Advances in Measuring Sustainable Development
INTRODUCTION The World Development Indicators (World Bank, 2001) has highlighted since 1999 the ‘genuine’ rate of saving for over 100 countries around the globe. As a more inclusive measure of net saving effort, one that includes depletion and degradation of the environment, depreciation of produced assets and investments in human capital, genuine saving provides a useful indicator of sustainable development – the basic theoretical underpinnings of saving and sustainability were presented in Chapter 2. In the real world these theoretical results imply the common-sense notion that sustained negative rates of genuine saving must lead, eventually, to declining welfare. An important point in all of this, of course, is that it is per capita welfare that must be sustained. Genuine saving measures the change in total assets rather than the change in assets per capita. While genuine saving is answering an important question, therefore – did total wealth rise or fall over the accounting period? – it does not speak directly to the question of the sustainability of economies when there is a growing population.1 If genuine saving is negative then it is clear in both total and per capita terms that wealth is declining. For a range of countries, however, it is possible that genuine saving in total could be positive while wealth per capita is declining. The practical difﬁculty in dealing with these questions is that there are no widely available statistics on total wealth. Many (but not all) OECD countries publish national balance sheet accounts, which measure the total value...
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