The two preceding columns have presented, firstly, the case made by analysts who believe that, despite its limitations, the GDP remains the most appropriate indicator of economic size, rate of progress and level of welfare or well-being enjoyed by Guyanese. And, secondly, the case presented by those who strongly believe the opposite. That is, the GDP is an inappropriate indicator, if not worse; it could readily lead to misdirection on these matters. This week I shall evaluate these pros and cons, and also offer brief references to alternative measures.
To be clear, it should be observed that it is often those who oppose the GDP’s appropriateness who frequently promote alternative measures to the GDP. Their fundamental plea seems to be that a deeper understanding of development (and further, its promotion) requires “leaving the metrics of the GDP behind”.
In other words, the opposition is arguing, the GDP as a performance construct has outlived its usefulness. While it was appropriate for the expectations and information needs of the 1930s through to the 1970s, these are no longer relevant to todays’ development problematic. As a matter of fact that problematic encapsulates economic considerations, as well as 1) social costs and benefits to society, 2) environmental impacts and 3) issues of equality and inequality.
Such recent concerns have also been merged into the broader global project of the Millennium Development Goals,