Abstract
In this chapter both theory and empirics are used to show that our picture of the processes of economic development changes radically when nature is introduced as a capital asset. Particular features of institutions that fashion societies' use of the natural-resource base are identified and analyzed. It is also shown that conventional measures of human welfare are inadequate for identifying sustainable development. A comprehensive measure of an economy's wealth is developed and shown to be the correct index to use both for assessing the sustainability of economic development and for evaluating policies. © 2010 Elsevier B.V.
| Original language | English |
|---|---|
| Pages (from-to) | 4977-5046 |
| Number of pages | 69 |
| Journal | Handbook of Development Economics |
| Volume | 5 |
| Issue number | C |
| DOIs | |
| Publication status | Published - 2010 |
Keywords
- Climate change
- Common property resources
- Environmental risks
- Externalities
- Global public goods
- Natural capital
- Shadow prices
- Social discount rates
- Sustainable development
- Wealth
