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The Inclusive Wealth Index. A Sustainability Indicator, Really?

Author

Listed:
  • Géraldine Thiry

    (Le Collège d'études mondiales/FMSH - FMSH - Fondation Maison des sciences de l'homme)

  • Philippe Roman

    (CREDA - CREDA - Centre de Recherche Et de Documentation sur les Amériques - UMR 7227 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique)

Abstract

Among recent high-profile propositions to revise national accounts and to provide new indicators of sustainability and well-being, the Inclusive Wealth Framework and the related Inclusive Wealth Index (thereafter IWI), first released during the "Rio+20" Conference, undoubtedly stand out as the most promising endeavour. Built up at the confluence of welfare, development and sustainability economics, the indicator is supposed to bring information about the wealth of nations and their sustainability, in a comprehensive way. The inclusive wealth framework is nevertheless fraught with limitations, due to questionable theoretical assumptions and gaps in data availability. We propose a critical appraisal of the index and its underlying framework. Our conclusion is that these limitations undermine its capacity to reach the goals it was given, and to fulfill the requirements of a satisfactory sustainability indicator. Special emphasis is put on the misleading pretension of (neoclassical) economics to handle highly complex, uncertain and manifold issues, even on theoretical bases renovated by dropping some optimality assumptions. We briefly sketch alternative research avenues, that appear more conducive to the endorsement of strong sustainability, and less prone to economism. Alleged theoretical consistency and elegance should not beguile us when choosing indicators for sustainable and prosperous societies.

Suggested Citation

  • Géraldine Thiry & Philippe Roman, 2014. "The Inclusive Wealth Index. A Sustainability Indicator, Really?," Working Papers halshs-01011250, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01011250
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01011250
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    References listed on IDEAS

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    1. Guilhem Fabre, 2013. "The Lion's Share. What's behind China's economic slowdown," Working Papers halshs-00874077, HAL.
    2. repec:hal:cepnwp:halshs-00952752 is not listed on IDEAS
    3. Pierre Salama, 2014. "Les classes moyennes peuvent-elles dynamiser la croissance du PIB dans les économies émergentes ?," Working Papers halshs-00952752, HAL.
    4. Yukari Shirota, 2013. "A Study on Black-Scholes Formula with Computer Simulations and Graphics," Gakushuin Economic Papers, Gakushuin University, Faculty of Economics, vol. 49(4), pages 251-260.
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    Citations

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    Cited by:

    1. Géraldine THIRY & Philippe ROMAN, 2015. "L’indice de richesse inclusive : l’économie Mainstream au-delà de ses limites, mais en deçà de la soutenabilité ?," LIDAM Discussion Papers IRES 2015001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Christian Walter, 2015. "The two quantifications of the financial theory. A contribution to the critical history of financial modelling [Les deux quantifications de la théorie financière. Contribution à une histoire critiq," Working Papers halshs-01118147, HAL.
    3. Guilhem Fabre, 2015. "The Lions's Share, Act 2. What's Behind China's Anti-Corruption Campaign? [La part du lion, acte 2 : Les dessous de la campagne anti-corruption en Chine]," Working Papers halshs-01143800, HAL.
    4. Christian Walter, 2015. "Jumps in financial modelling: pitting the Black-Scholes model refinement programme against the Mandelbrot programme [La modélisation des discontinuités boursières : le programme de Mandelbrot et le," Working Papers halshs-01146581, HAL.
    5. Engelbrecht, Hans-Jürgen, 2016. "Comprehensive versus inclusive wealth accounting and the assessment of sustainable development: An empirical comparison," Ecological Economics, Elsevier, vol. 129(C), pages 12-20.
    6. Xiaorui Wang, 2019. "The National Ecological Accounting and Auditing Scheme as an Instrument of Institutional Reform in China: A Discourse Analysis," Journal of Business Ethics, Springer, vol. 154(3), pages 587-603, February.
    7. Sudip Chaudhuri, 2015. "Premature Deindustrialization in India and Re thinking the Role of Government [La désindustrialisation précoce en Inde : pour un nouveau rôle du gouvernement]," Working Papers halshs-01143795, HAL.

    More about this item

    Keywords

    inclusive wealth; sustainability; well-being; indicators; green accounting; richesse inclusive; soutenabilité; bien-être; indicateurs; comptablité verte;
    All these keywords.

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