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Measuring Progress: A Comparison of the GDP, HDI, GS and the RIE

Abstract

The current paper constructs a progress measurement appropriate for measuring multiple and different dimensions of progress. The paper is not meant to be a detailed discussion of the framework but rather a demonstrated application of the measure. The constructed resource-infrastructure-environment progress measure employs a non-monetary evaluation adopting a weighting technique based on public opinion. The proposed index is assessed from a single summary standpoint. The aggregation method is evaluated via a z-score standardisation technique. The progress index is applied to three countries that are representative of different clusters. They are Australia (mid-industrialised nation), Mexico (emerging economy), and the US (highly industrialised nation). These selected countries provide an opportunity to highlight any divergences that may exist in their perceived economic strength. The results showed Australia as consistently having the highest levels of progress, closely followed by Mexico and then the US.

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Notes

  1. 1.

    The importance of human, social and environmental factors was acknowledged by the OECD (2007) World Forum on Statistics, Knowledge and Policy, ‘Measuring and Fostering the Progress of Societies’, held in Istanbul, Turkey, June 27–30. This is also reflected in the ABS 2002, 2004a, 2006 attempts to measure progress.

  2. 2.

    An illustration of this can be seen in the work of Bilmes and Stiglitz (2006). Using standard economic and accounting frameworks, the authors assessed the economic costs of the Iraqi War. Even with such a narrow focus, their estimate was between US$1026bn and US$2239bn. This estimate occurs even after they omitted some of the most important costs of the Iraqi venture, as well as excluding costs borne by other countries, indirect costs such as the price of oil, and more importantly, the costs of the war to Iraq.

  3. 3.

    It is an 1850 essay by Frederic Bastiat titled ‘Ce qu’on voit et ce qu’on ne voit pas (That Which Is Seen, and That Which Is Not Seen). The cost of repairing the window at the time was six francs.

  4. 4.

    A similar scenario involves ‘building palaces in the desert’.

  5. 5.

    The estimate made by Hazlitt (1979) is based on his assertion that had the price relationship between agricultural and industrial products contained any logic, then the notion of perpetually preserving price relationships should be extended to every commodity at that time relative to every other. This is what he did.

  6. 6.

    WEF (2005, p. 19) limit their concerns to addressing the misunderstandings of measuring environmental sustainability; however the multidimensional nature of that topic makes it relevant to this discussion.

  7. 7.

    For a comprehensive presentation and justification of the conceptual framework refer to Natoli and Zuhair (2007, 2009).

  8. 8.

    Wolff and Resnick (1987) adopt Althusser’s concept of overdetermination regarding social formation. The term was first used in a social scientific context by Freud; however Althusser used it as a critique of classical Marxism’s determinism. His intention was to create space for a non-economist and non-reductionist analysis. Wolff and Resnick transform it into a post-structuralist version of Marxian theory.

  9. 9.

    As Allen et al. (1997) point out, that the use of linear programming to assess comparative efficiency was originally proposed by Farrell, but operationalised and popularised by Charnes, Cooper and Rhodes (1978).

  10. 10.

    Another two participatory approaches, although less popular, are the analytic hierarchy process and conjoint analysis.

  11. 11.

    For a more detailed analysis of the weighting procedures refer to Natoli and Zuhair (2007, 2009).

  12. 12.

    This substitution rate dilemma is found in most environmental impact assessment studies where most aggregations follow the linear rule and weights are attached according to their relative importance idea (Funtowicz et al. 1990).

  13. 13.

    Although the strength of the weighted geometric mean lies with its better theoretical properties that can lead to less information loss (Zhu and Ang 2009; Zhou et al. 2006), it is often used on data transformed by the linear normalisation method. The weighted arithmetic method is often linked with the z-score transformation which was the method employed in this study.

  14. 14.

    The GPI was not included as no results for Mexico are available.

  15. 15.

    A supposed paradox is said to occur with the trend of Mexicans fleeing their home country to the US. The present paper claims that this is due to a fixation on notions of perceived progress, or material wealth, as opposed to an adherence to a comprehensive conception of progress.

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Correspondence to Riccardo Natoli.

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Natoli, R., Zuhair, S. Measuring Progress: A Comparison of the GDP, HDI, GS and the RIE. Soc Indic Res 103, 33–56 (2011). https://doi.org/10.1007/s11205-010-9695-3

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Keywords

  • Measurement
  • Progress
  • Aggregation
  • Weighting