An appraisal of interlinkages between macro-economic indicators of economic well-being and the sustainable development goals

Abstract

Recognising the well-known limitations of economic growth as a litmus test of progress and the call by Target 19 of Sustainable Development Goal (SDG) 17 to “develop measurements on progress on sustainable development that complement gross domestic product”, this paper advances understanding of the linkages between alternative measures of economic well-being, the well-being economy and the SDGs. A conceptual model is presented, linking four capital assets to well-being goals and domains, which are connected to related SDGs. An assessment is conducted on the extent to which Gross Domestic Product and five alternative indicators of economic well-being (Environmentally Adjusted Net Domestic Product, Measure of Economic Welfare, Genuine Savings, Genuine Progress Indicator and Inclusive Wealth Index) align with (a) the dimensions of economic well-being, and (b) various environmental, economic, social and institutional targets set by the SDGs. The Genuine Progress Indicator (GPI) is found to be the most comprehensive in coverage, accounting for market-based welfare, services from essential capital, and various environmental and social costs, and linking directly to targets in fourteen of the seventeen SDGs. The paper discusses how greater use of alternative measures of economic well-being by policymakers can encourage transitions to economies which prioritise well-being and desirability objectives.