Nature's role in sustaining economic development

Partha Dasgupta

Research output: Contribution to journalArticlepeer-review

Abstract

In this paper, I formalize the idea of sustainable development in terms of intergenerational wellbeing. I then sketch an argument that has recently been put forward formally to demonstrate that intergenerational well-being increases over time if and only if a comprehensive measure of wealth per capita increases. The measure of wealth includes not only manufactured capital, knowledge and human capital (education and health), but also natural capital (e.g. ecosystems). I show that a country's comprehensive wealth per capita can decline even while gross domestic product (GDP) per capita increases and the UN Human Development Index records an improvement. I then use some rough and ready data from the world's poorest countries and regions to show that during the period 1970-2000 wealth per capita declined in South Asia and sub-Saharan Africa, even though the Human Development Index (HDI) showed an improvement everywhere and GDP per capita increased in all places (except in sub-Saharan Africa, where there was a slight decline). I conclude that, as none of the development indicators currently in use is able to reveal whether development has been, or is expected to be, sustainable, national statistical offices and international organizations should now routinely estimate the (comprehensive) wealth of nations. © 2010 The Royal Society.
Original languageEnglish
Pages (from-to)5-11
Number of pages6
JournalPhilosophical Transactions of the Royal Society B: Biological Sciences
Volume365
Issue number1537
DOIs
Publication statusPublished - 12 Jan 2010

Keywords

  • Comprehensive wealth
  • Human capital
  • Natural capital
  • Population growth
  • Property rights
  • Shadow prices

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