The document discusses Italy's process of including Equitable and Sustainable Well-Being (ESW) indicators into its economic and budgetary planning. It analyzes how 12 ESW indicators across domains like health, education, and environment have been selected and are beginning to be used to forecast outcomes and evaluate policies. Challenges remain in developing methodologies to provide high-quality forecasts and assessments of specific policies' impacts on ESW indicators. Ongoing stakeholder engagement is also needed to maintain the effectiveness of using well-being metrics in policymaking.

1. EQUITABLE AND SUSTAINABLE
WELL-BEING INDICATORS INTHE
ITALIAN PUBLIC FINANCE
PROCESS: LESSONS LEARNED AND
NEXT STEPS FORWARD
CHIARA ASSUNTA RICCI
MINISTRY OF ECONOMY AND FINANCE, ITALY
International Conference on the Policy Uses of Well-being and Sustainable
Development Indicators in Latin America and the Caribbean
Universidad del Rosario, Bogotá
23th October 2019

2. AIMS
1. To analyze the process that has led to include Equitable and Sustainable
Well-Being (ESW) indicators into the economic and budgetary planning in
Italy
2. To examine how the selected metrics are being used to shape policy,
considering the methodological and political challenges Italy is addressing
2ESW Indicators in the Italian public finance process

3. OUTLINE
 Policy use of well-being metrics
 Measuring well-being in Italy
 The Italian case: moving theory to practice
 Indicators’ selection and description
 Forecasts and evaluations: current state and future research
 Possible next steps forward
 Conclusions
3ESW Indicators in the Italian public finance process

4. POLICY USE OF WELL-BEING METRICS
4
Agenda setting
Policy
formulation
(ex ante)
Implementation
and monitoring
Evaluation
(ex post)
 Well-being indicators can play a different role at different stages of the
policy process
ESW Indicators in the Italian public finance process

5. THE ITALIAN CASE: THE MEASUREMENT FRAMEWORK
5
 Equitable and Sustainable Well-Being (ESW) by Istat (Italian National Institute
of Statistics) and National Council for Economics and Labor (CNEL)
 Framework defined by a committee of experts and civil society (2010):
12 domains and 129 indicators
 Annual report on ESW in Italy published by Istat since 2013
1. Health 7. Security
2. Education and training 8. Subjective wellbeing
3. Work and life balance 9. Landscape and cultural heritage
4. Economic wellbeing 10. Environment
5. Social relations 11. Innovation,research and creativity
6. Politics and institutions 12. Quality of services
ESW Indicators in the Italian public finance process

6. THE ITALIAN CASE: 2016 BUDGET REFORM LAW
 The reform of the budget law (2016) provides that ESW indicators have to
be integrated into the economic and financial planning cycle:
 April: ESW Annex to the Economic and Financial Document
o evolution of ESW indicators over the previous 3 years
o forecasts of ESW indicators over the next 3 year period
(unchanged legislation/policy scenario)
 February: Report on ESW indicators
o updated forecasts in light of the budget law
6ESW Indicators in the Italian public finance process

7. THE ITALIAN CASE: INDICATORS’ SELECTION
7
• limited number of indicators to facilitate
their adoption in the public debateParsimony
• timeliness and availability of long-and
high-frequency time-series
Statistical
availability
• compatibility with the available analytical
tools
Analytical
feasibility
• reaction to policy in a short time
scenario
Sensivity to policy
change
ESW Indicators in the Italian public finance process

8. THE ITALIAN CASE: INDICATORS’ SELECTION
8
The 12 ESW indicators by domain
ESW domain ESW indicator
Economic wellbeing
1. Per capita adjusted disposable income
2. Disposable income inequality
3. People living in absolute poverty
Health
4. Healthy life expectancy at birth
5. Excess (overweight & obese) weight
Education and training 6. Early leaver from education and training
Work and life balance
7. Non-participation rate
8. Ratio of employment rate for women 25-49 years with children under
compulsory school age to the employment rate of women 25-49 years
without children
Security 9. Predatory crime (burglary rate, pick-pocketing rate, robbery rate)*
Politics and institutions 10. Civil justice efficiency (length of civil proceedings)
Enviroment
11. Emissions of CO2 and other greenhouse gases (tons of CO2 equivalent
per capita)
Landscape and cultural heritage 12. Illegal building rate
*Predatory crime is the only composite indicator
ESW Indicators in the Italian public finance process

9. THE ITALIAN CASE: FORECASTS AND EVALUATIONS
9
2016 2017 2018 2019 2020 2021 2022
Per capita adjusted disposable
income (in thousands of €)
21.8 22.2 22.7 23.1 23.7 24.2 24.7
Disposable income inequality 5.9 6.0 6.0 5.7 5.6 5.6 5.6
Non-participation rate (%) 21.6 20.5 19.7 19.9 19.9 19.7 19.5
Emissions of CO2 and other
greenhouse gases (tons of CO2
equivalent per capita)
7.2 7.2 7.1 7.1 7.0 6.9 6.9
Source: Report attached to the 3 years horizon planning document (DEF – Documento di Economia e Finanza)– April 2019
 Gradual development of methodologies to provide indicators forecasts
 at present forecasts available for 4 ESW indicators (policy scenario)
 comprehensive evaluations of the impact of specific policies on ESW
indicators
ESW Indicators in the Italian public finance process

10. THE ITALIAN CASE: FORECASTS AND EVALUATIONS
10
 Income support schemes
 Extension of the favorable flat
rate scheme (up to 65,000
euros)
 20% substitute tax regime for
individual entrepreneurs, artist
and professionals with
revenues between 65,000 and
100,000 euros
 Higher income thresholds
(4,000 euros) for non
dependent children (age < 24)
ESW Indicators in the Italian public finance process
5,9
6,0 6,0
5,7
5,6 5,6 5,6
4
5
6
2016 2017 2018 2019 2020 2021 2022
 E.g. – Disposable income inequality (S80/S20)
Source: Report attached to the 3 years horizon planning document (DEF – Documento di Economia e Finanza)– April 2019

11. THE ITALIAN CASE: FORECASTS AND EVALUATIONS
11
Before RdC (2017) After RdC
Incidence on
poverty (families)
Incidence on
poverty
(individuals)
Incidence on
poverty (families)
Incidence on
poverty
(individuals)
North 5.4 7.0 4.8 6.5
Centre 5.1 6.4 4.3 5.6
South and Isles 10.3 11.4 6.6 8.4
Italy 6.9 8.4 5.3 7.0
Source: Report attached to the 3 years horizon planning document (DEF – Documento di Economia e Finanza)– April 2019
 E.g. - Impact assessment of Italy's new 'Citizens' Income' (RdC) scheme on
Absolute Poverty
 simplifying hypotheses in order to identify the potential beneficiaries
from the sample
 results of simulations at national and local level
ESW Indicators in the Italian public finance process

12. THE ITALIAN CASE: FORECASTS AND EVALUATIONS
12
 Gradual development of methodologies to provide indicators forecasts
 high quality data (complete, consistent, accurate and timely)
 new ad hoc models for advanced estimates
 revision and refinement through trial-and-error learning
ESW Indicators in the Italian public finance process

13. Generating
continuous
engagement across
stakeholders to
maintain
effectiveness and on-
going use of well-
being in policy
CHALLENGES
13ESW Indicators in the Italian public finance process

14. Thank you!
chiara.ricci@mef.gov.it