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This paper compares alternative wealth estimates reported by the World Bank and in the Inclusive Wealth Reports. Although theoretical limitations and shortcomings are widely acknowledged in the literature, the extent to which the alternative approaches to wealth accounting matter empirically is not well known. Comparing the alternative data in levels, shares, growth rates, and monetary sustainability indices derived from them, major differences emerge between OECD and non-OECD countries. For the former, the alternative wealth estimates seem complementary, but only if a key assumption made in the derivation of inclusive wealth is violated. For the latter, the data seem much less useful. For example, depending on which data source is used, for the group of low income countries the share of natural capital in total wealth is either 36.8% or 60.4%, suggesting that extreme care must be taken if the composition of wealth were to be used to inform policy-making. Neither wealth data set provides a ‘definite guide’ to economic sustainability, but a combination of indices derived from both might be useful in a holistic assessment of sustainability. [ABSTRACT FROM AUTHOR]

It is increasingly common to use the Inclusive Wealth Index (IWI) to evaluate national sustainability; however, IWI's highly aggregated components and limited regional cases restrict its further application in achieving the Sustainable Development Goals (SDGs). This study extends the traditional three-component IWI framework into six disaggregated components, namely male/female human capital, advanced/ordinary produced capital, and renewable/non-renewable natural capital. We apply the modified framework to China and evaluate the sustainability performance at the provincial level. The results show that China continues to develop with an annual IWI per capita increase rate of 2.3%. Gender inequality is found to hinder the growth of IWI, whereas advanced product features benefit the growth of IWI. The results also suggest significant heterogeneity in provincial IWI primarily due to differences in economic development stages, geographic locations, and uneven IWI growth. IWI growth is largely driven by wealth accumulation resulting from human capital and advanced produced capital. In contrast, insufficient IWI growth is caused by a substantial amount of ordinary produced capital or a continued decline in natural capital. The study provides a basis for tracking progress toward the SDGs and measuring the heterogeneity of regional socio-economic development in China. [ABSTRACT FROM AUTHOR]

Ethiopia remains underdeveloped due to limitations in natural, human, social and built capital. A 2006 scientific atelier conducted in the city of Awassa, Ethiopia investigated investments in human and natural capital as a sustainable development strategy. Local stakeholders identified firewood shortages, degradation of croplands, rising lake levels encroaching on croplands and poor water quality as major impediments to development. They further identified ecological degradation as a key component of these problems, and they acknowledged multiple vicious cycles compounding the environmental and economic threats to the Awassa community. Proposed solutions included investment in natural capital in the form of reforestation activities, investment in human capital in the form of promoting more efficient wood stoves along with increasing public awareness of environmental threats, and investments in social capital in the form of inter-institutional coordination to address environmental problems. All recommended investments rely primarily on national resources, in distinct contrast to the extensive imports required for most built capital investments. Unfortunately, Awassa lacks the surplus necessary for major capital investments of any kind. The atelier therefore helped local participants identify potential funders and write grant proposals for various projects, though none have been funded so far. Reversing the ecological degradation on the scale necessary for sustained economic development in Ethiopia however will require a steady flow of substantial investments, and cannot rely solely on the short term generosity of funders. International payments for carbon sequestration and other ecosystem services could help provide the necessary resources. [Copyright &y& Elsevier]

Models of economic growth are typically based on the use of one or more stocks of productive assets to create goods for utility-generating consumption. The roles played by man-made capital, natural capital, and human capital have been explored in the literature, and more recently the notion of social capital has been brought to the fore. This paper provides an attempt to construct an inclusive model of growth, analyzing externalities and distortions due to market failures linked with social capital and environmental problems. [Copyright &y& Elsevier]

Economics has been defined as the science of allocation of scarce resources towards alternative ends. This definition implies that the first step in economic analysis is to determine what ends are desirable for society. Most sectors of the society would agree that sustainability is a desirable end, but there is little agreement as to what a sustainable future would look like. The University of Maryland Institute for Ecological Economics sponsored a democratic future search process designed to create a relatively detailed, shared vision of a sustainable and desirable USA in the year 2100. This paper presents the vision developed at that conference, examines the resources required to achieve the vision, and assesses the suitability of market mechanisms for allocating the required resources towards the desired ends. We find that markets are not efficient mechanisms for allocation in this case, and propose the institutions of a ‘strong democracy’ as a promising alternative. [Copyright &y& Elsevier]

Previously, accounting for comprehensive or inclusive wealth has focused on the supply side of capital assets. However, human well-being created by capital assets inherently depends on the demand side as well. In particular, if capital is not utilized at its full capacity, then realized or actual human well-being may be less affected by available capital than by effective or utilized capital. In principle, this notion is embodied in a shadow price, which is defined as the marginal contribution of capital assets to social well-being. The shadow price becomes higher if the underlying resource allocation mechanism improves. In practice, one can account for such underutilization by adjusting shadow prices to reflect only the utilized quantity of the capital in question. Furthermore, capital utilization has different, nuanced implications for produced, human, and natural capital, and its implications even vary across some classes of natural capital. Within this line of theoretical thought, we provide empirical estimates of the changes in inclusive wealth and sustainability of selected developing countries in recent years by comparing available and utilized capital assets. We find that sustainability assessments may be revised based on utilized capital, due to, among others, human capital underemployment and non-renewable natural capital accessibility. • Potential and actual human well-being correspond to available and utilized capital, respectively. • Shadow price is expected to be lower if capital is underutilized. • The discussion is related to primary commodities, capabilities, and functionings. • Examples include unutilized capital, unemployed human capital, and inaccessible natural capital. • They may revise sustainability assessment based on inclusive wealth in developing countries. [ABSTRACT FROM AUTHOR]