Dissident data – The Subject Matter(s) – Part 1

Quick note from FoV:

Fields of View is thrilled to host ‘Dissident Data’ a new blog series by Dr. Niveditha Menon, who is a senior research advisor at the Centre for Budget and Policy Studies. Here is the Part 1 of the second post. You can read the first post here

When I was in the field collecting data for my dissertation on domestic violence, my advisor, Mike, recommended that I write about my experiences every day. I was not very disciplined, so I would only do them every week. These were not technically field notes, but my own reflections on what I was experiencing when I was in the field. I decided to make them into letters that I sent every week to people who were interested in hearing from me. This is an entry:

I know I have glorified the process of data collection in previous letters. But it can be really hard… I sometimes get so angry I don’t know what to do with myself. The anger is fine.  But after a while, I feel myself getting a little cynical about the lives of the women I encounter. I remember feeling shocked at my own reaction in one interview when one woman (whose husband was not beating her) said that she was very happy with her husband. A voice in me said – yeah well, how long is that going to last? I realized immediately that I can’t think about the world that way, or I am not going to be a very happy person.  

I recently interviewed a woman whose story made me mad during the interview. I wanted to shout, scream, do something for this woman and do something to her mother-in-law. Usually, this anger hits me after I have finished with the interview and usually, I try and control myself when I am interviewing. But during this interview, I felt like screaming obscenities at the world and I don’t even know any good ones. Well, it passes. It always does.

What I didn’t realise then and am able to see so clearly now is that it doesn’t always pass. It stays, much longer than it should. These emotions of anger and helplessness were the first formative lessons in data collection that I learnt in the field, and in various forms, they have stayed with me ever since. These are the stories and lessons that I still go back to when I have to understand anything about oppression or violence, and about how the world is not tilted along the right axis for many people.

I brought these feelings to bear, to some degree, in my writing. When I wrote my case notes, I would bring a mental picture of the women I had been interviewing. By concentrating on her face, I would try to remember what she said and how she said it. Sometimes, this made the writing process very hard, because I would remember their faces flicker with emotions that I couldn’t even begin to name. I would remember the shuttering down of something dark and lightening up of something joyful. Somewhere in the middle was a story that I probably did not do justice to. And that feeling of impotence has survived all these years . . . that I could listen more, that if I could talk more, that if could do more, then it would all be better.

I remember thinking (with all of my feelings of inadequacy, cynicism, and anger) that the research that I was doing could not even begin to address the level of structural inequalities that I was seeing and recording. No amount of empathetic writing or theoretical understanding could take away the pain and hurt that the women I was interviewing were experiencing. It started to feel as though all of research is pointless, and the role of the researcher, even more so.

At the time, the very wise Mike told me – I can’t dwell on what isn’t, or I can never do anything with what is. I must admit, I didn’t quite understand it at the time. I was so lost in my own self-flagellation and my own navel-gazing that I didn’t get it. It was only years since that I understood that he was trying to tell me (at least) two things. First, the pain and anger I was feeling was an abstract one. It was on behalf of someone else and something else. It cannot be made mine, even if I tried. So, it had to be channelled into a more productive arena; it can be channelled into more empathy, for instance. Second, the feelings of frustration and impotence that I was experiencing are not the same as being self-reflective. These feelings of impotent guilt cannot (or perhaps, should not) be used to punish myself. It has to be channelled outward into asking questions of possibilities – What can be done? How do I do what I do best to make it better? How do I contribute? What can I change?

Over the years since that advice was given to me, what I have learnt is that these emotions that we take to and take from the field act as anchors. They make us empathetic, they make us accountable, and they make us human. Our knowledge of the complexities behind simple statements (of fact) comes from these complicated feelings we have towards and about those who have shared their lives (and data) with us. Any knowledge (or data) that we have derived from these interactions are, thus, almost always tinged with this emotional content. And this is really what I remember when I remember the lessons that I have learned in the field. So, no, these complicated feelings do not always pass. Perhaps, they shouldn’t.

Game Session of ‘Made to Order’ at City Scripts, Indian Institute for Human Settlements, Bangalore

 

Date: 17th February 2018

Duration: 75 minutes

Number of Participants: 14

 

Introduction to the Game

‘Made to Order’ is a physical, multiplayer game that can also accommodate spectators developed by Fields of View to explore the intersecting dimensions of caste, class and gender, and how intricately they are bound. The game was first developed for Gender Bender 2017, a production Sandbox Collective and Goethe Institut Bangalore. The game involves participants playing different roles set in the garment industry, drawing from real-life qualitative and quantitative data.

 

 

Overview of the Session

A modified version of the game was conducted at IIHS as part of City Scripts, an urban writings festival. In this version, the garment workers were divided as employees of two competing garment factories, who were represented by their upper managements.

The participants were conversant with English and in the age group 25-45. Some of them were working in research institutions, including IIHS. The game session lasted for 75 minutes, including 15 minutes of briefing and 60 minutes of gameplay. Four participants played the role of workers in two garment factories, while nine of them formed the upper management of those two factories. The remaining participants formed the spectators. Each worker, keeping in mind their gender, caste and class, had to make decisions based on different situations through the game.

 

Observations of Gameplay

  1. Three of the workers spent money on achieving at least two of their goals. One of them chose not to fulfil any. None of the workers interacted with each other during the game.
  2. During questions put to the upper management, they discussed with one another and gave unanimous decisions each time. When both groups had to decide on measures to improve their bid, they were competitive and mindful of the other group’s choices. There was no interaction across the groups.
  3. There were few comments during the game and they were limited to providing reasons for the choices made, such as “Even though it is costly, I will take the private transport service because I need more time to help my husband and children” and “I have to constantly keep shifting houses so there is no reason for me to get it repaired”.
  4. Questions raised were mostly clarificatory in nature and included “My caste is ‘Holeya’. Does it fall under the list of Scheduled Castes?”; “Can I reduce costs by buying a cycle to travel to work instead of subscribing to a private van service?”; “I know that there is little chance of being selected since I am a woman, but can I still apply for the vocational training programme?”; and “Can we choose the same measures to improve our bid as the other factory?”.

 

 

Reflections

  1. In previous sessions of the game, many participants who played the characters of the workers were visibly involved with their characters, reading their profiles slowly, pausing to think before deciding on their choices, and providing reasons on each occasion. In this session, the choice of decisions was much quicker and often without stating any reasons. One of the workers read out the narrative of all their choices rapidly and without pause, as though they were in a hurry to finish reading regardless of the content.
  2. The upper managements, when presented with a choice to either not pay workers’ wages for a certain period or to cut them from thereon, picked the latter each time. However, when they had to compete with the other factory to improve their bid, they chose to implement measures, such as contracting out employment, that could lead to a loss of wages entirely.
  3. A participant playing the role of a female sanitation worker whose husband had passed away a few years ago, stated that the question of her pregnancy was not applicable to her. We had not considered or observed this outcome – of limiting the possibility of pregnancy within wedlock – in previous sessions of the game.

Internships at Fields of View

Recently, we were asked, what intern profiles do you seek at Fields of View. For a minute, we were wondering what to say .

We have had interns whose backgrounds range from law, social sciences, technology, and art. We conduct workshops and courses at design colleges, architecture colleges, as well as engineering colleges. Our projects are at the intersection of art, design, technology, and social sciences, and so we necessarily need people from diverse backgrounds to participate, and the profiles of all researchers at Fields of View and our interns mirrors this need for diversity. We realized the only possible answer to the question of what intern profile we seek is to say that we are discipline agnostic.

Image 1 – Some interns who have worked with us in the past.

Mail work@fieldsofview.in if you are interested in pursuing an internship here, with details of your background and what areas you are interested in.

Dissident Data – a new blog series

Quick note from FoV:

Fields of View is thrilled to host ‘Dissident Data’ a new blog series by Dr. Niveditha Menon, who is a senior research advisor at the Centre for Budget and Policy Studies. It is an idea that has been brewing awhile, and without much more ado, here it is, Niveditha’s first post introducing the series.

A long time ago, when I was working in an interdisciplinary lab, we organised a workshop to showcase our work. To prepare for the workshop, I was to give a colleague a brief description of the project that I was working on at that time. I handed her a five-page document describing everything about the project. We had just started working together, so she found it prudent to keep her shock and dismay to herself. Later, when the workshop was over, we had a chat about how useless it was to give her a five-page document for an infographic that she was trying to create. What I needed to give her, she said, was a story. I replied – but I don’t know how to tell stories. She said that that’s what I have been doing any way — my research is a story about data.

Those of us who are researchers (and some of us who are not) have to contend with various forms of data. If I may be permitted to generalise, the quantitative amongst us typically think of numbers and figures and graphs when we think of data, and the qualitative think through narratives and themes. But underneath it all, what we are trying to convey is a story that we see in our data that we think is important to understand our world better. This blog series is about unpacking the story that is hidden in our data, be it the trials and tribulations of contradictions within our data, or the euphoria of finding something unexpected.

I come from a qualitative feminist sociological tradition, so I work with a particular framework of feminist and anthropological methodologies that does not treat data as abstract. For me, all data – whether quantitative or qualitative – are relational and are produced by the specific socio-cultural and economic contexts in which the questions are framed and the researcher is located.

My advisor once told me that data doesn’t speak. It is not an animate object to have its own language. It exists because I have caused it to exist. It is a thing shaped by me, and can speak to only that which I see or which I allow others to see. It is moulded by the nature of my questions and the tonal voice in which I have asked these questions. Many researchers do not subscribe to this contention. Yet, I am sure that they also have had to confront the fundamental questions around the nature of data: How is data produced? What are the rules related to data collection? What kind of data is necessary to make an argument? What is to be done when data misbehaves?

Of course, there are tomes written by researchers of all disciplines trying to answer these questions. We simply have to google ‘epistemology’ to engage with any of these authors. This blog series will not revisit these themes and debates, although it will heavily draw upon them. Instead, this data blog series will engage with the relationship between the production of data and the presentation of it. It is about the personal journey that researchers take with our data in our quest for a better understanding of the world and how it works.

The rationale for documenting such a process is two-fold: (1) to lay bare the difficult decisions, dilemmas, and contradictions of data that we all encounter in our working and daily lives, and (2) to engage with the fundamental role that researchers and non-researchers have in the process of producing, analysing, and representing data. It is, in some ways, a space to engage with the myriad ways we submit to the authority of data, and to self-reflect on the implications of this submission.

This tentative mandate, however, is subject to change, as the series evolves. But for the next few blogs, authors, broadly defined as those who are producers and conveyers of data, will be drawing from their own to tell a story of their relationship with data.

Constitution Project workshop at FoV

What does it mean to be citizens? To have a vision for our society, to build a democracy for the people, of the people, by the people? The constitution of India is that social contract that binds us as citizens but it is not set in stone. So what would it entail? To get people to engage with it as a living document, with both the letter and the spirit, with how the constitution forms the social contract and the basis for identity and citizenship in the country?

In order to start the conversation, we decided to hold a day-long workshop at FoV house, where people from diverse backgrounds could come and work in interdisciplinary teams to build tools that will facilitate discussion, debate, and dialogue with the Constitution.

On March 17th, a mildly humid Saturday morning, the front porch of the FoV house was lined up with 30 odd pairs of shoes. Inside, the room was packed with lawyers, academics, policy researchers, designers and artists. A few sips of tea and coffee were followed by a round of introductions. It was 10 a.m and the constitution workshop had kicked off with great enthusiasm.

The participants were divided into four groups:

Group 1- Apurba with a background in Law, Uruj from Green Peace, Ambika from CIS with a background in English literature and Media studies, Mehul Kanodia from Quest Alliance, Shreyan Acharya a Lawyer currently working at Centre for Law and Policy Research, Shruti Kabo a designer from Icarus and Simar from Lifetide.

Group 2 had the following participants: J. Mandakini from Centre for Law and Policy Research, Vinod Ravindran, a freelance theatre artist, Sophia Chung with a background in Education, Tushant with a background in Game theory, mathematical and theoretical economics, Priya NM from NIAS and Samhita, a law student, Darshana from Alternate Law Forum.

Group 3 had the following participants: Guru Aiyyar from Takshashila Institute, Nishtha Sinha from CIS, Niveditha Menon from CBPS, Srijan Mandal, Faculty at Srishti Institute of Art, Design and Technology, and Ragini, Designer from Quest Alliance.

Group 4 had the following participants: Parth Sharma, an engineer from ISRO, Malvika Prasad, a lawyer by practice, Sushma with a background in HR, Anirudh Kanisetti, a researcher at Takshashila Institute, Ana with a background in political science and Siddhanth, with a background in conservation ecology and local governance.

The deep blue sea

The participants were given 2 cues to begin with a) Concepts from the preamble / Citizen-Person, and b) What goes into making of the Constitution of a country such as India. Participants could also choose an entry point of their own to guide their inquiry for the day. The exercise began with each group mapping the ecosystem of their chosen target audience and then further refining the audience they would like to build the tool for. By the end of session one, each group had to identify a) the objective of their tool, b) who is the tool for and c) what will the dissemination of this tool involve.

Minutes into the exercise one could see, the participants breaking away from their mild hellos and diving into ardent discussions around equality, fundamental rights, democracy. They could take many directions and the possibilities seemed endless. They were caught many times in the tug of war between the theoretical and the actionable. At last after a few nudges here and the participants committed to an objective, an audience and an idea.

After lunch the participants had fueled up and rolled up their sleeves to dive into the next phase of the workshop – building concepts and iterate over their tools. There were conversations around empathy, role plays and games. By the end of the second session the four groups had come up with working prototypes of four different games.

Group 1 had come up with an activity-based game to communicate fundamental rights to offline adults. They designed a card-based game (like rummy) where players can match right cards to their profile (which described their particular situations). By playing the game, the player would understand which rights are applicable to the kind of situation they face.

Group 2 designed a game on right to life. The aim here was to keep the person alive. The game starts out with certain markers of identity of a person and with each round new markers are introduced. Certain situations that affect the right to life of the person crop up during gameplay. All players have to collaborate to keep the person alive. The game was designed for offline adults in informal spaces.

Group 3 wanted to create a tool that facilitates a breakdown of concepts in the preamble. Their intended audience were young adults (students in publicly funded universities/schools, disadvantaged youth, community colleges). They created a card-based game that dealt with the concept of equality. In the game each player held a profile that was endowed with certain privileges/disadvantages. The intent of the game was to generate empathy by evoking a sense of inequality that existed between the players themselves.

Group 4 created a card-based game around the functioning of a democracy. The objective of this tool was to explore how to use democracy in order to bring change. The game for designed for urban young adults. The players were assigned different identities and based on their respective profiles, they could negotiate with the system in order to acquire certain assets. The game tries to evoke the power of citizens along with the sense that not all citizens are equal.

When it comes to something like the Constitution or the Law, the urge to look up an expert’s opinion, for one right answer comes easily. But at the workshop our participants tackled a number of ideas from the constitution by working with the document. The pressure to create a tool in limited time, laid down constraints that a lot of the participants had never worked with before.  Each person brought to the table their own disciplinary perspectives and layered in their view of this document in order to have a dialogue.

With a lot many reflections, musings and laughs, we wrapped up for the evening, hoping that the conversation will be taken even to those neighborhoods where the rain hasn’t brought respite from the humid afternoon.

Fields of View and IWI

In order to demonstrate the components and capabilities of the Inclusive Wealth Index (IWI), Fields of View is planning on using it in a game as a policy design exercise. This computer supported game will simulate different scenarios, and will enable physical interaction among the participants. The game looks at different aspects of the IWI: interconnectedness of parameters, relating qualitative and quantitative parameters, different indices, and possibilities of change for the future.

The target audience of the game are undergraduate students of economics and sustainability studies, in addition to policy-makers. It is assumed that the participants understand the mechanism of national budgets, and can perform basic mathematical operations.

This game has been designed to complement traditional teaching methods. The learning objectives of the game are as follows:

  • Understanding the components that are used to calculate the IWI, and how it compares other development indices such as GDP, HDI, etc
  • Learning how changes in national policies can alter different indices, and what advantages the IWI offers in understanding these changes
  • Encouraging players to develop a futures orientation, and apply the same to shape real-life sustainable economic policies

In this case, the players will be asked to prepare a national budget for a given country—using their judgment based on the national indices (IWI, GDP, etc.) they’re given. Based on these standard development indicators, the players will determine a fiscal budget plan and basic monetary policy.

The game is divided into a briefing, gameplay, and debrief session. In the briefing session, participants will be given a survey to determine their decision-making preferences—which will give them some information about the socio-political context of that country. As part of the gameplay session, the players set national targets (ex. levels of employment, sustainability, poverty levels), and use preferred strategies to achieve them. The game proceeds in multiple rounds, wherein each round simulates one year of operation. The country’s economic prosperity (after each round) will then be published to the participants, and will be calculated using indicators like GDP, HDI, and IWI. Finally, the debrief session looks at the advantages and disadvantages of using different development indicators, and examines the ability of the IWI to reflect upon a country’s economic health.

The system dynamic model of the game can also be used as an interactive way of engaging players with the IWI. For example, an online interactive visualization could be developed for policymakers and students to see the effects of different policies on the future economy. The inputs and interventions will be based on data from the Inclusive Wealth Reports, and from information generated by the game.

Eventually, the IWI could become a more appropriate and comprehensive indicator than GDP or HDI to measure the sustainable development of an economy. But we have realized that this requires serious involvement of different types of audience, such as students, policymakers, politicians, educators, economists, and other such groups.

To draw audiences from different backgrounds to understand the IWI and explore the implications of planning with IWI, we are in the process of building a game called Levers of Change. All the players will be responsible for a country’s well-being, and will plan for investing in different forms of capital, such as the human, natural, and produced capital. Players should be able to balance their economic growth with sustainable development to achieve sustainable goals. The game will challenge players to plan accordingly to ensure global sustainability.

The game design process relies on the functions and indicators in the IWR 2014 report. IWI accounts the wealth of all major socio-economic and environmental parameters and is represented as an index through incorporating several complex statistical models and mathematical formulas. We are triangulating data of quantity and price of produced crops, permanent cropland and pastureland from Food and Agriculture Organization of the United Nations (FAO) to calculate wealth of agricultural land. Similarly, we triangulated statistics on forest area, and stock of timber for all listed countries from FAO. We are also validating data on production, and reserves of oil, coal, and natural gas from US Energy Information administration to calculate the wealth of fossil fuels. We apply the similar procedure for the data on production, reserve, and price of all minerals from US Geological Survey to measure the wealth of minerals.

The most interesting part of the study is to calculate wealth of natural capital. Mathematical functions to calculate the wealth of different natural resources involve multiple numbers of independent variables, such as quantities or natural stock of resources, real prices, and rental prices. The major challenges in calculating natural capital are to identify all independent variables for the model and to validate units of all variables.

Conclusion of IWR 2014

This post was authored by Richa Gupta during an internship at Fields of View.

(Please read the previous blog ‘The Inclusive Wealth Report 2014’ on Inclusive Wealth Index)

These two reports have led to the development of several recommendations for the included countries. These include the incorporation of Inclusive Wealth into planning post-2015 Sustainable Development Goals (SDGs), and the evaluation of macroeconomic policies (such as monetary and fiscal policies) based on IWI rather than on GDP per capita—as this would ensure sustainable and long-term, rather than purely short-term, growth.

Additionally, nations experiencing diminishing returns (that is, the decrease in marginal output) of natural capital are encouraged to invest in reforestation, agricultural biodiversity, and renewable natural capital. Moreover, as said by Dr. Anantha Duraiappah, director of the UNESCO / Mahatma Gandhi Institute of Education for Peace and Sustainable Development, “The report is a tool for making macroeconomic decisions on what and where to invest”. And lastly, as written in the Inclusive Wealth Report 2014, “The inclusive wealth index is […] a complement to GDP, not its replacement. The shift to sustainability as a core development pillar demands an index that can quantify, measure, and track sustainability”.

However, although the IWI is a better indicator of economic growth and prosperity, it still has its own limitations. For example, it does not factor in happiness levels, suicide rates, life satisfaction, and the accessibility of housing. It also doesn’t take social capital of a country into account; social capital is a form of economic and cultural capital wherein goods and services are produced for a common good rather than for selfish interests, and transactions are characterised by trust, cooperation, and reciprocity.

In addition, natural capital is often difficult to accurately price. For example, the UN cannot include common access resources like clean air—since it is not directly owned by anyone, and is available for people to use without payment. Hence, when the Inclusive Wealth Index is computed, only natural capital with a market price can be included (such as petroleum, gas, metals, and timber). The Economist suggested another example: bees create honey, which can be sold on the market. But they also pollinate nearby apple trees, a useful service that is not purchased or priced. So, calculations of the Inclusive Wealth Index will invariably be rough, unless economists make a conscious effort to quantify the value of clean air, pollination, and the myriad of others.

But despite its limitations, the concept of Inclusive Wealth has been widely embraced, since it represents development based on concern for the environment and future generations. And it has been predicted by Professor Dasgupta that eventually, people will drop the adjective “inclusive”, and will only call it “wealth”—since, after all, economic wealth is not synonymous with solely income, but also with human capital, the environment, and sustainability.

 

The Inclusive Wealth Report 2014

This post was authored by Richa Gupta during an internship at Fields of View.

(Please read the previous blog ‘The Inclusive Wealth Report 2012’ on Inclusive Wealth Index)

The Inclusive Wealth Report of December 2014 covers information from 140 countries, and was released in New Delhi, India. It laid a special emphasis on human capital. The report concluded that 85 of the 140 countries were producing sustainably, in terms of inclusive wealth, while the consumption patterns of the 55 others were considered unsustainable.

The report also found the extent to which human capital and natural capital are huge indicators of wealth, as compared to only produced capital (which is accounted for by the Gross Domestic Product). For instance, while global GDP rose by 50% from 1992 to 2010, the IWI rose by a relatively paltry 6%. As said by Dr. Partha Dasgupta, chair of the 2014 Report’s science advisory group, “vast losses in natural capital (and small increases in human capital) largely explain the anaemic overall growth in Inclusive Wealth worldwide despite enormous gains in produced capital”.

Components of Global Inclusive Wealth, from 1990 – 2010

Type of Capital % of total Inclusive Wealth % change from 1990 to 2010
Produced Capital 20 + 50
Human Capital 57 + 8
Natural Capital 23 – 30

The following statistics also show the extent to which the Gross Domestic Product is an inadequate standard of a nation’s wealth and prosperity:

As can be extrapolated from the December 2014 report, in the US, India and China, wealth measured only by GDP (from 1990 to 2010) rose by 33%, 155% and 523% respectively.

However, when measures of the social values of natural, human and manufactured capital were considered, the USA’s Inclusive Wealth Index rose by 13%, India’s by 16%, and China’s by 47%—over the same span of time. These are gaping disparities, and provide an indication of the narrow scope of the Gross Domestic Product. The statistics of a few other countries have been tabulated below:

Country % change in GDP from 1990 to 2010 % change in Inclusive Wealth from 1990 to 2010
US +33 +13
India +155 +16
China +523 +47
Ecuador +37 –17
Guyana +97 –2
Qatar +85 –53
Tanzania +67 –37

 


 

The Inclusive Wealth Report 2012

This post was authored by Richa Gupta during an internship at Fields of View.

(Please read the previous blog ‘Measures of Wealth and Prosperity’ on Inclusive Wealth Index)

 Inclusive Wealth = (social value of manufactured capital) + (social value of human capital) + (social value of natural capital)

Natural capital encompasses the world’s stock of natural assets, such as fossil fuels (oil, coal, natural gas), minerals (bauxite, nickel, copper, iron, zinc, etc.), agricultural land (croplands, pasturelands), and forest resources (timber and non-timber forest resources). In the context of Inclusive Wealth, human capital comprises of education and health, and manufactured capital consists of equipment, roads, and machinery. Another variable used to compute IWI is its health capital, which includes health capital by age, and probability of dying by age.

So, rather than being ranked in terms of GDP, countries are ranked according to inclusive wealth. To take an example, USA’s inclusive wealth was almost $118 trillion in 2008 (with prices at those of the base year, 2000), whereas its GDP was only a fraction of that value. So, this observation implies that the USA is rich in either human capital or natural capital, or even both (in this case, it is human capital).

 

Country 2008 Inclusive Wealth ($ tr) 2008 Real GDP ($ tr)
United States 117.8 14.7
Japan 55.1 4.8
China 20.0 4.5
Germany 19.5 3.7
Britain 13.4 2.8
France 13.0 2.9
Canada 11.1 1.5
Brazil 7.4 1.7
India 6.2 1.2

Source: United Nations, World Bank

As written by the Inclusive Wealth Project, “The index measures an asset’s wider value to society, and not the price for which it could be bought or sold”. Professor Partha Dasgupta was one of the specialists who came up with the IWI; he criticised the GDP for neglecting the social value of natural ecosystems, and also observed that while the GDP and HDI indicators were rising for most of the third-world countries, their sustainable economic development (i.e., the approach that fosters economic growth while preserving environmental quality) was negative, except in the case of China. As said by Prof. Dasgupta, “Adam Smith did not write about the GDP of nations, nor the HDI of nations; he wrote about the ‘Wealth of nations’. […] Leading economics journals and textbooks take nature to be a fixed, indestructible factor of production. The problem with this assumption is that it is wrong: nature consists of degradable resources”.

The first Inclusive Wealth Report was released in 2012, and included statistical data from 20 countries. It is the first of a series of biennial reports, whose twenty included countries accounted for approximately 56% of the world’s global GDP, from 1990 to 2008. It was a core project by the UNU-IHDP (United Nations University’s International Human Dimensions Programme), in collaboration with the UNEP (United Nations Environment Programme). Before and after the 2012 report was published, the following statistics were noted:

 

Country % growth in economy from 1990 to 2008, based on GDP % growth in economy from 1990 to 2008, based on IWI
China +422 +45
USA +37 +13
Brazil +31 +18
South Africa +24 -1

This implies that these four countries substantially depleted their stocks of fossil fuels, fisheries, and forests—while simultaneously raising their Gross Domestic Product. Moreover, while India was ranked second in GDP per capita, according to the IWI report (with a 4.3% per year increase in GDP per capita), it ranked 6th in the Inclusive Wealth Index per capita, with a positive growth of 0.9 % per annum.

The following diagram, as published by the Inclusive Wealth Index website, depicts the per capita growth rate of IWI of the 20 countries (according to 2012 IWR). As can be seen, Colombia, Nigeria, South Africa, Saudi Arabia, Venezuela, and Russia experienced negative IWI growth rates—and were hence deemed unsustainable.

Furthermore, it was observed that although 5 countries (Colombia, Nigeria, Russia, Saudi Arabia, Venezuela) portrayed positive GDP per capita and HDI, they had negative IWI per capita growth rates. This depicts the deficiencies of not only the GDP, but also of the Human Development Index Hence, this graph also illustrates the importance of measuring economic health based on the IWI.

Measures of Wealth and Prosperity

This post was authored by Richa Gupta during an internship with Fields of View.

 

The Gross Domestic Product (GDP) has long been used to measure the prosperity and health of an economy. The GDP is defined as the market value of all final goods and services produced in a country’s economy, over a given time period (usually a year) [1]. It includes the four components of spending—spending by consumers, firms/businesses, the government, and foreigners (on exports).

 

According to the expenditure approach, GDP = Consumption + Gross Investment + Government Spending + (Exports – Imports)

 

There are other variations of GDP that are also in use, such as the NDP (Net Domestic Product), GNP (Gross National Product), and NNP (Net National Product). That said, all of them still factor in variables related to a country’s manufactured/produced output.

 

 

It is essentially the annual measure of a country’s output, but adjusted to account for depreciation (depreciation refers to reduction in the value of an asset, such as a car or house, over time).

 

  • Gross National Product = GDP + (net income inflow from abroad) – (net income outflow to foreign countries)

 

The GNP is the total value of a country’s output (final goods and services) produced by a country’s residents (domestically produced goods and services).

 

 

The NNP is the monetary value of domestically produced goods and services, minus depreciation.

 

Despite its variations, the Gross Domestic Product is largely used as a metric of a country’s prosperity and economic health. Nominal GDP (i.e. GDP evaluated at current market prices) is used to determine the economic performance of a country and to make international comparisons.

 

However, widely used as the GDP is, it has still come under criticism for not accounting for a range of factors; for example, it cannot accurately measure standards of living, such as levels of education, health, life expectancy, and quality of life. Furthermore, it does not look at negative environmental externalities caused by production, such as compromised air quality, water pollution, and land degradation. It also fails to look at the sustainability of capital stock used; capital stock is the total amount of a firm’s capital, represented by the value of its issued stock. All in all, the GDP of a country cannot give policy-makers an indication about the economy’s future; it’s all about the present. In fact, as said by Danish politician and former environmental minister, Ida Auken, “we need to move beyond GDP as soon as possible”.

 

Since GDP on its own cannot account for negative environmental externalities, a modification of the Gross Domestic Product was duly proposed, called the Green GDP. Green GDP is an index of economic growth that factors in environmental quality to the conventional GDP. It monetises the loss of biodiversity, and takes into consideration external costs caused by climate change. For example, if there is an oil spill in a country’s ocean, the money used to clean up the spill and to treat subsequent illnesses will invariably be included in the country’s GDP—thereby making it appear better off than it was before the spill. China was one of the first countries to measure its performance based on Green GDP; the first green GDP report for 2004 was consequently published in September 2006.

 

Green GDP = GDP – (value of environmental degradation) – (price of fixing environmental damage) [2]

 

However, Green GDP does not look at human capital. Moreover, as remarked by renowned economists Joseph Stiglitz, Jean-Paul Fitoussi, and Amartya Sen, “[Green GDP does not] characterize sustainability per se. Green GDP just charges GDP for the depletion of or damage to environmental resources”.

 

Another index was also decided upon—the Human Development Index, or HDI. The HDI not only takes a country’s value of output into consideration, but also looks at four important criteria: life expectancy at birth, mean years of schooling, expected years of schooling, and gross national income per capita.  So, the HDI is a much more comprehensive measure of a country’s development, since it includes a social aspect as well.

 

However, GDP, Green GDP, and HDI are insufficient when it comes to gauging environmental sustainability This observation has led to the inception of the Inclusive Wealth Index (IWI), which computes a country’s wealth by also taking the environmental and sustainability dimensions into account. It was launched by the United Nations at Rio+20 (a conference on sustainable development), in an attempt to develop a divergent way of gauging prosperity. A country’s Inclusive Wealth Index includes natural capital, in addition to produced/manufactured capital and human capital. Measuring sustainability of a country is critically important, since, as stated by the Sustainable Housing Foundation, “our global future depends on it”.

[1] Tragakes, E. (2012) Economics for the IB diploma [With CDROM]. 2nd edn. Cambridge: Cambridge University Press.

 

[2] Tragakes, E. (2012) Economics for the IB diploma [With CDROM]. 2nd edn. Cambridge: Cambridge University Press.