Italy's 2017 Economic and Financial Document for the first time includes BES indicators (BES - Benessere Equo e Sostenibile = Equitable and Sustainable Well-being)
Rome, April 11, 2017 – Through its 2017 Economic and Financial Document (DEF – Documento di economia e finanza), Italy is the first country in the European Union and the Group of Seven to include equitable and sustainable wellbeing indicators besides GDP in its economic planning. The following four indicators i) average disposable income, ii) inequality indicator, iii) labour force participation rate, iv) emissions of CO2 and other global warming gases, as well as the past and future trends measured by these indicators which are particularly significant for the quality of life of citizens and society as a whole, have been tentatively introduced in the Economic and Financial Document currently being considered by the Cabinet.
By and large, well-being benefits from an increase in GDP, but does not necessarily coincide with it. The quality and sustainability of our environment, economic inequalities, the quality of our work, health and the education level of the population are some of the dimensions that contribute to societal wellbeing. As experts from various disciplines (especially well known is the work done by the Stiglitz-Sen-Fitoussi Committee) and a number of international organisations (United Nations, OECD and European Commission) have pointed out, it is time for economic policy to give up an approach to policy-making that is based only on GDP and to make commitments to improve more specific areas of the quality of life of citizens.
With a view to responding to this need, in 2016 Parliament by a large majority approved the inclusion of equitable and sustainable well-being indicators in economic policymaking. Under Law 163 of 2016 the government will monitor the trends of the past three years, as measured by the relevant equitable and sustainable indicators, and will forecast trends over the next three-year period at unchanged policies as well as in the light of the policy decisions made. The law provides that equitable and sustainable well-being indicators will be introduced in the budget cycle once they have been selected by the Committee for equitable and sustainable indicators (Comitato per gli indicatori del benessere equo e sostenibile – Italian Version) and after hearings in the relevant parliamentary committees have been held. While waiting for the final selection to be made, the Government, through the 2017 Economic and Financial Document, has decided to tentatively introduce a first group of indicators in the budget cycle: average disposable income, an inequality index, the labour force participation rate and emissions of CO2 and other global warming gases. By introducing the reform provisions earlier than planned, each of the four indicators included in 2017 Economic and Financial Document will show trends as measured by the four indicators in the past three-year period and forecast future trends in an unchanged-policy scenario as well as in a scenario assuming a set of policy decisions.
In order to give this exercise greater visibility, the authors chose to include it in the first section of the Economic and Financial Document, rather than setting it out in an annex, as envisaged by the law.