Three factors have exerted great influence on the course of Bhutan’s development. The first being continuous culture. As Bhutan was never conquered or colonized, the country developed a culture relatively fee from outside influence, the institution of monarchy, and deep sense of nationhood. The second factor is the environment, which is protected by mountains, often difficult terrain. Thirdly, Vajrayana Buddhism has given the country a view of the world on which the Third and Forth Kings based their policies of developing Bhutan’s potential in every field. This continuing development of Bhutan has been crystallized in a philosophy crafted by the Fourth King of Bhutan, His Majesty Jigme Singye Wangchuck, known as Gross National Happiness (GNH) in the late 1980s. The concept of GNH defines Bhutan’s development objective as improvement in the happiness and satisfaction of the people rather than growth of Gross National Product (GNP). GNH has been the overarching development philosophy of Bhutan as the concept has guided the country’s development policies and programmes. GNH suggests that happiness is the ultimate objective of development. It recognizes that there are many more dimensions to development than those associated with Gross National Product (GNP), and that development should be understood as a total process that seeks to maximize happiness rather than purely economic growth.

The country believes that for a holistic development of the individual and society, it is essential that development achieves a sustainable balance between the economic, social, emotional, spiritual and cultural needs of the people. This has led to the declared objective of viewing development as a continuous process towards maintaining balance between the material and the intangible needs of individuals and society. The concept reminds the country that the means must always be considered in terms of the end and, therefore, every step in material development and change must be measured and evaluated to ensure that it will lead to happiness, not just more development.