FFU-Report 02-2012: The National Welfare Index as a Contribution to the Debate on a More Sustainable Economy

Zieschank, Roland / Diefenbacher, Hans— 2012

The task of reaching a more sustainable kind of economic process is narrowly related with a double problem: up to date most societies have pursued an explicit strategy of economic growth, although its successes are now disappearing and, at a closer look, its negative ecological and social side effects appear to be even growing. The first part of this article contrasts the ambiguity of the growth concept with a concept of social welfare, which aims at a more qualitative kind of growth, considering the available natural and social capital as well. It will become clear that even GDP as a traditional and politically crucial indicator for the success or failure of a country’s economic development necessarily gives ambiguous signals if one looks at this parameter of the national accounts by the light of a sustainable development. More recent calculations of the national welfare index for Germany (NWI) result in some interesting discussion lines: the aggregated progress of 19 variables shows an significant difference in its development: between 2000 and 2007, the NWI tends to fall in comparison with GDP/GNI (gross national income). This discrepancy is to be seen as evidence of the fact that there might be an increasing economic growth even without any improvement in welfare. Quite on the contrary, in the years 2008 – 2009 the NWI does not seem to follow the drastic collapse of GDP/GNI at the same pace. This article aims at providing an overview both of the social context in which NWI was created as a complementary reporting system integrating GDP/GNI and of its construction principles as well as of some results. From all this, some conclusions will be drawn about how the index can be helpful in the development of a more sustainable concept of welfare. For example, it will become understandable that improvements in welfare can be achieved even without economic growth. This process could go hand in hand with reflections on economic transformation and cultural change. It is all about future strategies allowing a reduction in the physical material and energy flux as well as in the negative impacts on ecosystems and nature due to economic activities, so that societies will profit from such change.

TitleFFU-Report 02-2012: The National Welfare Index as a Contribution to the Debate on a More Sustainable Economy
AuthorZieschank, Roland / Diefenbacher, Hans
Appeared InFFU-Report 02-2012, Forschungszentrum für Umweltpolitik, FU Berlin, 28 pages
Size or Duration28 pages