Problem
Inadequacy of economic accounting systems
Experimental visualization of narrower problems
Other Names:
Excessive reliance on economic indicators of human developmentInadequacy of GNP statistics
Misleading Gross National Product index
Inaccurate economic growth measures
Reliance on GDP as measure of human progress
Inappropriate application of Gross Domestic Product
Nature:
Traditional and economic accounting systems for national accounts do not place value on natural assets, both ecological and human, and do not have indicators which directly take into account environmental and social factors, such as ecosystem health, literacy rates, personal safety, infant mortality, wealth distribution, human rights, religious freedom, the free flow of information and democratic participation.
Incidence:
Because GNP is actually boosted by money spent on pollution clean-up, rehabilitation of drug addicts, control of soil erosion, and the like, the productivity of countries with remedial rather than preventative programmes for social and environmental care is actually boosted. Hidden social costs are built up, which also increase with such social ills as pollution and crime. This will then increase the need for further remedial social services and a subsequent round of deficit spending.
Broader Problems:
Governmental bias in statisticsInappropriate understanding of progressInadequate social and demographic statisticsIncompatibility of environmental and economic decision-making Narrower Problems:
Statistical understatementUndervaluation of public assetsLack of social accounting in the business communityAccountability based solely on profitDistortion of indicators of achievementInadequate evaluation of environmental costsLack of environmental accounting in businessUndervaluation of housework in national accountsMarket indicators' exclusion of human requirementsInadequate international standards of financial accounting and reportingInadequate social welfare indicatorsLack of natural resource accounting Related Problems:
Inadequacy of the domestic marketInadequate environmental indicatorsEnvironmental hazards of industrializationInternational imbalance in the quality of life Aggravates:
Inadequate dataImperfect accountingDeceptive indications of prosperityInadequate public finance statisticsIgnored social needs of developing countriesLack of full cost accounting of consumer productsSuppression of information concerning social problemsDowngrading of services with nonquantifiable long-term benefits Strategies:
Researching macroeconomic modellingConducting environmental audits Using natural resource accountingUsing natural resource accounting for biodiversity conservationCharging appropriately for waterDeveloping non-economic indicators of human developmentDeveloping economic indicators of human developmentCorrecting inaccurate economic growth measuresImproving economic accounting systemsAbstaining from natural resource accountingProducing Gross National Product index References:
Mukherjee, R: The Quality of Life: valuation in social researchPearce, David: Blueprint 3: measuring sustainable developmentPearce, David; Markandya, Anil and Barbier, Edward B: Blueprint for a Green EconomyHenderson, Hazel: Paradigms in Progress: life beyond economicsNussbaum, Martha and Sen, Amartya: The Quality of Life Subject(s):
Commerce → AccountingCommerce → Finance
Communication → Censorship
→ Systems
Economics → Economic
Fundamental Sciences → Statistics
Industry → Products
Informatics, Classification → Classification
Research, Standards → Measurement
Resources → Resources
Social Activity → Welfare
Societal Problems → Inadequacy
Societal Problems → Scarcity
Society → Social
Related UN Sustainable Development Goals:
Problem Type:
F: Fuzzy exceptional problems Date of last update
11.01.2021 – 17:01 CET