As the world grapples with climate change, biodiversity loss and dwindling natural resources, traditional measures of economic progress, like Gross Domestic Product (GDP) and Gross National Product (GNP), are increasingly being questioned. At the same time, persistent social challenges – from poverty and inequality to corruption, human rights violations, and global health crises – highlight the need for a broader understanding of prosperity and happiness.
In response, alternative indicators have emerged to provide a more comprehensive picture of societal well-being. Measures such as the Human Development Index (HDI), the World Inequality Index, and the Human Freedom Index go beyond financial performance, incorporating social and environmental factors. These frameworks embrace a “triple value” approach, recognising that progress cannot be measured by economic output alone but must also consider social equity and ecological sustainability. As the global landscape shifts, these alternative indicators are gaining traction, shaping policies that aim for a more balanced, inclusive and sustainable future.
In 1972, Bhutan’s former king, Jigme Singye Wangchuck, introduced gross national happiness (GNH) as the guiding philosophy of Bhutan’s development. The former king famously stated that “GNH is more important than Gross National Product (GNP)”, challenging the conventional focus on economic output.
The concept of GNH likely began as a good-humoured play on words, emphasising that economic growth should not come at the expense of societal well-being. Over time, it evolved into a comprehensive framework, prioritising sustainable development, cultural preservation, environmental conservation, and good governance. Today, GNH continues to shape Bhutan’s policies and has inspired global discussions on alternative measures of progress beyond GNP.
When the balance between material and non-material development is recognised, and happiness is taken as an objective, GNH serves as an important yardstick for a framework for societal happiness.
GNH is centred on the pursuit of societal well-being as its ultimate goal. Inspired by the GNH index, International Happiness Day was established in 2012 and is celebrated annually on March 20. The day reminds us that happiness and well-being are universal aspirations and should be key considerations in shaping public policies worldwide.
What is Happiness?
Happiness is a deeply personal and subjective matter. According to neoclassic economists, happiness is defined as the utility maximisation of material consumption and rational decisions. Conversely, the emergence of schools such as behavioural and neuro-economics has broadened the scope of economics into the psychology domain, making the mind science relevant to economics.
Happiness, often used as a synonym for welfare or quality of life, may mean a state of “spirit”. Christianity, for example, characterises happiness through generosity, compassion, mutual respect, and control of excessive appetites. Likewise, for Muslims, the Five Pillars of Islam aim to inculcate a happy morality in which charity, peacefulness, fellow-feeling and the control of selfishness are the highest and most adaptive virtues. In Buddhism, happiness is a state of mind resulting from inner mental causes, not from external material causes. Buddhism considers the path of mental or spiritual development, articulation of the Four Noble Truths, the Three Roots of Evil, and the Eightfold path, which is regarded asthe ultimate state of happiness.
In Western applications, the term “well-being” is more reflective of “happiness,” it often refers to transitory affective mood states that can come and go with external circumstances.
The more common meaning of happiness is a state of pleasure, and it is common to see that the central understanding is happiness demands a compassionate connection with and contribution to the welfare of others.
Can Happiness be Measured?
Traditional economic calculations overlook essential values like clean air, freshwater, forests, human rights, and cultural heritage because they are difficult to quantify and are often treated as “public goods” or “externalities.” Focusing solely on monetary indicators, we fail to distinguish between healthy and unhealthy growth, temporary and sustainable progress, or what is genuinely needed to enhance the quality of life.
As per Ura et al. (2012), the GNP index consists of four pillars, nine domains, and thirty-three indicators. Each indicator is assigned a weight (Table 1).
The GNH index uses two types of thresholds to measure happiness: Sufficiency thresholds and Happiness thresholds. Sufficiency thresholds indicate how much a person needs to enjoy sufficiency in each of the 33 indicators. Meanwhile, the happiness threshold means the percentage of the indicators a person must achieve sufficiency to be understood as happy. Based on the weighted score of the 33 indicators, the population is divided into four subgroups: unhappy, narrowly happy, extensively happy, and deeply happy, with cut-offs of 50, 66, and 77 percent .
As Robert F. Kennedy once said, ‘It measures everything except that which makes life worthwhile’. It is true that what citizens value is beyond GNP and that the way we adopt our measurements will determine our future.
Sri Lanka’s Path to a Happiness-Driven Economy
Economics is traditionally defined as studying human behaviour in managing scarce resources, primarily in material and monetary terms. However, Adam Smith’s Theory of Moral Sentiments (1982) reminds us that markets cannot function without ethics and morality. He emphasised that progress toward a just society requires sympathy and human-heartedness, yet modern economic thinking often equates success with greed and selfishness.
The newly elected Sri Lankan government manifesto “A Thriving Nation, A Beautiful Life” also echoes Adam Smith’s argument that markets must be guided by human values, not just profit and material gain.
The manifesto advocates a more holistic approach to development, emphasising social justice, environmental sustainability, and ethical governance over mere economic expansion.
Accordingly, using the GNH index as a development indicator for Sri Lanka may provide more insights into achieving these goals.
As Sri Lanka navigates economic recovery and social transformation, the global challenge of sustainable, equitable, and just progress is highly relevant. GNH’s four interdependent pillars emphasise the need to reinvent economic, financial and business models, urging Sri Lanka to move beyond short-term policy fixes towards system transformation. This shift requires environmentally responsible policies that are critical for a nation rich in biodiversity and structural economic reforms that promote resilience, inclusivity, and stability.
Sri Lanka can foster a happiness-driven economy by integrating material and spiritual well-being into its policies. Similar to Bhutan, Sri Lanka is rooted in Buddhist values like wisdom, compassion, and governance. Sri Lanka must prioritise social justice, ethical leadership, and sustainability over economic expansion. GDP alone does not define progress—true well-being requires a balance between growth and societal harmony.
Accordingly, in reaching for a thriving nation that gives a beautiful life to its people, Sri Lanka needs a new leadership model embracing GNH principles. By shifting focus from market-driven growth to holistic progress, Sri Lanka can align development with well-being, ethics, and sustainability, ensuring a future where happiness, not just wealth, measures success!
This is an extract from the research study of ‘Dialogues of Happiness with Sustainable Development: A Comprehensive Review on Gross National Happiness and SDGs’ conducted by Vilani Sachitra and Dinushi Wijesinghe.
Dr. Dinushi Wijesinghe
Lecturer, Dundee Business School, Faculty of Design, Informatics and Business, Abertay University, Dundee, United Kingdom.
Professor Vilani Sachithra
Senior Lecturer, Department of Commerce, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Sri Lanka
