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Measuring the Wealth of Nations

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  • Partha Dasgupta

    (Frank Ramsey Professor Emeritus of Economics, University of Cambridge, Cambridge CB3 9DD, United Kingdom, and Fellow, St. John's College, Cambridge CB2 1TP, United Kingdom)

Abstract

In this article, I review—and to an extent further develop—a normative theory that offers a unified language for both sustainability and policy analyses. The theory shows that by economic growth we should mean growth in wealth, which is the social worth of an economy’s entire stock of capital assets, not growth in GDP or improvements in the many ad hoc indicators of human development that have been proposed in recent years. Concurrently, the theory shows that by poverty we should mean a low level of wealth, not income, and that the distribution of well-being ought to be judged in terms of the distribution of wealth, not income or education or the many indicators that are currently in use. I show that the concept of wealth invites us to extend the notion of assets and the idea of investment well beyond conventional usage. This perspective has radical implications for the way that national accounts are prepared and interpreted. I then sketch a recent publication that has put the theory to work by studying the composition of wealth accumulation in contemporary India.

Suggested Citation

  • Partha Dasgupta, 2014. "Measuring the Wealth of Nations," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 17-31, October.
    • Handle: RePEc:anr:reseco:v:6:y:2014:p:17-31
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-resource-100913-012358
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    Citations

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    Cited by:

    1. Collins, Ross D. & Selin, Noelle E. & de Weck, Olivier L. & Clark, William C., 2017. "Using inclusive wealth for policy evaluation: Application to electricity infrastructure planning in oil-exporting countries," Ecological Economics, Elsevier, vol. 133(C), pages 23-34.
    2. Daniele Schilirò, 2019. "Sustainability, Innovation, and Efficiency: A Key Relationship," Palgrave Studies in Impact Finance, in: Magdalena Ziolo & Bruno S. Sergi (ed.), Financing Sustainable Development, chapter 0, pages 83-102, Palgrave Macmillan.
    3. Shunsuke Managi & Shuning Chen & Pushpam Kumar & Partha Dasgupta, 2024. "Sustainable matrix beyond GDP: investment for inclusive growth," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    4. Yamaguchi, Rintaro, 2020. "Available capital, utilized capital, and shadow prices in inclusive wealth accounting," Ecological Economics, Elsevier, vol. 169(C).
    5. McLaughlin, Eoin & Ducoing, Cristián & Hanley, Nick, 2024. "Challenges of wealth-based sustainability metrics: A critical appraisal," Accountancy, Economics, and Finance Working Papers 2024-05, Heriot-Watt University, Department of Accountancy, Economics, and Finance.
    6. Roman, Philippe & Thiry, Géraldine, 2016. "The inclusive wealth index. A critical appraisal," Ecological Economics, Elsevier, vol. 124(C), pages 185-192.
    7. Fan, Jing-Li & Li, Kai & Zhang, Xian & Hu, Jiawei & Hubacek, Klaus & Da, Yabin & Liang, Xi & Cheng, Danyang, 2022. "Measuring sustainability: Development and application of the Inclusive Wealth Index in China," Ecological Economics, Elsevier, vol. 195(C).
    8. van Krevel, Charan, 2021. "Does natural capital depletion hamper sustainable development? Panel data evidence," Resources Policy, Elsevier, vol. 72(C).

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