The Genuine Progress Indicator’s development and applications – a systematic literature review from 1995 to 2023

Abstract

The Genuine Progress Indicator (GPI) is a composite economic indicator designed in 1995 to consider the trade-offs between the costs and benefits of economic activity, seeking to provide a more comprehensive view of macroeconomic wellbeing than is revealed by market activity measured by the Gross Domestic Product (GDP). The measure was developed as a response to the lack of consideration of societal and environmental dimensions in the economic development debate and includes monetary adjustments that reflect effects of economic activity to economic welfare. The study applies the PSALSAR systematic literature review methodology to extract the main themes and discussions related to the GPI, including its methods and policy applications, based on the period 1995 to 2023. The analysis of 43 reviewed publications suggest that the GPI has evolved substantially during the period examined, gaining more solid theoretical foundations, yet there are diverging opinions in the literature on its purpose, methodology, and extent to which it can inform sustainable development. Most of the studies were conducted in developed countries with the purpose of comparing GPI and GDP and highlighting the welfare implications of its different components. Various calls for GPI methodological alignment enabling comparability between studies remain largely unanswered, as the GPI 2.0 methodology has not gained traction. Varying accounting approaches used to compute GPI sub-indicators confirm a persistent lack of convention in valuation methods. The findings suggest ongoing development of the GPI since 1995 but scant evidence of its policy implementation. The lack of a shared vision for the future of the GPI among its practitioners appears to be one of the main obstacles to its further harmonisation and application.