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How to use wellbeing frameworks to design better policy

12 July 2023

News and media


Image of Public leadership masterclass faculty, Arthur Grimes

Wellbeing is increasingly becoming a focus of government policies across the world. Aotearoa New Zealand adopted a Wellbeing Budget in 2018 and new Australian federal Treasurer Jim Chalmers will release Australia’s first national ‘wellbeing framework’ within weeks.

To fully unlock the potential for a wellbeing focus to make improvements to policies, public sector leaders need to understand different ways of measuring wellbeing and the importance of attaching targets and accountabilities to wellbeing measures.

ANZSOG’s 2023 Public Leadership Masterclass series includes a masterclass on Designing policies to enhance wellbeing presented by Professor Arthur Grimes, Professor of Wellbeing and Public Policy in the School of Government at Victoria University of Wellington (Te Herenga Waka).

Professor Grimes says that the rise in governments looking to use wellbeing approaches came from a broader concern that economic growth alone would not be sufficient to achieve some broader social goals.

“Of course, governments have always looked at people’s welfare, and have been involved in providing people’s health, education and retirement pensions for most of the 20th century. And while increasing income (GDP essentially) helps to improve many aspects of welfare, it does not guarantee that all important aspects of welfare will keep improving.

“A wellbeing focus is a way of getting officials, policymakers and the public to think about which aspects of welfare are important and which won’t be improved just by increasing people’s incomes.”

Building capabilities versus lifting subjective wellbeing

Professor Grimes says that there are two broad frameworks that can be used to think about wellbeing, both of which would be covered in the masterclass.

The first draws on the work of economist Amartya Sen and is based around capabilities – looking at the different things that people need to be able to lead a ‘life that they value’ such as good education, health and a range of human rights (i.e., freedoms).

“This framework focuses on identifying and providing the specific capabilities that individuals need to live a good life. The capabilities on which policymakers may focus will likely vary from country to country reflecting their stage of economic development. Sen considers that once you have the capabilities in place you don’t need to worry too much about how people use those capabilities to improve their own wellbeing,“ Professor Grimes said.

“The second approach, in part reflecting views of utilitarian philosophers, is based on the idea that we should be maximising happiness in the world and minimising pain. It’s an old philosophical idea but since the 1950s and 60s many social scientists who study wellbeing have jumped on this as a guiding light. These sociologists, psychologists and economists have said that this is really what should guide governments, to make people have the happiest lives they could have,” he said.

“We can measure subjective wellbeing pretty well now. One common way is by asking people to rate their overall satisfaction with their life (or “happiness”) from 0-10. If this question is asked at the start of a survey, it is a measure that is unlikely to be gamed in the way that some other targets can be.”

“We can then make use of similar techniques that we use in Cost Benefit Analysis, but look not just at how we improve monetary benefits but what are cost effective ways to improve people’s overall subjective wellbeing.”

He said that this approach could deliver different results to a focus on narrow economic or other objective targets or capabilities. For example, closing post offices in rural areas may make sense from a purely economic standpoint, but this neglects the wellbeing benefits of daily visits to the post office for geographically isolated people.

“In the UK, researchers have looked at alternative treatments for people who have depression which is associated strongly with low life satisfaction. The research focuses on which treatments are most effective at changing people’s happiness with their own lives rather than on an economic measure such as lifting their employment. The findings show that cognitive behavioural therapy is much more effective pound-for-pound than anything else at lifting people’s overall life satisfaction,” he said.

While there has been a focus on Aoteoroa New Zealand and its Wellbeing Budget, Professor Grimes said that there were a range of countries – including Australia – that had introduced explicit wellbeing frameworks in an effort to improve policymaking.

“Wellbeing approaches are being used around the world, and actually began in Australia in 2004 through the federal Treasury’s Wellbeing Framework, which was explicit that we should judge policies by how much they improve people’s subjective wellbeing.”

The vital importance of targets and accountabilities

Professor Grimes said many countries’ efforts had been built around a capabilities framework but none of these had so far proved effective in assisting prioritisation within budgeting processes.

“Wellbeing measures will not work without clear targets and accountabilities,” he said.

“In New Zealand at the moment we have something like 60 different wellbeing measures, but we don’t have targets except for one around reducing child poverty – which has been effectively used to guide policy.

“The previous government had clear targets for the public service which had accountability across agencies. They were all wellbeing targets (though they did not use that name): getting family violence down, reducing rheumatic fever rates, etc. and they really focused the minds of agencies and got them collaborating. They got them to change policies quite dramatically.

He said that wellbeing targets needed to be based on evidence – such as that collected by the network of UK government’s ‘What Works?’ centres that focus on what improved people’s wellbeing rather than just how much was spent.

“If you use the ‘What Works?’ approach it may be that private sector or NGO interventions are in many cases more effective than public sector interventions. You may also find that existing public sector interventions are ineffective and so should be culled. If you marry wellbeing with an evidence-based approach you won’t necessarily end up with a bigger government, but you will have a more effective one.”

Building wellbeing into the daily work of the public service

Professor Grimes said that participants in the masterclass would learn to understand the two frameworks for wellbeing – capabilities and subjective wellbeing – as well as how to apply wellbeing thinking to their work.

Even if they did not have the power to impose targets or measures themselves, public servants could still incorporate wellbeing thinking into how they worked and use it as a tool to examine how effectively their agency was performing.

“Think about what sort of things does your department do that affect people’s lives, and which of those things are most likely to affect people’s subjective wellbeing. Then think about what is cost effective – if I was in the health area, I’d be thinking about whether I should be putting resources into mental health, or hip replacements, or something else in terms of how those interventions affect people’s overall quality of life.”

“If there is one thing that is key for making a wellbeing approach work it is to adopt meaningful wellbeing targets and accountabilities.”

“You need to be very clear about what you are doing, why you are doing it, how you are measuring progress, and who is accountable for it.”

“The three issues that governments and public servants need to avoid are a lack of targets, a lack of accountability and spending without evidence.”


ANZSOG’s 2023 Public Leadership Masterclass series (PLM), will re-energise and educate hard-working and passionate emerging and current leaders and expose them to fresh ideas. The thirteen masterclasses cover a range of themes and provide an invaluable opportunity for self-reflection and professional growth for you and your team. PLM is a ‘choose-your-own adventure’ style series which puts you in control of your online learning experience. Choose from various packages which feature masterclasses led by leading domestic and international thinkers on leadership and public management from the public, non-profit and private sectors.