Page 164 - Invited Paper Session (IPS) - Volume 2

IPS195 Peter van de Ven

It's about time for a change: Broadening the SNA
framework to account for sustainability
and well-being
Peter van de Ven
Organisation for Economic Co-operation and Development (OECD)

Abstract
Economic growth, or the volume growth of GDP, can be considered as the
single most successful macro-economic indicator, having showed its policy
relevance since the depression of the 1930s. For many decades, it has basically
defined whether the economy is successful or not, or even more broadly
whether societal developments are going in the right or wrong direction. As
such, it has largely driven, and continues to drive, the policy agenda. GDP
actually does a pretty good job as an indicator of (monetary) economic
activity. However, when it comes to monitoring well-being of people, including
the future sustainability of this well-being, economic growth has many fallacies
and caveats. The link between continuous increases of GDP and enhancing
(sustainable) well-being is more and more questioned, debated and
considered totally flawed. From an environmental perspective, navigating on
GDP alone may show to be the shortest route to disaster.
For the above reasons, there is an increasing user demand for arriving at better
metrics that provide a more encompassing measure of developments in
(sustainable) well-being. It may not be possible to find what is considered by
some as the holy grail, an alternative catch-all indicator, that provides a perfect
monitoring instrument for well-being, which also takes into account the
present-day losses (or gains) in the possibilities to generate future well-being.
The pursuit of such an indicator may show to be a dead end road. Well-being
is a multi-faceted phenomenon that may only be captured by a dashboard of
indicators, such as for example the OECD Better Life Index.
The paper argues in favour of trying to define and populate an underlying
conceptual and statistical accounting framework for the indicators which are
typically considered relevant for well-being and its future sustainability. A
further enrichment of the central framework of national (monetary) accounts,
by including and combining a standard range of accounts on environment,
health, education and time use, could provide an excellent tool for enhanced
policy analysis. All of these additions need not necessarily be defined in
monetary terms, although monetising (degradation of) ecosystems could
further support the urgency of dealing with environmental sustainability.

Keywords
Economic growth; national accounts; OECD Better Life Index; sustainability;
well-being
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