Beyond GDP: What Bhutan Can Teach Us About Measuring What Truly Matters

By Raquel Loga

In a world captivated by growth metrics and economic forecasts, a small Himalayan kingdom has been quietly rewriting the rules of what it means to prosper. Bhutan, through its Gross National Happiness (GNH) framework, challenges the conventional wisdom that GDP is the ultimate barometer of national success. It proposes instead a broader, more human vision of development, one in which well-being is not a byproduct of policy, but its purpose.

As part of the IE Center for Health & Well-Being's Happiness Week 2025, the event "The Bhutan Case" invited the IE community to engage with this alternative model. Held on March 19th, it featured Borja Santos Porras, Vice Dean of the IE School of Politics, Economics and Global Affairs (SPEGA), and Lisa Bevill, Director of the Center for Health & Well-being, in a conversation that explored how Bhutan’s framework offers practical insights for public policy, education, and institutional design.

To deepen the conversation, we spoke with Angie Figueroa-Alcorta, Executive Director for Partnerships at IE SPEGA, who recently visited Bhutan. Her trip included meetings with key figures such as Tashi Pem, Chair of the Royal Civil Service Commission, and Tshewang Dorji, Secretary of Education and Skills Development. Alongside Borja Santos Porras, their reflections help trace how Bhutan’s philosophy of governance might inform broader global discussions.

Where well-being becomes infrastructure

In Bhutan, happiness is not an abstract aspiration, it is structured, measured, and institutionalized. Figueroa-Alcorta describes a system where the GNH framework is embedded in the operational fabric of government. At the Royal Civil Service Commission, for example, public officials are not only evaluated on performance, but also on their contributions to social and emotional well-being. This integration extends to the education system. Schools implement a values-based curriculum focused on mindfulness, compassion, and civic responsibility. Environmental policy is likewise infused with long-term thinking: the country’s constitution mandates a minimum of 60% forest cover to be maintained in perpetuity.

These policies, according to Figueroa-Alcorta, are underpinned by a coherent vision: "to cultivate a society that is not only economically resilient, but also emotionally and socially grounded."

Expanding the definition of progress

From the policy side, Borja Santos Porras underscores how GNH reframes the very idea of development. He explains that the definition of development is inherently subjective, but that this subjectivity has concrete consequences. "If you define development through economic growth," he notes, "then your policy outputs will naturally aim to increase GDP, employment, and salaries." However, if development is conceived through a multidimensional lens, then the nature of policy itself changes.

Under a multidimensional approach, public policies begin to address diverse human needs: access to education, healthcare, freedom, and a safe environment. Santos emphasizes that this redefinition leads to different outputs, not just higher income, but greater equity and quality of life. He adds that when inequality or environmental sustainability are explicitly integrated, policy outcomes shift even further, encompassing carbon emissions, environmental protections, and redistributive justice. 

Notably, Santos calls attention to the psychological dimension of inequality. "It’s not enough to give minimum access to services. People will always compare themselves to the societal average," he explains. Therefore, policy should not just aim to meet minimum standards, but to ensure that citizens have the resources and capabilities to live dignified, fulfilling lives.

He also notes that when well-being itself becomes a target, the indicators shift to include elements rarely considered in traditional policy frameworks, such as spiritual fulfillment, quality of rest, and mental health. Bhutan’s GNH screening tool exemplifies this shift: policies must demonstrate alignment with these broader values before they are adopted.

In this light, Bhutan’s budgeting process becomes more than a financial tool, it becomes an ethical framework for national development. This fundamentally alters not only what governments measure, but what they aim to achieve.

Santos points out that by using GNH, Bhutan positions development as a complex, interdependent process, not a linear race for economic output. It is a mindset shift that, if adopted elsewhere, could radically reorient public policy.

When the numbers don’t add up

Bhutan’s critique of GDP finds a powerful echo in the work of systems theorist Riane Eisler, who has long argued that traditional economic metrics ignore the very forces that hold societies together. As Eisler points out, GDP increases with tobacco sales, oil spills, and arms manufacturing, yet the unpaid labor of caregivers or the value of clean air are invisible in its calculus.

Eisler’s concept of a "caring economy" proposes a new lens: one that values nurturing, education, and social cohesion. Like GNH, it advocates for a deeper accounting of what really contributes to societal health.

Her framework invites us to redefine success in terms of care and sustainability, rather than consumption. Bhutan, in this sense, is not merely an outlier but a working case study in shifting the developmental paradigm.

Institutionalizing well-being

The success of Bhutan’s model lies in its ability to transform ideals into institutions. The GNH screening tool, for example, systematically evaluates new policies against a set of well-being indicators. This institutional filter ensures that governmental decisions are consistent with national values.

Higher education has embraced this vision too. At Royal Thimphu College, GNH principles shape not only academic curricula but also campus life, encouraging a culture of balance and reflection.

Figueroa-Alcorta emphasizes that these are not symbolic gestures: "They represent a strategic choice to place long-term human development at the heart of national strategy."

The role of universities

Both Figueroa-Alcorta and Santos point to academia as a key driver in evolving how societies define and measure success. Santos argues that universities can help construct and validate alternative frameworks, equipping future leaders with the tools to pursue more holistic and inclusive forms of progress.

The Sustainable Development Goals (SDGs), while imperfect, offer a global step in that direction. Yet local, culturally embedded approaches, like Bhutan’s, demonstrate how institutions can translate abstract goals into grounded action.

IE University is uniquely positioned to serve as a laboratory for innovative development paradigms, where academic research, pedagogy, and interdisciplinary exchange converge to interrogate and reimagine the foundations of societal progress. By fostering dialogue that bridges theory and practice, the institution can cultivate a generation of minds equipped not only to critique prevailing economic models, but to design and implement alternatives grounded in equity, sustainability, and human flourishing.

Reimagining the horizon

As the conversation around Gross National Happiness continues to grow, Bhutan stands as a reminder that societies can choose their metrics, and, by extension, their priorities. It suggests that policy is not just a tool for managing resources, but a medium for shaping meaning.

In an era of planetary instability and social fragmentation, GNH offers a daring proposition: that the true measure of a nation lies not only in its output, but also in its care. As Eisler puts it, the essence of progress is not what we produce, but what we protect.

Perhaps the most radical idea of all is also the most intuitive: that to thrive as a society, we must first remember what makes life worth living.