[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/b/zbw/wupspe/42.html
   My bibliography  Save this book

Towards sustainable development: Alternatives to GDP for measuring progress

Editor

Listed:
  • Schepelmann, Philipp
  • Goossens, Yanne
  • Makipaa, Arttu
Abstract
Economic performance of a country is generally being measured through GDP (Gross Domestic Product), a variable that has also become the de facto universal metric for standards of living. However, GDP does not properly account for social and environmental costs and benefits. It is also difficult to achieve sustainable decision-making aiming at sustainable progress and well-being if welfare is being considered from a purely financial point of view. The study highlights the benefits and some of the shortcomings of GDP. It serves as a helpful and practicable instrument for monetary and fiscal policies. The real problem presumably is that GDP growth is too often confused with (sustainable) welfare growth in people's minds. While there certainly is a correlation between the two, this study shows that this is a highly conditional correlation, void of substantial causality for GDP levels observable in the European Union. In order to be able to assess people's well-being and general sustainable development in the sense of sustainability, an alternative instrument going beyond GDP is necessary. Using so called SWOT analyses, several alternative progress indicators have been assessed in the context of this study. On the one hand it was analysed how far ecological and social factors can be integrated in the GDP measurements. Thereby difficulties arose then trying to monetise these factors. As a further possibility indicators were analysed which are to replace GDP as a whole. The category supplementing GDP seems to be the most realistic and acceptable option for going beyond GDP. Within this approach, GDP is being complemented with additional environmental and/or social information. In order to make this kind of solution feasible the study claims the establishment of an overarching and transparent indicator system for improving economic decision-making in support of sustainable development.

Suggested Citation

  • Schepelmann, Philipp & Goossens, Yanne & Makipaa, Arttu (ed.), 2009. "Towards sustainable development: Alternatives to GDP for measuring progress," Wuppertal Spezial, Wuppertal Institute for Climate, Environment and Energy, volume 42, number 42.
    • Handle: RePEc:zbw:wupspe:42
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/59282/1/716262037.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michela Nardo & Michaela Saisana & Andrea Saltelli & Stefano Tarantola & Anders Hoffman & Enrico Giovannini, 2005. "Handbook on Constructing Composite Indicators: Methodology and User Guide," OECD Statistics Working Papers 2005/3, OECD Publishing.
    2. Kenneth Stewart, 1974. "National income accounting and economic welfare: the concepts of GNP and MEW," Review, Federal Reserve Bank of St. Louis, vol. 56(Apr), pages 18-24.
    3. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    4. Roland Spant, 2003. "Why Net Domestic Product Should Replace Gross Domestic Product as a Measure of Economic Growth," International Productivity Monitor, Centre for the Study of Living Standards, vol. 7, pages 39-43, Fall.
    5. Max-Neef, Manfred, 1995. "Economic growth and quality of life: a threshold hypothesis," Ecological Economics, Elsevier, vol. 15(2), pages 115-118, November.
    6. Amartya Sen, 1976. "Real National Income," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(1), pages 19-39.
    7. מחקר - ביטוח לאומי, 2006. "Summary for 2005," Working Papers 29, National Insurance Institute of Israel.
    8. Veenhoven, Ruut, 2007. "Measures of Gross National Happiness," MPRA Paper 11280, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeroen C.J.M. van den Bergh, 2007. "Abolishing GDP," Tinbergen Institute Discussion Papers 07-019/3, Tinbergen Institute.
    2. Andrew Aitken & Martin Weale, 2020. "A Democratic Measure of Household Income Growth: Theory and Application to the United Kingdom," Economica, London School of Economics and Political Science, vol. 87(347), pages 589-610, July.
    3. Jeroen C.J.M. van den Bergh, 2015. "Green Agrowth as a Third Option: Removing the GDP-Growth Constraint on Human Progress. WWWforEurope Policy Paper No. 19," WIFO Studies, WIFO, number 50915.
    4. V. K. Shrotryia & Shashank Vikram Pratap Singh, 2020. "Measuring Progress Beyond GDP: A Theoretical Perspective," Emerging Economy Studies, International Management Institute, vol. 6(2), pages 143-165, November.
    5. Ana Cárcaba & Eduardo González & Juan Ventura & Rubén Arrondo, 2017. "How Does Good Governance Relate to Quality of Life?," Sustainability, MDPI, vol. 9(4), pages 1-16, April.
    6. Ana Cárcaba & Eduardo González & Juan Ventura, 2017. "Social Progress in Spanish Municipalities (2001–2011)," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 12(4), pages 997-1019, December.
    7. Enrico Ivaldi & Guido Bonatti & Riccardo Soliani, 2016. "The Construction of a Synthetic Index Comparing Multidimensional Well-Being in the European Union," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(2), pages 397-430, January.
    8. Philip Lawn, 2007. "A Stock-Take of Green National Accounting Initiatives," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 80(2), pages 427-460, January.
    9. L. Fasolo & M. Galetto & E. Turina, 2013. "A pragmatic approach to evaluate alternative indicators to GDP," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 633-657, February.
    10. Eduardo González & Ana Cárcaba & Juan Ventura, 2018. "Weight Constrained DEA Measurement of the Quality of Life in Spanish Municipalities in 2011," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(3), pages 1157-1182, April.
    11. Dasgupta, Partha, 2010. "The Place of Nature in Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4977-5046, Elsevier.
    12. Sardar Islam & Matthew Clarke, 2002. "The Relationship between Economic Development and Social Welfare: A New Adjusted GDP Measure of Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 201-229, February.
    13. Jeroen C.J.M. van den Bergh & Miklós Antal, 2014. "Evaluating Alternatives to GDP as Measures of Social Welfare and Progress. WWWforEurope Working Paper No. 56," WIFO Studies, WIFO, number 47188.
    14. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    15. Nicholas Oulton, 2022. "The Productivity-Welfare Linkage: A Decomposition," Discussion Papers 2205, Centre for Macroeconomics (CFM).
    16. Productivity Commission, 2006. "Review of Price Regulation of Airports Services," Inquiry Reports, Productivity Commission, Government of Australia, number 40.
    17. Jonathan Temple, 2002. "The Assessment: The New Economy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 18(3), pages 241-264.
    18. MacCarty, Nordica A. & Bryden, Kenneth Mark, 2016. "An integrated systems model for energy services in rural developing communities," Energy, Elsevier, vol. 113(C), pages 536-557.
    19. Andrea Saltelli, 2007. "Composite Indicators between Analysis and Advocacy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(1), pages 65-77, March.
    20. Oded Stark & Wiktor Budzinski, 2021. "A social‐psychological reconstruction of Amartya Sen’s measures of inequality and social welfare," Kyklos, Wiley Blackwell, vol. 74(4), pages 552-566, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:wupspe:42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/wikuede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.