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Gross National Happiness (GNH)


Gross National Happiness (GNH) is a measure of economic and moral progress mainly used by the country of Bhutan. Instead of solely focusing on economic indicators like GDP, it emphasizes the happiness and wellbeing of its citizens. GNH includes a range of factors including sustainable development, preservation of cultural values, conservation of the natural environment and good governance.


Gross National Happiness (GNH): /ɡrōs ˈnaSH(ə)nəl ˈhapēnəs/

Key Takeaways

<ol><li>GNH or Gross National Happiness, initially introduced by Bhutan, is a measure that values the collective happiness in a nation. It is an alternative to GDP which emphasizes more on economic progress.</li><li>GNH includes various developmental aspects apart from economy. It considers factors like environmental conservation, cultural preservation, balanced and equitable socio-economic development, and good governance to evaluate the overall happiness of the people as being crucial for societal progress.</li><li>GNH acts as a tool that ensures the progress and development seen are not only focused on economic growth but also contribute to the overall well-being of citizens. This measure aims to balance materialistic and spiritual development, leading to a more holistic view of prosperity.</li></ol>


Gross National Happiness (GNH) is a crucial business and finance term primarily because it shifts the focus from purely economic growth to a more balanced and sustainable development approach that includes psychological wellbeing, health, education, ecosystem resilience, cultural diversity, good governance, community vitality, and living standards. Originating from Bhutan, it challenges the traditional measure of Gross Domestic Product (GDP) by prioritizing citizen’s happiness and wellbeing as a success indicator. Having this broader view allows for policies and business practices to be developed that takes into account a more holistic measure of societal progress, ultimately leading to more sustainable and inclusive growth.


Gross National Happiness (GNH) is a unique development approach utilized primarily by the Kingdom of Bhutan in South Asia. Rather than prioritizing gross domestic product (GDP) or economic growth alone, GNH ascertains progress by measuring factors that more comprehensively capture the quality of life and overall well-being of the nation’s citizens. The purpose of GNH is to ensure that economic growth and development do not come at the expense of the nation’s cultural integrity, its environment or the happiness and welfare of its citizens.This paradigm emphasizes a balance between the material and non-material aspects of well-being, thus creating a holistic perspective on progress. GNH is employed as a measure to guide public policy, by assessing performance in sectors including sustainable development, preservation of cultural values, conservation of the environment and good governance. Its intent is not to reject economic growth, but to sequester its pace and define its trajectory in consonance with these GNH values. By prioritizing well-rounded social development strategies rather than purely economic indicators, GNH strives to achieve a sustainable and equitable society.


1. Bhutan: The term Gross National Happiness was first coined by the 4th King of Bhutan, King Jigme Singye Wangchuck, in 1972 when he declared, “Gross National Happiness is more important than Gross Domestic Product.” Bhutan has created a GNH Index which is used to measure the happiness and well-being of its population. It involves factors like psychological wellbeing, health, education, time use, cultural diversity and resilience, good governance, and ecological diversity and resilience. The Bhutanese government aims to share GNH across the globe to ensure development sustains the soul of humanity.2. United Arab Emirates: In 2016, the UAE appointed a Minister of State for Happiness to create social good and satisfaction. The role was inspired by GNH and aimed to establish happiness and wellbeing as a lifestyle in the UAE. The Happiness Ministry has launched several initiatives including the happiness and positivity program, which sought to train ‘Chief Happiness and Positivity Officers’ in every government entity.3. Scotland: The Scottish National Party established a National Performance Framework (NPF) in 2007. Although it doesn’t officially use the term “Gross National Happiness,” it shares many of the holistic, wellbeing-centered features. The framework measures Scotland’s performance across a range of indicators, from more traditional economic ones like GDP to ones focused on individual wellbeing, community cohesion, and environmental health.

Frequently Asked Questions(FAQ)

What is Gross National Happiness (GNH)?

Gross National Happiness (GNH) is a term coined by the King of Bhutan, Jigme Singye Wangchuck in 1972, which implies the country’s commitment to building an economy that would serve its culture based on Buddhist spiritual values instead of material development gauged by gross domestic product (GDP).

How is GNH different from GDP?

While GDP is a measure of economic output and market activity, GNH is a measure of a country’s overall well-being, encompassing both material and non-material aspects of life such as cultural, health, and environmental factors.

What are the pillars of GNH?

GNH is based on four pillars: sustainable and equitable socio-economic development, preservation and promotion of culture, conservation of the environment, and good governance.

How is GNH measured?

GNH is measured using a holistic approach, which includes nine domains: psychological well-being, health, education, time use, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards.

Why is GNH important in the field of finance and business?

GNH brings a shift in the way a country’s prosperity is measured. It brings into focus the idea that economic growth is not the sole determinant of happiness and well-being. This perspective can influence everything from corporate practices to fiscal policies and individual investment strategies.

Has any other country adopted the GNH method?

While no other country has fully adopted GNH as a measurement of prosperity, many have started considering factors similar to those in GNH for policy-making and have applied such insights in various aspects.

Does GNH ignore economic growth?

No, GNH does not ignore economic growth, it rather considers it as a part of the more comprehensive picture of national well-being. Besides economic prosperity, it also takes into account environmental, physical and mental health, cultural values, and governance.

What is the purpose of GNH?

The ultimate purpose of GNH is to shape policies and guide development towards nurturing the happiness and contentment of the citizens while ensuring sustainable and equitable socio-economic development.

Related Finance Terms

  • Economic Welfare
  • Sustainable Development
  • Quality of Life Indicators
  • Social Progress Index
  • Well-being Measurements

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