Economics, Trade and Incentive Measures

ID 66905
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Title Nature's role in sustaining economic development
Description In this paper, I formalize the idea of sustainable development in terms of intergenerational wellbeing. 
I then sketch an argument that has recently been put forward formally to demonstrate 
that intergenerational well-being increases over time if and only if a comprehensive measure of 
wealth per capita increases. The measure of wealth includes not only manufactured capital, knowledge 
and human capital (education and health), but also natural capital (e.g. ecosystems). I show 
that a country’s comprehensive wealth per capita can decline even while gross domestic product 
(GDP) per capita increases and the UN Human Development Index records an improvement. 
I then use some rough and ready data from the world’s poorest countries and regions to show that 
during the period 1970–2000 wealth per capita declined in South Asia and sub-Saharan Africa, even 
though the Human Development Index (HDI) showed an improvement everywhere and GDP 
per capita increased in all places (except in sub-Saharan Africa, where there was a slight decline). 
I conclude that, as none of the development indicators currently in use is able to reveal whether 
development has been, or is expected to be, sustainable, national statistical offices and international 
organizations should now routinely estimate the (comprehensive) wealth of nations
Web Link /doc/case-studies/inc/cs-inc-dasgupta-en.pdf
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Authors Partha Dasgupta, Faculty of Economics, University of Cambridge; Sustainable Consumption Institute, University of Manchester