Sunday, November 28, 2010

Another mandate? Another gadget?

I recently blogged re the reports of the Cameron government's interest in compiling data on the happiness of Brits. This week's Economist asks "Should governments pursue happiness rather than economic growth?"

But are they any good at either one?

I have never been convinced that the "happiness" or the "nudge" research were good ideas. Happiness will always be hard to define and a moving target. Even the non bi-polars have their mood swings. And when I picture the cast of characters that are busy trying to improve our lives, whether in Washington or Sacramento or Los Angeles (my case), I do not want them nudging me. In fact, I want them to not even entertain the thought.

But Bruno Frey and Alois Stutzer claim to square the circle here. Their wrap-up is copied below:
Happiness research and public choice can both benefit from taking each other’s key insights into account. Improvements in the measurement of individual welfare allow us to confront
public choice hypotheses in a new way with empirical evidence. This has been illustrated for basic assumptions on the partisan model of political business cycles, theories of government size and rents in the public bureaucracy.

The huge progress in the measurement of individual welfare makes it tempting to pursue the old dream of maximizing aggregate happiness as a social welfare function. Improvements in individual welfare are claimed to be directly measurable, and politics is seen as following advice and implementing it with suitable interventions in the political process.

Based on public choice analysis, we argue that the appropriate approach is not to maximize aggregate happiness directly by seeking to improve outcomes through direct interventions. Rather, we see the role of happiness research as seeking to improve the nature of the political processes. Individuals should have more opportunity of advancing what constitutes their idea of the good life, both individually and collectively. They should bemade aware that different issues require different measures and indicators of well-being. Happiness research should remain open to constructing a number of different indicators, reflecting well-being according to different aspects of life. Plurality is a necessary consequence of the procedural view outlined. This is in stark contrast to the maximization approach requiring one single objective. From a constitutional standpoint, we conclude that people are best served with comparative institutional analyses on subjective well-being.
I'm not sure I buy it. For better or worse, I walk around with mental images of the cast of characters. Do we want them to have yet another mandate and yet another research gadget?