Improving the Quality of Life through Smart

R ecent years have seen an unprecedented number of official efforts to improve, develop, and implement new measures of the quality of life and economic performance. Much of the groundwork for these efforts was laid in two important National Research Council reports. Nature's Numbers, published in 1999, considered how to expand the national income accounts that track the country's economic activity to properly take into account the environment and natural resources. Beyond the Market, published in 2005, proposed ways to integrate nonmarket activity into the accounts. This work has implications for economic policy. Carefully designed regulations can promote economic growth and improve the Nation's quality of life. Water pollution, for example, can cause illness and destroy the livelihood of fishermen and others who rely on a healthy ecosystem to earn a living. Pollution, as Robert Kennedy noted, does not subtract from the gross domestic product. Appropriately balanced efforts to restrict harmful pollution can improve economic performance along with the health and safety of Americans. The theme of this chapter is that, properly measured, both economic growth and the Nation's well-being can be increased by smart regulation, innovation and public investment in such fields as medical research, clean domestic energy and transportation infrastructure.