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Application and use of the ISEW for assessing the sustainability of a regional system: A case study in Italy

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  • Pulselli, Federico M.
  • Bravi, Mirko
  • Tiezzi, Enzo

Abstract

The Index of Sustainable Economic Welfare (ISEW) was introduced by Daly and Cobb in 1989 in order to integrate the information embodied in GDP. Since economic growth implies externalities and market failures, and a portion of it can be defined as “uneconomic”, the ISEW method introduces some corrections and adjustments to the GDP calculation framework. The ISEW has been calculated for a number of nations but it has been rarely applied to sub-national systems. Its calculation at the local level is important especially in case of administrative decentralization, and autonomy and responsibility of local authorities in certain fields. For this reason, a more and more comprehensive knowledge of the characteristics and peculiarities of the territorial system they manage is necessary. This paper presents the results of the ISEW calculation for Tuscany, a region in central Italy, in the period 1971–2006. This is one of the few attempts to apply the ISEW in time series at the regional level. Final results show that a discrepancy between ISEW and GDP appeared in the 1970s. Social and environmental pressures increased during the period under study making the gap equal to about 30 percent of regional GDP in 2006. The ISEW can be used also as a tool for evaluating policies, but further adjustments in calculation of certain items are considered necessary for taking into account and evaluating punctual policies. A case of energy policy is presented.

Suggested Citation

  • Pulselli, Federico M. & Bravi, Mirko & Tiezzi, Enzo, 2012. "Application and use of the ISEW for assessing the sustainability of a regional system: A case study in Italy," Journal of Economic Behavior & Organization, Elsevier, vol. 81(3), pages 766-778.
    • Handle: RePEc:eee:jeborg:v:81:y:2012:i:3:p:766-778
    DOI: 10.1016/j.jebo.2010.12.021
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    2. Menegaki, Angeliki N. & Marques, António Cardoso & Fuinhas, José Alberto, 2017. "Redefining the energy-growth nexus with an index for sustainable economic welfare in Europe," Energy, Elsevier, vol. 141(C), pages 1254-1268.
    3. Csaba Kandracs & Renato Ritter, 2024. "Sustainability Indicators - the Boundaries and Alternatives of GDP," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 23(2), pages 31-55.
    4. Luhua Wu & Shijie Wang & Xiaoyong Bai & Guangjie Luo & Jinfeng Wang & Fei Chen & Chaojun Li & Chen Ran & Sirui Zhang, 2022. "Accelerating the Improvement of Human Well-Being in China through Economic Growth and Policy Adjustment," IJERPH, MDPI, vol. 19(19), pages 1-20, October.
    5. Korobitsyn, B. A., 2015. "Methodological approaches to accounting the depletion of natural resources, changes in the environmental and human capital in the gross regional product," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 1(3), pages 495-504.
    6. Armiento, Mirko, 2018. "The Sustainable Welfare Index: Towards a Threshold Effect for Italy," Ecological Economics, Elsevier, vol. 152(C), pages 296-309.
    7. Talberth, John & Weisdorf, Michael, 2017. "Genuine Progress Indicator 2.0: Pilot Accounts for the US, Maryland, and City of Baltimore 2012–2014," Ecological Economics, Elsevier, vol. 142(C), pages 1-11.
    8. Daniel Francisco Pais & Tiago Lopes Afonso & Ant nio Cardoso Marques & Jos A Fuinhas, 2019. "Are Economic Growth and Sustainable Development Converging? Evidence from the Comparable Genuine Progress Indicator for Organisation for Economic Co-operation and Development Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 202-213.
    9. Bleys, Brent & Whitby, Alistair, 2015. "Barriers and opportunities for alternative measures of economic welfare," Ecological Economics, Elsevier, vol. 117(C), pages 162-172.
    10. Menegaki, Angeliki N. & Tugcu, Can Tansel, 2017. "Energy consumption and Sustainable Economic Welfare in G7 countries; A comparison with the conventional nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 892-901.
    11. Long, Xianling & Ji, Xi, 2019. "Economic Growth Quality, Environmental Sustainability, and Social Welfare in China - Provincial Assessment Based on Genuine Progress Indicator (GPI)," Ecological Economics, Elsevier, vol. 159(C), pages 157-176.
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    13. Brent Bleys, 2013. "The Regional Index of Sustainable Economic Welfare for Flanders, Belgium," Sustainability, MDPI, vol. 5(2), pages 1-28, February.
    14. Angeliki Menegaki, 2018. "The Basic, the Solid, the Site-Specific and the Full or Total Index of Sustainable Economic Welfare (ISEW) for Turkey," Economies, MDPI, vol. 6(2), pages 1-18, April.

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    More about this item

    Keywords

    GDP; Economic growth; Welfare; Social and environmental pressures; Defensive expenditures; Tuscany;
    All these keywords.

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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