modified GNP

physical quality of life indicator

average life expectancy

rates of infant mortality

literacy levels

human development index

GNP per person

inflation

access to clean water

food sufficiency

energy consumption

political freedom

Various indicators have been proposed over the years as an alternative to GNP. As early as 1972, economists Nordhaus and Tobin recommended modifying GNP by subtracting the cost of pollution and other 'negative' goods from the final figure, and adding services which do not get paid for, such as housework (Miller 1990, p. 576). They called their new indicator 'net economic welfare' (NEW). Another indicator that has been developed is the physical quality of life indicator (PQLI): this is calculated for each country from their average life expectancy, rates of infant mortality, and literacy levels. A human suffering index has also been developed which incorporates measures of GNP per person, inflation, access to clean water, food sufficiency, literacy, energy consumption, urbanisation and political freedom. Japan comes out on top of this particular index, with least human suffering, and East Timor turns out to have the most suffering (Miller 1990, p. 576).

Another idea for measuring progress has been advanced by economist Kenneth Boulding. He suggests two indicators: one, to measure the value of goods and services that are based on sustainable use of renewable resources; the other, to measure goods and services based on the use of non-renewable resources that will be used once and thrown away. Progress would be measured according to how much the first indicator was increasing and the second was decreasing (Miller 1990, p. 576).

These alternative indicators have been resisted because they are often too difficult to measure and because they have not been politically popular. Politicians prefer to use indexes that emphasise and even exaggerate progress. However, in 1985 the OECD (Organisation for Economic Cooperation and Development) made a commitment to develop 'more accurate resource accounts', and in 1987 the Brundtland Commission recognised the need to take full account of the improvement or deterioration in the stock of natural resources in measuring a nation's economic growth (Repetto 1989, p. 42).

Nevertheless, changes to national accounting systems have been slow.

Back to the top...