Idea in Brief

Since World War II, gross national product and its replacement, gross domestic product, have been the chief measures of national success. Now, though, governments and nonprofit groups are working to devise alternative metrics for evaluating progress.

GDP is under siege for three main reasons. One is that, even on its own terms, it is flawed: It misses lots of economic activity (unpaid household work, for example) and, as a single-number representation of vast, complex systems, is inevitably skewed. Another is that it fails to factor in economic and environmental sustainability. Finally, existing, readily available measures—educational achievement, life expectancy, and so on—may reflect well-being far better than economic output does.

Money isn’t everything. But for measuring national success, it has long been pretty much the only thing (other than, of course, sports). The specific metric that has prevailed since World War II is the dollar value of a country’s economic output, expressed first as gross national product, later as gross domestic product. This is an improvement over ranking by military victories—the most time-honored gauge. And the era of GNP and GDP has been characterized by a huge global rise in living standards and in wealth.

A version of this article appeared in the January–February 2012 issue of Harvard Business Review.