The Kingdom of Bhutan (as it's formally called) is well known for its guarded lifestyle. Its population is generally cut off from the rest of the outside world. Television was first introduced to the nation -- located high in the Himalayas between India and China -- in 1999, and the Internet arrived there a couple of years later. Bhutanese leaders worked hard to keep the rest of the world from encroaching upon and supplanting the idyllic and pious Buddhist lifestyle that the Bhutanese maintain. In other words, the Bhutanese like the way they live, but they're also aware that globalization is an unstoppable force in the 21st century.
Rather than submit to the conspicuous consumption that characterizes much of the developed world, Bhutanese leaders chose to join the global economy on their own terms by measuring how the facets of its economy affect the positive outlook of its residents. Beginning in November 2008, all the economic factors used to measure gross domestic product are analyzed for their impact on Bhutan's residents' happiness. The factors of production are still there -- unemployment, agriculture, retail sales -- but GNH represents a paradigm shift in what's most valued by Bhutanese society compared to the rest of the world. In short, happiness matters, not money. The ultimate goal is economic support for the four pillars of Bhutanese society: economic self-reliance, preservation and promotion of Bhutanese culture, good governance and a pristine environment [source: Mustafa].
To calculate the effect a certain economic sector has on GNH, Bhutan's economic activity is measured by nine distinct criteria, or dimensions. These dimensions include concepts like time use, environmental diversity and psychological well-being [source: Centre for Bhutanese Studies]. Time use, for example, takes into account the amount of time a particular sector's workers are able to spend with their families or in leisure activities. Psychological well-being includes the prevalence of both positive and negative emotions. These criteria can change the value of certain goods. For example, a tract of forest that would have more value as timber for sale in a consumption-based economy would have more value left intact under Bhutan's use of GNH.
By employing gross national happiness as its leading economic indicator, Bhutan's public policy will inevitably follow suit. A sector filled with unhappy and stressed employees who cut down trees for a living could receive less government funding than a sector that promotes adequate time off for daily prayers and is engaged in preservation.
If decades of scientific research are to be believed, the Bhutanese may be onto something.