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Theoretical foundations of sustainable economic welfare indicators -- ISEW and political economy of the disembedded system

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  • Brennan, Andrew John

Abstract

The conceptual foundations of the Index of Sustainable Economic Welfare (ISEW) are surveyed and critiqued. It is argued that the three underlying theories of community, psychic income, and social welfare economics supply certain theoretical foundations for the ISEW. The focal point of the theories is to evaluate the positives and negatives of economic growth, with the hope of achieving a practical measure of sustainable economic welfare. However, they are not as well developed as they should be: the three theories have partial, underdeveloped explanations of the benefits (services) and costs (disservices) generated in the system. The theoretical particulars of ISEW abstract from the workings of the capitalist system, because the ISEW advocates have not specified a society in the socioeconomic system which we currently have. Specifically, there is no underlying linked systems view of the disembedded economy -- where the exchange economy tends to dominate other aspects of culture. Without a systematic understanding of the political economy of capitalism, the ISEW is potentially flawed in design. Therefore, there is a need to search for a critical approach to sustainable economic welfare. As a point of departure, it is better to have a political economy theory. The political economy of the disembedded system provides an alternative theoretical approach to ISEW.

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  • Brennan, Andrew John, 2008. "Theoretical foundations of sustainable economic welfare indicators -- ISEW and political economy of the disembedded system," Ecological Economics, Elsevier, vol. 67(1), pages 1-19, August.
    • Handle: RePEc:eee:ecolec:v:67:y:2008:i:1:p:1-19
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    3. Lawn, Philip, 2013. "The failure of the ISEW and GPI to fully account for changes in human-health capital — A methodological shortcoming not a theoretical weakness," Ecological Economics, Elsevier, vol. 88(C), pages 167-177.
    4. Cook, David & Davíðsdóttir, Brynhildur, 2021. "An estimate of the Genuine Progress Indicator for Iceland, 2000–2019," Ecological Economics, Elsevier, vol. 189(C).
    5. Brennan, Andrew John & Kalsi, Jaslin Kaur, 2015. "Elephant poaching & ivory trafficking problems in Sub-Saharan Africa: An application of O'Hara's principles of political economy," Ecological Economics, Elsevier, vol. 120(C), pages 312-337.
    6. Van der Slycken, Jonas & Bleys, Brent, 2020. "A Conceptual Exploration and Critical Inquiry into the Theoretical Foundation(s) of Economic Welfare Measures," Ecological Economics, Elsevier, vol. 176(C).
    7. Mishal J. Al-Thani & Muammer Koç, 2024. "In Search of Sustainable Economy Indicators: A Comparative Analysis between the Sustainable Development Goals Index and the Green Growth Index," Sustainability, MDPI, vol. 16(4), pages 1-33, February.
    8. Yulin Liu & Xincheng Zhu & Yuhao Wang, 2023. "Revisiting and evaluation of the index of sustainable economic welfare based on artificial intelligence: data from 30 Chinese provinces from 2003 to 2019," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(4), pages 3123-3152, April.
    9. Armiento, Mirko, 2018. "The Sustainable Welfare Index: Towards a Threshold Effect for Italy," Ecological Economics, Elsevier, vol. 152(C), pages 296-309.
    10. Fox, Mairi-Jane V. & Erickson, Jon D., 2020. "Design and meaning of the genuine progress indicator: A statistical analysis of the U.S. fifty-state model," Ecological Economics, Elsevier, vol. 167(C).
    11. Arnaud Z. Dragicevic & Jason F. Shogren, 2017. "Sustainability Narrowness," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 20(06n07), pages 1-21, September.
    12. Kubiszewski, Ida & Costanza, Robert & Franco, Carol & Lawn, Philip & Talberth, John & Jackson, Tim & Aylmer, Camille, 2013. "Beyond GDP: Measuring and achieving global genuine progress," Ecological Economics, Elsevier, vol. 93(C), pages 57-68.
    13. Jyrki Luukkanen & Jarmo Vehmas & Jari Kaivo-oja, 2021. "Quantification of Doughnut Economy with the Sustainability Window Method: Analysis of Development in Thailand," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    14. Xincheng Zhu & Yulin Liu & Xin Fang, 2022. "Revisiting the Sustainable Economic Welfare Growth in China: Provincial Assessment Based on the ISEW," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 279-306, July.
    15. Günseli BERIK, 2020. "Measuring what matters and guiding policy: An evaluation of the Genuine Progress Indicator," International Labour Review, International Labour Organization, vol. 159(1), pages 71-94, March.
    16. Brennan, Andrew John, 2013. "A critique of the perceived solid conceptual foundations of ISEW & GPI — Irving Fisher's cognisance of human-health capital in ‘net psychic income’," Ecological Economics, Elsevier, vol. 88(C), pages 159-166.
    17. Menegaki, Angeliki N. & Tugcu, Can Tansel, 2017. "Energy consumption and Sustainable Economic Welfare in G7 countries; A comparison with the conventional nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 892-901.
    18. Philip Lawn, 2014. "Measuring sustainable economic welfare," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 23, pages 348-370, Edward Elgar Publishing.
    19. Cook, David & Davidsdottir, Brynhildur & Petursson, Jón Geir, 2015. "Accounting for the utilisation of geothermal energy resources within the genuine progress indicator—A methodological review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 211-220.
    20. Clive L Spash & Heinz Schandl, 2009. "Growth, the Environment and Keynes: Reflections on Two Heterodox Schools of Thought," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2009-01, CSIRO Sustainable Ecosystems.
    21. Rugani, Benedetto & Marvuglia, Antonino & Pulselli, Federico Maria, 2018. "Predicting Sustainable Economic Welfare – Analysis and perspectives for Luxembourg based on energy policy scenarios," Technological Forecasting and Social Change, Elsevier, vol. 137(C), pages 288-303.
    22. repec:sae:envval:v:18:y:2009:i:3:p:257-284 is not listed on IDEAS
    23. Kubiszewski, Ida & Costanza, Robert & Gorko, Nicole E. & Weisdorf, Michael A. & Carnes, Austin W. & Collins, Cathrine E. & Franco, Carol & Gehres, Lillian R. & Knobloch, Jenna M. & Matson, Gayle E. & , 2015. "Estimates of the Genuine Progress Indicator (GPI) for Oregon from 1960–2010 and recommendations for a comprehensive shareholder's report," Ecological Economics, Elsevier, vol. 119(C), pages 1-7.
    24. Guangdong Wu & Guofeng Qiang & Jian Zuo & Xianbo Zhao & Ruidong Chang, 2018. "What are the Key Indicators of Mega Sustainable Construction Projects? —A Stakeholder-Network Perspective," Sustainability, MDPI, vol. 10(8), pages 1-18, August.

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