Alternative Social Welfare Measures Sample Essay

At present. gross domestic merchandise ( GDP ) is the most methodologically detailed index of societal public assistance. Its methodological analysis has been developing since early 50s by UNSTAT and is presented in a manual of more than 700 pages. In portion such extensiveness point to of all time mounting methodological jobs linked to aspiration to bring forth unvarying step of economic advancement. Two unfavorable judgments are in peculiarly lay waste toing for application of national GDP per capita besides as the taking index of societal public assistance: ( 1 ) GDP p. c. is one dimensional step incapable of showing multi-dimensional construct of public assistance. ( 2 ) GDP p. c. steps economic advancement which is decreasingly relevant even in mercenary societies with already achieved high income per capita where non-economic facets of societal public assistance go the chief drivers of public assistance patterned advance.

To account for these two functional failures of GDP. an alternate index of societal public assistance has been proposed by UNDP – human development index ( HDI ) . HDI measured by states distinguishes from GDP in two of import respects: ( 1 ) it is constructed as a compound index from three sub-indicators measured in volume footings. GDP p. c. . instruction of population and life anticipation at birth ; ( 2 ) GDP p. c. has been ab initio standardized relation to the threshold value at about 16. 000 $ . beyond which income growing assumingly decreasingly contributes to overall HDI ( methodological analysis changed so they use the logarithm of income now. to reflect the decreasing importance of income with increasing GDP ) .

HDI is therefore a compound index obtained as a simple norm of three sub-indicators. When one compares state rankings by GDP per capita and by degree of HDI considerable differences can be observed. Rich states do non rank the highest in HDI when their societal and human accomplishments lag behind their economic accomplishments. HDI so clearly induces states to send on more balanced societal public assistance philosophy between its mercenary. societal and human portion. Basically the same methodological attack to building of compound societal indices has been applied extensively in assorted countries of public assistance statistics. Some other noteworthy illustrations with luxuriant success in broadening our treatment on alternate societal public assistance philosophies are happiness and quality of life indices – such as those uniting ( composite ) indices in the field of “having. loving and being” as conceptualised by Allardt. 1972 ) – their debut as a primary public assistance steps has been officially announced late by France and Germany.

One of the most criticised facets of composed indexs applied as a man-made societal public assistance index is linked to observation that they normally lack serious theoretic justification for the choice of sub-indicators as representative constituents of societal public assistance step. Are three sub-indictors of HDI every bit relevant for societal public assistance in every of 150 states covered by the HDI? In the instance of felicity indices serious expostulations have been raised refering their strong subjective prejudice which rule out indicants on objectively achieved public assistance in a society. These steps ( HDI. felicity indices ) are debatable besides because they are produced as nonnamed steps ; they are non expressed in footings of money. old ages of life etc. but in an abstract term of index points. This straight exposes them to scientific and political use ( bury non that felicity indices are proposed as a replacement steps by politicians! ) . In this respect. GDP fares much better as it is more straight related to public assistance and sufficiently complex that it is more independent on political intervention. GDP methodological analysis provides that merely comparable ( pecuniary ) qualities are summarised in the aggregative index. while HDI evidently confuses apples and oranges. norms dollars with old ages of life.

In this respect. HDI type of indexs can non replace GDP per capita as a dominant public assistance index. This decision makes clear that the first coevals of alternate steps. which are meant merely as non-monetary replacements. failed. GDP is inappropriate as a societal public assistance index non merely in its cosmopolitan substance ( pecuniary ) but besides as a construct because it implies that societal public assistance is summational class. simple sum of its components and non a class emerging from synergism and confrontation between its constituents ( sub-indicators ) . If societal public assistance is meant as an built-in class. this should be clearly acknowledged besides in the ( alternate ) index of societal public assistance. The undertaking of bring forthing an alternate societal public assistance index GD. degree Celsius goes beyond seeking for the appropriate substance that best describes societal public assistance ( money. felicity. index points ) because it demands to oppugn cardinal rightness of present aggregate attack to building of such step ( irrespective of its substance ) .

Two alternate constructs of societal public assistance indicator’s composing are proposed: ( 1 ) index of spread between public assistance constituents such as a spread between short-run stuff accomplishments and long-run outlooks. or between nonsubjective – subjective public assistance etc ( Radej. Bole. 2005 ; Example 1. below ) and ( 2 ) index of convergence between its constituents such as between economic. societal and environmental constituent of public assistance ( Radej. 2010. Example 2 below ) . The first alternate attack is based on Calman’s ( 1984 ) thesis that human public assistance is related to the spread between person’s outlooks ( often set in long-run position ) and his/her existent ( short term ) accomplishments. Demand for more balanced public assistance between short and log-term effects has been farther elaborated in theory of sustainable development ( WCED. 1987 ) . Sen ( 1982 ) has taken similar way when he postulated that human public assistance is less dependent on available income than on the spread between his/her “capabilities and functionalities” .

To plan a spread index we take two composed indices of public assistance. state GDP per capita to denote short term accomplishments and one-year Adjusted net nest eggs index ( ANS. World Bank. 1997 ) to account for long-run outlooks – therefore connoting a societal public assistance construct of weak sustainability ( HicksHartwick-Solow ; in Pearce. Atkinson. 1995 ) . Next we organise both compound indexs orthogonally and analyze spread between each year’s combined index of achievement-expectation of a given state and diagonal in Cartesian infinite. Diagonal line identifies conjectural way of balanced sustainability of development between short and long-run patterned advance. Experimental testing of this index confirms that societal public assistance. when presented in two dimensional infinite normally displays more complete and sometimes significantly different way of societal public assistance compared to one dimensional. aggregate and massive presentations with GDP p. c. . HDI or felicity indices.

The 2nd alternate attack. proposed here is based on plural – normally triadic – definition of sustainable development in WCED ( 1987 ) which emerges as a consequence of convergence between economic. societal and environmental development which is normally presented with Venn diagram with three overlapping circles. The beginning of the attack is fundamentally indistinguishable to the attack in building HDI ( with three sub-indicators ) . but derivation of drumhead index is wholly different. In this instance we do non let for simple collection of sub-indicators into compound index. Alternatively we synthesise three constituents with the correlativity of information on how three constituents impact each other. This attack is non about how big but how consistent is patterned advance in public assistance constituents. Unfortunately. it turns out that information on cross impacts between three public assistance constituents are non available in official statistical information systems but need to be estimated individually. This might be executable merely with the qualitative grounds and adept sentiments. This sort of alternate index requires aggregation of more scattered grounds and more qualitative and soft methods in the formation of man-made index. However. this

appraising attack surely does non connote weaker logic of concluding about societal public assistance but more democratic or plural ( “mixed-method” ) attack in visible radiation of cardinal incommensurability of three public assistance domains. This alternate proposal is exhibited in Example 2 below which is for the clip being available merely as an analogy to the issue under probe. Paradigmatic bend is required when societal public assistance is observed from the point of view of unity between its several every bit of import but latently at odds constituents. In such a instance. non primary accomplishments in all three constituents are what affairs but secondary effects ( side effects or unwanted effects ) . When one observes societal public assistance neither as homogeneous nor aggregatable class ( like GDP. HDI. felicity indices ) but a heterogenous whole in its unity. s/he should concentrate on its secondary qualities ( spread. convergence ) .

As societies grow more complex. policy-makers should be progressively cognizant non merely of their ain agency’s primary aims narrowly defined. but besides of wider deductions and unwanted effects of their ( in ) activity. This conforms to a thesis that the most appropriate of all alternate public assistance bring oning policy intercessions is the one which is the most secondary effectual ( californium. Demsetz. in Schnellenbach. 2005 ) . The same rule is relevant to the idea of both Hayek and Popper. who take the position that the unintended effects of action are the chief concern of societal scientific discipline and that the being of unintended effects is a stipulation for the really possibility of the scientific apprehension of a complex society ( Vernon. 1976 ) .


Calman K. C. Quality of life in malignant neoplastic disease patients – an hypothesis. Journal of Medical Ethics. 10/3 ( 1984 ) :124-7. Pearce. D. W. and G. Atkinson. 1995. Measuring sustainable development. In: D. W. Bromley ( ed. ) . The Handbook of Environmental Economics. Blackwell. Oxford.

Radej B. . T. Bole. 2005. Quality of life in three European parts – appraisal with nonsubjective spread analysis. Presented at the SDRC Conference “Sustainability – Making The Culture” ; Aberdeen. 2-4. Eleven. 2005. Radej B. 2010. Synthesis in Policy Impact Evaluation. Ljubljana. Slovensko drustvo evalvatorjev. Working paper no. 3/2008 ( August 2010 ) . 20 pp.

Schnellenbach J. The Dahrendorf hypothesis and its deductions for ( the theory of ) economic policy-making. Cambridge Journal of Economics. 29/6 ( 2005 ) :997-1009.
Sen A. K. 1982. Choice. Welfare and Measurement. Cambridge: Harvard University Press. UNDP. 1998. Human Development Report 1998. UN Development Programme. Oxford: Oxford University Press. Vernon R. The »Great Society« and the »Open Society« : Liberalism in Hayek and Popper. Canadian Journal of Political Science. 9/2 ( 1976 ) :261-76. hypertext transfer protocol: //www. jstor. org/stable/3230923. [ III/09 ] . WCED. 1987. Our Common Future. Oxford and New York: Oxford University Press. World Commission on Environment and Development – WCED. 400 pp. hypertext transfer protocol: //www. un-documents. net/wced-ocf. htm. [ IX/06 ] . World Bank. 1997. Expanding the Measure of Wealth. Washington: World Bank.

Explanation: Graph nowadayss two orthogonally organized indexs of societal public assistance in three European macro parts for the period 1990-2002: EUW ( Western EU members. bluish line ) . EUCE ( EU members from Eastern and Central Europe. violet line ) . and WB ( Western Balkan. ruddy line ) . Horizontal axis represents composed index of present short term accomplishments as composed from a set of economic indexs ( GDP per capita. employment. rising prices ; 0 – states with the poorest value of economic accomplishments in Europe. 1 – states with the best accomplishments in Europe ) .

Vertical axis represents composed index of long-run outlooks for future advancement of societal public assistance which is represented with the index of adjusted net nest eggs ( ANS ) . This one embraces information about net nest eggs obtained as a difference between gross nest eggs ( in GDP. as obtained from national histories ) and environmental amendss ( measured with index of CO2 emanation amendss in GDP ) and eventual loses in human capital ( measured with index of national outgo for instruction in GDP ) . Balanced economic advancement between short and long-run societal public assistance would follow the diagonal line from underside left ( 0. 0 ) upwards ( towards 1. 1 ) .

The horizontal axis is read from left ( low economic public assistance ) to compensate ( high economic public assistance ) and can be seen as stand foring conventional position of economic advancement. Vertical axis is meant to account for sustainability constituent of present economic tendencies. When these two positions are combined. our perceptual experience of economic advancement may radically alter. This is the most obvious in the instance of WB. We can see that they experienced moderate economic advancement ( horizontal displacement from left to compensate ) . which suggest instead sulky. but non at all unfavorable economic advancement in short term position.

However such appraisal of their economic advancement would be wholly misdirecting taking into history the perpendicular axis demoing extremist impairment in future economic chance of WB part – do non bury the wars between some of these states between 1991 – 1999. War old ages were non so bad for economic system after all. but it had been black for regional societal public assistance in future. EUCE part has experienced big betterments in short term fruits of economic advancement but practically stagnated in longer term societal public assistance chances ( vertically ) . EUW part is the most advanced in economic advancement ( the most far right place in the graph ) but non in footings of long-run economic advancement ( indicating likely to excessive consumerism ) . This illustration shows that planar presentation of societal public assistance can show its complex content in wholly simple but besides more complete manner.

Example 2: Three dimensional presentation of compound index – On the instance of rating of Slovenian Energy Program’s ( SEP ) impact on Territorial Cohesion ( TC ) of Slovenia – 2. 2: Presentation of the consequences ( degree of

2. 1: Definition of TC ( a correlative or convergence ( ‘?’ ) between Tq. Ti. Te ) TC = ( S ? F ? E ) = ( Tq ? Ti ? Te )
integrating between TC constituents )

2. 3 ( A-C ) : How the consequences were obtained?

Legend: Sec. A & A ; B: Scale from -2 ( strong negative ) to +2 ( strong positive ) ; obtained with summing up from elaborate appraisal matrix using the undermentioned regulation: from 0. 00 to 0. 20 > 0 agencies impersonal impact ; from 0. 21 to 0. 50 > 1. agencies weak positive impact ; from 0. 51 to 2. 00 > 2 strong positive impact. Sec. Degree centigrade: ( 0. 0 ) = neutral/absent correlativity ; ( 0. 1 or 1. 0 ) = really weak ; ( 1. 1 or 2. 0 or 0. 2 ) = weak ; ( 2. 1 or 1. 2 ) = centrist ; ( 2. 2 ) = strong correlativity.

Explanation: For the clip being we can non show compatible illustration to the Example 1 above. We can merely exemplify the job on the correspondent instance of ex-ante rating of Slovenian energy plan ( SEP ) on territorial coherence ( TC ) of Slovenia. The imbrication ( correlate ) logic of its building as compound indices is the same in both instances. So. TC is defined ( 2. 1 ) as the convergence between three spacial sub-systems – P-physical. S-socio-cultural and E-economic. TC is a consequence of interaction between sub-systems: if hypothetically there were no interaction between them. overall TC would be absent ( despite of eventual separate accomplishments in all three systems ) . TC is non a direct consequence of alterations in P. S and E. but a consequence of convergence of convergences.

The intermediate component in collection process are bilateral convergences between three sub-systems. named Ti. Tq and Te and our undertaking in rating is to measure impacts of SEP in footings of three convergences – are they present. positive and balanced? – and correlativity between them. We needed to happen out how E related steps of SEP ( in row of 2. 3A ) impact on societal standards of rating ( S ) ? Are they balanced with the socially related steps ( S ) on economic standards of rating ( E in column of 2. 3A ) ? This correlativity describes value of Te for SEP’s impacts as really weak. with S-related steps more favorable for E standards of rating than the antonym. which clearly nowadayss imbalanced state of affairs. The same logic is applied to construe staying two elements of TC in 2. 3C.

Consequences are diagrammatically presented in subdivision 2. 2. They present degree of integrating between three constituents of TC ( Ti. Tq and Te ) as a compound index of territorial coherence. In the similar ( three or four dimensional ) attack one could build indexs of other complex and multidimensional societal public assistance issues such as sustainable development. quality of life.