The problem of the effectiveness of Gross Domestic Product (GDP) as the indicator for the country’s socio-economic progress is widely discussed today. The cause for the discussions is the fact that being considered as the socio-economic indicator, GDP concentrates on measuring material factors, productivity, and wealth which are not enough for discussing the standard of living in the country.
The socio-economic progress and standard of living as the components of the societal well-being are closely connected with such factors as health, education, personal activities including social life and job, environment problems, social interactions, and economic security.
To present the complete picture of the socio-economic situation in the country which is considered as the population’s well-being, it is also necessary to measure these aspects. GDP cannot be thought of as the acceptable measure because it does not include the not-paid sector. In this situation Net Domestic Product and Net National Income are more effective for presenting the real vision of the country’s progress.
Today the public can be rather critical while analyzing the statistical data reported by the governments on the question of the economic situation in countries and the population’s well-being. GDP can be considered as an effective measurement when it is used for assessing the material aspect of the population’s state including income, wealth, and consumption.
Thus, it is an efficient indicator for measuring the productivity of the country as the cause for increasing the material well-being of the population. That is why when the information from the statistical reports is presented as the data which are related to the notion of the population’s well-being in general it should be perceived as the reflection of the situation predominantly in the economic sector with references to the material well-being of the public.
The gap between the statistical data reported by the government and the perceptions of the public of this material is a result of the lack of information about those aspects which can be measured with the help of GDP. Paying attention to the data presented, the public can compare the data on well-being as the general notion with the real situation in society.
Thus, the data will reflect only the economic aspect without including such positions as the health quality, social interactions, education, and the state of environment. Moreover, the commentary on GDP data can also be opposite to the real situation associated with the real standard of life. That is why the combination of such factors as the lack of the public’s knowledge, the incorrect usage of the indicator, and possible commentaries provided by the government can decrease the public’s trust to the data presented officially.
The government is always responsible for the situation in the state with focusing on all the sectors. It is necessary to provide the governmental control in order to achieve their development. Nevertheless, not all the changes and tendencies in the economic sector can be a result of the governmental regulations. Today more and more governments are inclined to decrease the level of regulations directed toward the development of private business sector.
The reason for such actions is the fact that its private character can guarantee the more frequent progress of the whole economic development of the country depending on the principles of competitiveness which is the driver for the progress in the contemporary economics. That is why it is possible to say that the government can solve the development problems when giving more rights to the private business sector for its progress.