-being of Future Generations (Wales) Act 2015 requires all public bodies to place seven well-being goals – selected based on a large-scale public consultation process – at the centre of their decision-making. These seven goals are: a prosperous Wales, a resilient Wales, a more equal Wales, a healthier Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales. The Act emphasises that each of these goals is as important as the others and that, as much as possible, public bodies must work towards all of them, rather than focusing on one or two. The Act sets out five ways of working by public bodies to achieve the seven goals: thinking long-term; integrating objectives across government; involving a wide group of societal stakeholders; working in collaboration; and favouring prevention (acting to prevent problems occurring or getting worse).
In total, 44 public bodies are currently subject to the duties of the Act, ranging from the Welsh Government to local health boards, fire and rescue authorities, the national parks authority and several national bodies (such as the Arts Council, Higher Education Funding Council and Sport Wales). As the Act applies to Welsh Minsters and national councils, as well as to local authorities, it forms an important mechanism to encourage both horizontal and vertical coherence across government towards shared objectives. While the Act places a well-being duty on all public bodies to foster multilevel alignment in well-being strategies; importantly, it does so in a way that allows flexibility for context-appropriate goals and strategies at the local level.
Transparency and accountability are an important part of the Act. The Future Generations Commissioner supports the public bodies listed in the Act to work towards achieving the well-being goals. When the Future Generations Commissioner for Wales makes recommendations to a public body, this body must publish a response. If the public body does not follow a recommendation, it must explain why, and what alternative action it will take. In addition, Audit Wales is responsible for assessing the extent to which the 44 public bodies are acting in accordance with the sustainable development principle (including the “five ways of working”) when setting their well-being objectives and taking steps to meet them. The Auditor General must provide a report on the examinations to the National Assembly for Wales at least a year before each Assembly election (Audit Wales, 2020[65]).
Source: Future Generations Commissioner for Wales (2021[66]), http://www.futuregenerations.wales/about-us/future-generations-act
While many LAC governments approve development plans by law, there are often no binding mechanisms in place to ensure that the identified well-being priorities will be considered by all government agencies (Montoya and Nieto-Parra, forthcoming[29]). Recent experience from Costa Rica nonetheless highlights the value of ex ante assessments of government policies and programmes against societal priorities (Box 6.6). The approach, in this case focusing on the impacts of social sector programmes on poverty, could be further extended to assess policies across sectors against a core set of well-being priorities. Where data are not available to support multidimensional impact assessments, qualitative policy screening methodologies could be used. For example, the government of Bhutan uses Multiple Criteria Analysis to assess policy proposals against nine domains that are seen as the key ingredients of Gross National Happiness (GNH)6 (GNH Centre Bhutan, 2021[67]). Concept notes for new policy proposals are submitted to the Gross National Happiness Commission, which then gathers experts to apply the screening tool by providing a qualitative judgement about whether the proposed policy is expected to have a negative, uncertain, neutral or positive effect on the GNH domains (GNH Centre Bhutan, 2021[67]; Durand and Exton, 2019[13]). In a similar way, the United Arab Emirates’ Happiness Impact Assessment Tool involves a qualitative assessment of the impact of a given proposal on seven domains that are considered to shape societal well-being.7 Policy proposals must work through a set of screening questions for each domain before they can be presented to the Cabinet (Government of United Arab Emirates, 2021[68]; Durand and Exton, 2019[13]). The goal of such impact assessment tools is to foster dialogue among stakeholders and to guard decision-making against unbalanced perspectives, rather than being used as a tick-box exercise.
Box 6.6. Ex ante impact assessment in Costa Rica
Ex ante impact assessments helped the Costa Rican government to achieve more efficient budget allocations and to improve the co-ordination of several social policy interventions. As part of the preparation of Costa Rica’s 2019-2022 National Development Plan, the Costa Rican planning authority (MIDEPLAN) used statistical modelling to assess the opportunity cost of expanding different programmes in terms of their potential impact on reducing multidimensional poverty. To that end, a series of simulations were carried out to quantify the impact of 13 key social policy interventions on the multidimensional poverty index over four years (2019-2022) (MIDEPLAN, 2018[69]). The selected social programmes were part of the overall poverty reduction strategy and included scholarships, school canteens and health campaigns that target different dimensions of poverty, such as health outcomes, educational outcomes and social security (Table 6.3).
The simulations were based on a model that allowed introducing a controlled change in certain variables, such as the number of scholarships offered, to observe its impact on the multidimensional poverty index. This enabled MIDEPLAN to identify the combination of beneficiaries for the 13 social programmes that would have the biggest impact on reducing the multidimensional poverty index. The identified combination would decrease multidimensional poverty between 2.3% and 2.7% by 2022, representing between 36 639 and 41 408 households being lifted out of poverty. The model also provided insights into differences in impact at the national and regional levels.
Table 6.3. Ex ante impact assessment of a co-ordinated strategy to reduce multidimensional poverty in Costa Rica
Note: Estimations were made using 90% confidence intervals. In all cases, 1 000 simulations were carried out. The simulation model was based on the following assumptions: 1) new beneficiaries did not benefit from the programme in the previous year; 2) beneficiaries are distributed regionally according to the proportion of poor households experiencing each type of deprivation; 3) efficiency in resource allocation is achieved by prioritising multidimensional poor households in each region; and 4) there are no “leaks” in the allocation systems.
Source: Adapted from MIDEPLAN (2018[69]) and Fernandez (2018[70]).
In addition to strengthening horizontal alignment across ministries, a joint well-being framework can help align the contribution of each level of government to societal objectives.8 Sub-national governments play a vital role in achieving well-being objectives, as they have core responsibilities for many well-being areas. They are also in more direct contact with their communities, including the most vulnerable groups, for example, through social workers and frontline staff (OECD, 2018[71]). When using well-being frameworks to create more aligned multilevel governance, sufficient flexibility for local governments to focus on well-being priorities that are particularly relevant in their area is important (OECD, EU and UN ECLAC, 2019[72]) (Box 6.5). National planning offices form an important mechanism to align national and sub-national level development strategies. For example, in Paraguay, the development plan up to 2030 helps to align both sector-based strategies at the national level as well as national and sub-national strategies (Box 6.2). Strong vertical alignment also offers opportunities for peer learning and upscaling of successful well-being approaches developed at local and regional levels, as around the world sub-national governments are at the forefront in applying well-being metrics and concepts in public policy (Whitby, Seaford and Berry, 2014[73]; OECD, forthcoming[62]).
Applying a multidimensional lens to policy calls for mechanisms to build new understandings of the interconnectedness of societal outcomes and of ways of incorporating these in policy design and implementation. A challenge in using a multidimensional lens in public policy is that it can quickly push analysts beyond their areas of expertise (Durand and Exton, 2019[13]). Several of the well-being initiatives led by national governments in countries have therefore included components of civil service capacity-building. For example, the United Arab Emirates’ Wellbeing Academy9 offers programmes to federal and local government entities on how to integrate the consideration of multidimensional outcomes into policies, programmes and services. Multidisciplinary teams or commissions can also play an important role in bringing together the array of specialist knowledge that is needed to assess policies for their multidimensional impacts. While multidisciplinary capability is particularly important for central government agencies, there is also value in considering how the knowledge base that underpins each of the identified societal well-being goals can be made more readily accessible across the system of government (OECD, forthcoming[62]).
Multidimensional monitoring and evaluation
Using multidimensional indicators to monitor societal progress
Monitoring societal outcomes, in addition to policy outputs, helps to stay focused on the range of goals that policies are ultimately trying to achieve (OECD et al., 2019[2]). Underpinning societal progress frameworks with a clear set of metrics not only fosters more evidence-based agenda setting, it also increases public accountability for progress towards societal well-being goals and provides valuable input into the policy development process. Around 2019, at least 14 LAC countries had monitoring and evaluation systems in place or were developing them (OECD et al., 2019[2]). Several monitoring initiatives in LAC countries have focused on bringing together multidimensional indicators on societal well-being outcomes. This includes outcome monitoring initiatives led by INEGI and CONEVAL in Mexico, initial steps to measure Buen Vivir in Ecuador, as well as ongoing work on a Social Well-being Measurement Framework in Chile (Box 6.7).
Box 6.7. Well-being outcomes monitoring initiatives in LAC countries
Well-being measurement initiatives in Mexico
In Mexico, the National Institute of Statistics and Geography (INEGI, by its Spanish acronym) has developed a well-being indicators portal (www.inegi.org.mx/app/bienestar) that brings together objective and subjective indicators for 12 domains of current well-being, covering both material living standards and quality of life. The well-being indicators are provided for each Mexican state, to highlight opportunities and constraints for regional development (OECD, 2015[74]). The regional well-being portal, constructed in collaboration with the OECD, builds on the OECD Well-Being Framework. Well-being dimensions captured in the INEGI indicator set include: Accessibility to services; Community; Education; Work; Work-life balance; Income; Environment; Civic engagement and governance; Health; Satisfaction with life; Safety; and Living environment (OECD, 2015[74]).
In addition, for more than 10 years, Mexico’s National Council for the Evaluation of Social Development Policy, CONEVAL, has been generating information that serves as input for the design and evaluation of social development policy (CONEVAL, 2020[75]). CONEVAL has created a Social Policy Monitoring System (SIMEPS) that follows a range of indicators over time to help assess the achievement of objectives in social development programmes and the National Development Plan. While this system includes some indicators on well-being outcomes (e.g. the percentage of students achieving at least the basic proficiency level in the PISA test), it mainly monitors output indicators (e.g. the school enrolment rate). CONEVAL is also in the process of developing a Social Rights Information System (SIDS, by its Spanish acronym) comprising a wide set of indicators that complement the multidimensional poverty measures, including indicators on education, health, social security, nutrition and living standards. Mexico’s 2013-2018 National Development Plan has, for the first time, incorporated indicators to track progress on the achievement of the set objectives. Based on these indicators, CONEVAL prepared its first assessment of progress for the six-year period (CONEVAL, 2018[76]).
The measurement of Buen Vivir in Ecuador
Since 2015, the National Statistics Office of Ecuador (INEC, by its Spanish acronym) has advanced an agenda for measuring well-being under the Buen Vivir precepts. In designing the measurement framework, INEC undertook substantial consultation with international experts, academics, civil society, private sector representatives, international organisations and focus groups consisting of Ecuadorean citizens (León Guzmán, 2015[26]; García, Moreno and Viteri, 2018[77]). This process resulted in the selection of 25 indicators across seven dimensions of well-being: Housing; Water and sanitation; Health; Employment and economic security; Education; Community relations and subjective well-being; and Environmental practices. The Buen Vivir measurement framework has an aspirational aim to measure those things that make for a good life, to complement existing measures with a focus on well-being deprivations, such as the Multidimensional Poverty Index.
Despite the progress on translating the Buen Vivir framework into a monitoring framework, the measures are not collected regularly by INEC. Unlike the Multidimensional Poverty Index, the Buen Vivir measures have no official status. This partly reflects changes in Ecuador’s political environment, which have resulted in weakened support for the Buen Vivir approach, promoted initially by former President Rafael Correa. While there is continued consensus on the need for robust poverty statistics, there is less support for the measurement of people’s wider well-being outcomes, partly given the financial cost of additional data collection (Montoya and Nieto-Parra, forthcoming[29]).
The Social Well-being Measurement Framework in Chile
The Chilean Ministry of Social Development and Family is currently developing a Social Well-being measurement framework. Social protests in Chile during 2019 highlighted the need to better understand the needs and concerns of citizens. In response, the government has started development of a measurement framework and instrument to collect more comprehensive data on Chileans’ well-being and quality of life. Using the OECD Well-Being Framework as a starting point, the Chilean Ministry of Social Development is in the process of developing a Social Well-being Survey to complement the existing National Socio-economic Characterisation Survey (CASEN), which provides data on material living standards (Income; Work and earnings; and Housing outcomes). The Social Well-being Survey aims to collect complementary data on quality of life, focused on both outcomes and opportunities. This includes indicators on: Health; Work-life balance; Education; Social relations; Civic engagement and governance; Environmental quality; Personal security; and Subjective well-being (Ministry of Social Development and Family, 2020[78]).
Underpinning societal well-being objectives with a clear set of metrics is an important part of increasing accountability. For example, in Colombia, the National Management and Results Evaluation System (SINERGIA, by its Spanish acronym) helps to track progress against its National Development Plan objectives. SINERGIA has three high-level objectives: 1) monitoring the implementation of the National Development Plan; 2) monitoring progress at the sub-national level; and 3) evaluating the implementation and impact of selected public policies (SINERGIA, 2020[79]). SINERGIA is also responsible for monitoring progress towards the SDGs. To monitor the National Development Plan objectives, SINERGIA continuously updates its open system containing information on the progress achieved by 24 sectors, 61 public entities, and 96 programmes, building on over 670 indicators. SINERGIA generates regular progress bulletins for government sectors and the Presidential Council for Management and Compliance, which also inform the President’s periodic reports to Congress. In addition, SINERGIA has an early warning system for public institutions that are lagging in progress towards meeting their goals, which allows policy makers to implement necessary corrections to increase the chances of goal fulfilment.
Using multidimensional frameworks to evaluate “what worked” for improving well-being
Using multidimensional frameworks to evaluate “what worked” for improving societal well-being can help accelerate societal progress. Multidimensional frameworks provide more comprehensive guidance for policy makers on the range of outcomes that needs to be considered in evaluating the success of government interventions, including inequalities and intergenerational impacts. In recent decades, important advances have been made internationally in terms of the range of data that is used to assess policy impacts beyond traditional outcome indicators such as income, educational qualifications and health status. Government agencies, such as HM Treasury in the United Kingdom, have developed specific guidelines for using well-being as a core consideration when appraising and evaluating public policy (Durand and Exton, 2019[13]). Building capacity for ex post evaluation of well-being impacts is important to ensure ongoing strategy and policy improvements so as to more effectively and efficiently address societal issues.
Policy evaluation has gained ground in LAC countries, but ongoing work is needed to make evaluation frameworks more comprehensive. Several LAC governments have created permanent mechanisms and institutions to evaluate programmes in line with national development objectives (Box 6.8). Generally, countries attach responsibilities for policy monitoring and evaluation to the same agency (e.g. SINERGIA in Colombia, CONEVAL in Mexico and SINE in Costa Rica). In Mexico, impact evaluations have led to the redesign of large social programmes (e.g. the former Progresa) to ensure a more significant impact on the well-being of beneficiaries. Although policy evaluation is commonly used in the LAC region, further progress can be made in using a wider range of well-being outcomes when deciding on the variables for impact evaluations. A shared well-being framework can help to focus evaluation activities on a set of societal outcomes that are relevant across government, encouraging a more holistic assessment of how interventions contribute to the variety of aspects that shape societal well-being. As mentioned above, this stands in contrast with more siloed approaches in which economic statistics are mostly used to assess economic policies, social statistics for social policies, and environmental statistics for environmental ones (see earlier section on “The value of a multidimensional approach to public policy”).
Some OECD countries have established dedicated institutes to bring together academic expertise and knowledge on “what works” as input into ongoing policy development. For example, in the United Kingdom, the What Works Centre for Well-being has been established as an agency dedicated explicitly to synthesising evidence on ways to improve different well-being outcomes. Rather than focusing on a particular sector, the Centre aims to inform policy development across the system of government. Funded through research grants and contributions from government departments, the Centre also organises learning events and publishes regular newsletters to encourage policy makers to incorporate the evidence into their work (Box 6.8).
Box 6.8. Using policy evaluation to accelerate progress towards societal objectives
Policy evaluation by SINERGIA in Colombia
The National System for the Evaluation of Management and Results (SINERGIA, by its Spanish acronym)1 conducts four types of policy evaluation: 1) process evaluations, examining the operation and processes of public interventions; 2) institutional evaluations, to determine the institutional strengths and weaknesses that may facilitate or hinder policy implementation; 3) outcomes evaluation, assessing to what extent targeted societal outcomes are being met; and 4) impact evaluation, quantifying the effects attributable to public interventions and assessing the causality between interventions and outcomes (SINERGIA, 2020[79]). For example, SINERGIA recently evaluated the impact of the Conditional Cash Transfer programme Familias en Acción on poverty, education and health outcomes. It concluded that the programme increased the probability of children moving from fifth to sixth grade of school in major cities (i.e. from primary to secondary school level) by 5%, and that it led to a 2% reduction in both the probability of child labour among children and teenagers and the probability of pregnancy among teenage women (Arteaga and Pecha, 2020[80]).
The UK What Works Centre for Well-being
In the United Kingdom, the What Works Centre for Well-being aims to develop and share evidence that governments, businesses and civil society can use to improve well-being across the country. The Centre provides advice across government agencies on the drivers and measurement of well-being outcomes as well as on how to integrate well-being evidence into public policy. It forms part of a network of seven UK What Works Centres that address different policy issues or geographic regions. These centres help ensure that, high quality, independently assessed evidence shapes decision-making at every level by:
collating existing evidence on the effectiveness of policy programmes and practices
producing high-quality synthesis reports and systematic reviews in areas where they do not currently exist
encouraging policy makers to use these findings to inform their decisions by sharing findings in an accessible way, including through regular newsletters, courses and learning events.
Note:
1. SINERGIA is run by the Public Policy Monitoring and Evaluation Directorate (DESEPP, by its Spanish acronym) of the National Planning Department.
Source: https://whatworkswellbeing.org
Improving the statistical infrastructure is essential for LAC countries to strengthen multidimensional monitoring and evaluation. The LAC region has made significant progress in advancing the “beyond GDP” measurement agenda, particularly in the context of the SDG framework. Nonetheless, ongoing work is needed to ensure sufficient indicator coverage, the granularity of data, timeliness and international comparability to improve the monitoring of societal progress and to be able to broaden the focus on policy evaluation. Chapters 2 to 4 of this report have described the statistical development that is needed to better measure dimensions of both current and future well-being. Chapter 5 has summarised the statistical issues that need to be addressed to better assess inequalities of opportunity by gender, age, ethnicity and race, geographic distribution and education level. In addition, stronger mechanisms are needed to make sure that the insights gained through monitoring and evaluation are acted on as part of the policy development process.
Multidimensional measurement frameworks to support renewed international partnerships
Regional and international development partnerships and an open, rule-based multilateral system are essential to support development in the LAC region. The COVID-19 pandemic, with its devastating impact on every country in the region, has raised the urgency for internationally co-ordinated responses that not only “build forward better” but also “build forward together”. Domestic policies have shown their limits, and multilateral co-operation has become an imperative to overcome shared challenges. New forms of co-operation are needed that better respond to the interconnectedness of countries’ outcomes and their increasing aspirations for a greener and fairer world. Policy discussions and mutual learning could benefit from a shared vision of the future of the LAC region and of the key challenges and opportunities to achieving it, supported by a set of measures that could be used to monitor progress and to benchmark countries’ performance. A shared, holistic vision – that considers outcomes across dimensions (social, environmental and economic), groups, and time scales (short- and long-term) – can play an important role in helping to identify opportunities for partnerships across LAC countries and with other world regions. While the 2030 Agenda provides a global blueprint of policy commitments based on a broad understanding of development that is multidimensional and universal, many regional organisations or country groupings (ranging from the European Union to the BRICS (RIS, 2016[81]) and the APEC) have complemented it with visions and objectives tailored to their specific circumstances as a basis for regional dialogue and co-operation.
Multidimensional frameworks can help address the limitations of using GDP and GNI as the basis for development objectives and co-operation. Although income is recognised as being extremely volatile and often misleading, nowadays country classifications that are used to determine eligibility for Official Development Assistance (ODA) and for specific instruments therein rely on aggregate income. This includes the International Development Association (IDA), whose thresholds determine the operational availability of concessional finance from the World Bank and guide decision-making on access to concessional finance for a number of other multilateral financial institutions, such as the Asian Development Fund, the African Development Bank, the Asian Development Bank and the IMF. The income criterion is also part of the criteria for Identification and Graduation of Least Developed Countries (LDCs). Yet, there is now widespread agreement that development is much broader than increases in per capita national income per se. Development is a multifaceted process with the ultimate goal of improving the well-being of citizens, now and for future generations. The pace and pattern of economic growth can play an important role in driving other dimensions of development, but certain key well-being outcomes are loosely or even negatively related to aggregate incomes. As a result, transitions in income groups can be at odds with progress on a number of relevant development indicators (OECD, 2017[82]). Development challenges exist on a continuum and do not disappear after countries achieve a level of GNI per capita above the threshold for determining eligibility to ODA of IDA. On the contrary, the structural challenges faced by newly upgraded countries can be compounded by the sudden loss of financial aid after graduating from ODA eligibility or other concessional finance.
The Development in Transition (DiT) framework (ECLAC, 2021[83]; OECD et al., 2019[2]) has advocated the need for broader frameworks and measures to inform international co-operation. The Development in Transition (DiT) approach looks at international co-operation as a facilitator for development, based on three main pillars: 1) redefining governance based on inclusiveness; 2) strengthening institutional capacities by aligning domestic and international priorities; and 3) broadening the tools of engagement to include knowledge sharing, multilateral policy dialogues, capacity building, and co-operation on science, technology and innovation (OECD et al., 2019[2]). A shared multidimensional measurement framework can support a broader approach to international partnerships beyond financial co-operation. It can help underpin renewed international partnerships that can support countries’ access to knowledge and technology and can provide a platform for sharing experiences and lessons learnt across countries. It can also mobilise international finance to address key well-being issues that affect current and future generations that extend beyond issues of poverty. Multidimensional frameworks also help draw more attention to transboundary effects, providing countries with further insights into the cross-border impacts of their national and local policies. As such, a multidimensional approach can support partnerships that better align national, regional and international efforts by identifying key interlinkages between countries’ development strategies and international well-being goals.
Multilateral institutions are increasingly deploying multidimensional frameworks that cover a variety of development outcomes and recognise the different pathways countries can follow to achieve them. For instance, the European Council has noted the importance of international co-operation with middle-income countries and stressed that “measures of development should look beyond GDP per capita and consider other dimensions, including inequalities within countries and climate change” (Council of the European Union, 2021[84]). Individual countries have also taken steps in this direction. For example, Uruguay has built its international co-operation policy on the concept of DIT and on an understanding of the multifaceted nature of development challenges (see Box 6.9). As countries rebuild after the pandemic, incorporating multidimensional perspectives into engagements and discussions with international partners can be an important first step to help establish shared priorities to be monitored across the region.
Box 6.9. Uruguay's International Co-operation Policy for Sustainable Development by 2030
The Uruguayan government has defined its strategic priorities for developing an international co-operation strategy aligned with the Sustainable Development Goals and the 2030 Agenda. In 2020, the Uruguayan Agency for International Co-operation1 (AUCI, by its Spanish acronym) started the process to develop the 2021-2024 United Nations Strategic Co-operation Framework (MECNUD, by its Spanish acronym), promoted by the United Nations System and co-ordinated by AUCI. The starting point of this process was an exchange meeting convened by the President of the Republic with the participation of 15 representatives of member agencies of the United Nations System to inform them about public policy guidelines to shape international co-operation. More than 300 representatives of national and international organisations participated, including in four general workshops, two specific workshops and numerous interviews with government representatives. Within this framework, the Uruguayan government defined its strategic priorities around the following axes:
1. An economy that innovates, generates employment and guarantees the sustainability of development: fostering innovation and sustainable production, and developing a strategy for the creation of employment and a private sector committed to social development;
2. An efficient, transparent and accountable state with presence across all the territory: fostering decentralisation and local development, and a state that guarantees citizen coexistence and eradicates violence;
3. Public policies that ensure quality education, social protection and health for all: promoting the transformation of education, social and territorial cohesion and health care;
4. A society that leaves no one behind: empowering vulnerable social groups, including women, deprived and economically vulnerable people, children and youth.
Note:
1. AUCI is responsible for co-ordinating the non-refundable international co-operation for development that Uruguay provides and receives. It was created in 2010 within the Presidency of the Republic. One of its mains goals is to prioritise and negotiate the international co-operation that Uruguay receives and align it with the country’s development priorities.
Conclusion
Taking a multidimensional perspective can support LAC countries in addressing the highly interconnected societal challenges they face, which have been further aggravated by the COVID-19 crisis. Multidimensional frameworks can strengthen the effectiveness and efficiency of government efforts and expenditure to raise societal well-being by: firmly focusing government action on the well-being outcomes of greatest need; fostering a more coherent, whole-of-government approach to achieving societal objectives that maximises possible synergies and actively anticipates and manages trade-offs between government actions to raise well-being; and encouraging more anticipatory governance that systematically considers well-being outcomes and inequalities today as well as resources for tomorrow. Anchoring government action in a broadly shared societal vision of what makes for a good and meaningful life can also lay the foundation for strengthening the social contract between governments and citizens and can play a pivotal role in generating public support for required structural reforms. Lastly, multidimensional frameworks can help inform and strengthen international co-operation, in line with a Development in Transition approach. The value that a multidimensional approach can offer is particularly relevant in the wake of the COVID-19 pandemic, whose impacts are putting further pressure on societal well-being as well as on the available government budgets to address them.
Governments in LAC countries have already taken important steps in adopting a “beyond GDP” approach to public policy. LAC countries have a long history of applying multidimensional measurement approaches, particularly in relation to poverty. The use of multidimensional indices, such as the Multidimensional Poverty Index and the Human Development Index, has fostered more comprehensive and evidence-based approaches to public policy. Most countries have also made significant progress in collecting new data that provide more insights into societal well-being. Similarly, the LAC region’s commitment to international well-being frameworks, such as the 2030 SDG agenda, and the development of localised well-being frameworks signal a move towards stronger multidimensional perspectives. The uptake of the 2030 Agenda and the region’s strong tradition of national development planning have contributed to promoting longer-term and more co-ordinated whole-of-government approaches to policy making. Several countries have established plans in a participatory way and with a long-term focus to help drive more sustainable development.
Participative approaches to developing multidimensional frameworks and establishing societal priorities can help strengthen the social contract between governments and citizens. Wide public engagement in the development and periodic review of multidimensional well-being frameworks is essential to ensure the legitimacy and public support for such frameworks to guide government decision-making and to mobilise collective action towards the identified societal goals. In doing so, reaching out to those who are less able to, used to or willing to “get involved” is fundamental to make well-being frameworks and national development strategies more responsive to excluded groups like informal workers, women, indigenous populations, racial-ethnic minorities and youth (OECD, 2020[87]). Participative approaches to developing multidimensional frameworks offer important value for both governments and citizens: they enable governments to learn more about the perspectives, issues and concerns of the citizens, particularly those who are most vulnerable. At the same time, they allow citizens to gain deeper understandings of the complex interplay between social, economic and environmental issues, as well as the short- and long-term objectives of governments. In this way, participative approaches can strengthen democratic functioning by giving citizens a more direct role in public agenda-setting and decision-making. Establishing broad societal support for a framework can also help guard the continuation of multidimensional approaches against the impacts of political changes.
While national development plans are increasingly taking a multidimensional view, economic goals remain largely dominant, partly because of information gaps on non-economic goals. Analysis of LAC national development plans has shown that there is a limited focus on the wider forms of capital that are needed to sustain well-being over time, going beyond economic capital. Even where comprehensive data does not yet exist, well-being frameworks can help inform more balanced agenda-setting as part of the development planning process by outlining the core components of societal well-being – and their interrelationships – that need to be considered. In addition, strengthening the statistical infrastructure can help further inform the agenda-setting process by providing better data on the range of outcomes that shape societal well-being. In turn, this can help to increase the transparency of the agenda-setting process, foster public dialogue about the right priorities to select and strengthen government accountability on societal progress. Improving the measurement of multidimensional outcomes will also strengthen the monitoring of societal progress and help broaden the evaluation of the impact of government interventions. Specific areas for statistical improvement have been detailed in Chapters 2 to 5.
In addition, stronger links are required between, on the one hand, the multidimensional objectives set out in legal frameworks and national development plans, and, on the other hand, their actual implementation, including through budget allocation and policy development. Currently, even though several national development plans are enshrined in law, their role is often limited to setting a vision for the country, without sufficient mechanisms to enforce adherence to the plan’s guidelines during budget allocation, policy development and implementation. Good intentions embodied in constitutional arrangements and legal frameworks often do not match the actual operation of governments. This includes the connection between development plans and government budget allocation, which needs to be strengthened to arrive at more balanced spending across well-being priorities (OECD et al., 2019[2]). Using societal well-being priorities – that have broad public support – as the basis for government spending is key both to enable the highest well-being return on investment and to strengthen public accountability. Similarly, using a core set of well-being objectives in the ex ante assessment of policy proposals right across government can help underpin a more coherent, whole-of-government approach to improving societal well-being. Building on existing good practices and strengthening the links between “objectives” and “implementation” can make the difference between a national development plan that remains a high-level vision versus one that is grounded in broadly shared societal objectives and so can become a powerful lever in mobilising collective action to improve lives.
In the context of the COVID pandemic, a well-being approach to policy can guide the process of building forward better by helping governments reprioritise, redesign, realign, and reconnect in a number of ways. It can give clarity on goals, priorities, and measures of success: articulating what building forward better means in practice. It helps to identify both pre-existing and new or accumulated vulnerabilities to target support more effectively. It addresses topics that are sometimes less visible in policy, but which matter a lot for people’s quality of life and which have been significantly negatively impacted in the pandemic such as social connections, mental health and subjective well-being. It builds resilience in systems, including not just in economic and natural systems, but also social systems (such as institutions and trust). It also establishes collaborative networks across government departments and agencies focused on shared outcomes, these are needed to deliver on multidimensional integrated agendas such as will be required to implement inclusive and sustainable recovery plans.
Finally, multidimensional measurement frameworks have the potential to guide decision-making at the regional and international level as well as at the national (and sub-national) level. The COVID-19 crisis has provided an urgent reminder that the key challenges facing governments today are not confined within national borders (just as with climate change, or migration for example). To build forward better, countries need to build forward together as much as possible. Agreeing on a shared set of priorities to be monitored using common indicators across the region (which is a political as much as a technical process) would help LAC countries to identify common challenges as well as relative areas of strength or weakness. This, in turn, would support evolution towards a broader and more flexible range of international partnership modalities (beyond financial aid alone) that are better adapted to the needs of countries in an era of Development in Transition.
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Annex 6.A. Multidimensional Poverty Indices in LAC countries
Multidimensional poverty indices provide information on experienced deprivations across a range of well-being outcomes, at both aggregate levels and for specific subgroups of interest (e.g. based on gender, age, geographic location, indigenous descent or disability status) (Annex Table 6.A.1). In LAC countries, these indices are increasingly being incorporated within the policy cycle to help to inform the design of policies aimed at reducing poverty, to distribute public budgets, to target social programmes and to monitor and evaluate the outcomes of poverty-reduction programmes. Currently, Uruguay is in the process of developing a national multidimensional poverty index.
Annex Table 6.A.1. National Multidimensional Poverty Indices in LAC countries
Notes: Official measures generally imply that the measure is recognised by the country’s national statistics office as one of the country's priority indicators, leading to periodic updates of the data used to compute them. Non-official measures, conversely, have generally been one-off, non-periodic efforts to collect data and calculate a measure, with more limited use and recognition. In the Disaggregation column, the disaggregation by gender generally allows comparing data according to the gender of the head of the household. (a) The previous version of the MPI-Chile, which now contains four dimensions, covered the years 2009, 2011, 2013, 2015 and 2017; the current version, which contains five dimensions, covers 2015 and 2017. (b) Chile is divided into 16 administrative regions, which in turn are subdivided into 56 provinces. (c) The disaggregation level into "regions" refers to the six planning regions of Costa Rica (socio-economic or functional regions). (d) Panama is administratively divided into provinces, these, in turn, into districts, and these, into townships. Panama’s IPM-C, calculated using 2010 census data, allows disaggregation at the district and township levels (“distritos” and “corregimientos”, respectively). (e) CONEVAL designed the methodology for Mexico's multidimensional poverty measure. It combines income poverty and deprivations in six basic social rights, summing up seven dimensions in total. (f) Data were collected through the IPM Questionnaire between November and December 2015. The index’s development was carried out during 2016, but it was not officially published until 2017. (g) The urban/rural disaggregation is available only for some of the dimensions (housing and basic services, and access to the Internet).
1. There is also a calculation of the multidimensional poverty index with data from the 2005 Census, carried out by DNP–SPSCV.
2. After the implementation of a national MPI in Panama, data revealed that 48% of people living in conditions of multidimensional poverty were under age 18 (MPPN, 2019[88]). Therefore, the Panamanian government decided to implement a Children’s IPM to complement the national MPI. The IPM-NNA includes dimensions adapted to the measurement of different vulnerabilities suffered by children and adolescents, such as protection and recreation (López-Calva, 2019[89]; MEF, MDS, and INEC, 2018[90]).
Source: Adapted from Montoya and Nieto-Parra (2021) based MPPN (2020[91]); Mexico (CONEVAL, 2010[92]); Colombia (Angulo, Díaz and Pardo, 2013[93]); Chile (Ministerio de Desarrollo Social, 2015[94]); El Salvador (STPP and MINEC-DIGESTYC, 2015[95]); Costa Rica (INEC, 2015[96]); Ecuador (Castillo Añazco and Jácome Pérez, 2017[97]); Honduras (SCGG and INE, 2016[98]); the Dominican Republic (SIUBEN, 2017[99]); Panamá (MEF, MDS and INEC, 2017[100]); Paraguay (INE, 2021[101]); and Guatemala (MDS and OPHI, 2018[102])
Annex 6.B. Heat maps methodology
The heat maps included in the Figures 6.2 and 6.3 were created by analysing the national development plans of 15 LAC countries using the statistical software R. The national development plans analysed include those of Argentina (2015-2019), Bolivia (2016-2020), Brazil (2016-2019), Chile (2018-2022), Colombia (2018-2022), Costa Rica (2019-2022), the Dominican Republic (2010-2030), Ecuador (2017-2021), El Salvador (2014-2019), Guatemala (2032), Honduras (2018-2022), Mexico (2019-2024), Panama (2015-2019), Paraguay (2030) and Peru (2021).
Two separate analyses were run to create two heat maps referring to the 11 current well-being dimensions and the 4 future well-being dimensions. For each analysis, the texts of the national development plans were coded according to the dimensions in the OECD Well-Being Framework. “Coding” refers to the process of capturing words or group of words (expressions) of interest from the text and putting them into different categories (dimensions). The coding was done using Spanish or Portuguese words or expressions, non-case sensitive, for which the English translations are provided in Annex Table 6.B.1 and Annex Table 6.B.2.
In a first step, different categories were created in R, one for each dimension of the OECD current and future well-being framework. The text data from the national development plans was imported and cleaned by removing unnecessary words, punctuation, numbers and extra blank spaces between words. Then, the data were transformed to have one column and multiple rows. Each row is a token, i.e. our unit of analysis. A token may be a word or group of words (an expression) derived from the text. The text data was arranged to have a table of one token per row. Each token created from the cleaned text was matched with one of the dimensions based on the words and group of words (expressions) defined in Annex Table 6.B.1 (current well-being) and Annex Table 6.B.2 (future well-being). In a final step, the number of matched tokens were counted for each dimension and relative frequencies for each country were computed. The sum of the frequency of all the tokens of a country's national development plan, distributed across all dimensions, is 100. In the heat maps, different shades of the same colour were used to illustrate the intensity (frequency) of each well-being dimension in each national development plan.
Annex Table 6.B.1. Current well-being
Annex Table 6.B.2. Future well-being
Notes
← 1. In recognition of the fact that there are many policy frameworks that incorporate aspects of a “well-being” policy framework without necessarily using the term well-being, particularly in the LAC region, the remainder of this chapter refers to multidimensional outcomes frameworks as well as well-being frameworks. See the section “What is a multidimensional approach to public policy?” for an explanation of the content and scope of such frameworks.
← 2. As described here, more “objective” indicators include employment status, income and educational outcomes. A crucial distinction is that, even when such aspects of people’s lives are self-reported (e.g. in surveys), they relate to objective aspects of living standards (e.g. qualifications obtained; incomes received) that a third party can also observe and measure. By contrast, more subjective measures (e.g. life satisfaction, feelings of safety) are directly concerned with people’s experiences and perceptions – and while they can be validated with reference to objective data, the target construct of such measures is inherently subjective in nature.
← 3. Most LAC countries are upper middle-income, including 9 of the 11 countries that were the focus of the preceding statistical chapters (Argentina, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Paraguay and Peru). The remaining two focal countries, Chile and Uruguay, are high-income countries.
← 4. Multidimensional poverty indices (MPIs) are important policy tools in the LAC region, and they embody many elements of the multidimensional and people-focused approach that is central to well-being. For example, almost all MPIs used by governments in the region consider aspects of housing and utilities, health, education and employment (see Annex Table 6.A.1). The primary function of MPIs is to broaden the definition of who can be considered poor or vulnerable, beyond monetary measures, in order to provide more extensive information for the effective targeting, monitoring and evaluation of poverty reduction and other social programmes. As such, their focus is on identifying current deprivation across different groups and areas. By contrast, well-being approaches describe both the level and the distribution of outcomes across a whole society as well as the resources that sustain these outcomes over time. In this sense, well-being approaches represent an aspirational view of what is important for a good life both today and tomorrow, over and above the absence of deprivation (which is nevertheless recognised as an essential building block). Several elements of current well-being, such as civic voice and engagement, work-life balance, job quality, social connections, environment and subjective well-being, are only rarely included in MPIs. More significantly, resources for future well-being at the societal level are almost entirely excluded from MPIs – for obvious reasons, given their primary purpose.
← 5. GBA+ is an analytical tool developed by the Government of Canada to enable policy makers to examine the potential impacts (both intended and unintended) of a policy, plan, programme or other initiative on diverse groups of people. It considers gender as well as other identity factors such as age, ethnicity, indigenous heritage, geography, socio-economic status, family status and mental or physical disability (Government of Canada, 2021[103]).
← 6. These domains are: Living standards; Education; Health; Ecological diversity and resilience; Community vitality; Time use; Psychological well-being; Good governance; and Cultural diversity and resilience (GNH Centre Bhutan, 2021[67]).
← 7. These domains are: Economy; Health; Education; Culture and society; Government services and governance; and Environment and infrastructure (Government of United Arab Emirates, 2021[68]).
← 8. The need to better link national and sub-national planning and monitoring, especially in the context of the SDGs, was highlighted by participants in the 2019 Bogotá (Colombia) conference on Policy uses of well-being and sustainable development indicators in Latin America and the Caribbean.