Measuring Welfare beyond Economics
The Genuine Progress of Hong Kong and Singapore
To Be Published November 30th 2013 by Routledge – 256 pages
Developed in the 1930s, the Gross Domestic Product (GDP) was never meant to be an indicator of the level of welfare of a population, but its emphasis by politicians and news outlets has made it become one of the most popular indicators of “development”. Increasingly scholars have criticized the emphasis on the GDP, and put forward other indicators, amongst which is the Genuine Progress Indicator (GPI), an aggregate index of over 20 economic, social and environmental indicators, which are added or subtracted depending on whether they are considered as contributing to, or subtracting from, people’s welfare or well-being.
The most interesting and useful research related to the GPI consists in its comparison to the GDP. This is the first book to calculate the GPI of Hong Kong and Singapore from 1968 to 2011. The book explores how in most other countries the GDP has increased faster than the GPI, with the GPI stabilizing during the 1970s or 1980s because the social and environmental costs of development associated with rapid economic growth slowed down “genuine progress”, as measured by the GPI. This has been explained with the “threshold hypothesis”, which states that once a certain level of development of a country is reached, the GPI no longer increases, even if the economy (as measured by the GDP) grows. Yet in Hong Kong and Singapore the GPI only stabilized in 1998. The book examines this in light of the deindustrialization of Hong Kong and Singapore, the Asian Economic Crisis, and the continued investment in infrastructure. The book also discusses the policy implications of a slowdown of the GPI, in terms of promoting a “steady state economy” where economic growth is no longer the goal of government policies.
Part 1: Introduction 1. The Concept of Sustainability 2. The Concept of Welfare and Wealth, Income and Capital 3. Environmental, Social, and Economic Problems 4. The Idea behind the GDP and its Flaw as Indicator of Well-Being Part 2: The Development of GDP and Failure to Account for Externalities 6. The Development of GDP and Beyond - a Brief History 7. The Methodology of GDP 8. Failure to Account for Externalities Part 3: Alternatives to GDP 9. Efforts to address the Problems of GDP 10. Replacing GDP 11. Adjusting GDP Part 4: GPI as the Alternative Indicator of Welfare 12. The Need for an Adjustment in GDP 13. Economic Growth and Human Welfare 14. The Idea behind GPI 15. The Variables involved in the Calculation of GPI Part 5: Case studies of GPI of Other Countries 16. European countries 17. China 18. Australia 19. Japan 20. Thailand 21. The Threshold Hypothesis 22. Benefits and Challenges of GPI as the Measure of Welfare Part 6: The GPI of Hong Kong 23. Economic Development and Progress of Hong Kong 24. The Variables for Hong Kong 25. Results of Hong Kong's GPI 26. Implications 27. The GPI of Singapore 28. Economic Development and Progress of Singapore 29. The Variables for Singapore 30. Results of Singapore's GPI 31. Implications 32. Comparison of Hong Kong and Singapore, Implications and Conclusions
Dr Claudio O. Delang is Research Assistant Professor at the Department of Geography of Hong Kong Baptist University.