Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE credits
A considerable amount of literature already exists about the limitations and alternatives to GDP as a measure of welfare: actions are already taken to go “beyond GDP” in that sense. In this thesis, another perspective is envisaged for the transition, based on a pragmatic and disaggregated approach. The aim is to assess how the uses that people draw out of GDP can be replaced.
This analyse is based on a broad variety of literature, centred on the case of Europe. It also conveys the view that arose from international conferences as well as interviews with national accountants and creators of alternatives who have been met within the project “Indicators” at The Shift Project, a European think-tank specialized in carbon transition.
The results show that GDP is calculated within an accounting and statistical methodology whose calculations are arbitrary. It is also structured to comply with the neoclassical model of welfare (utility) through consumption and the classical model of productivity, where only productions issued from labour and material capital are included. In this scheme, money is neutral and prices reflect a social value (“what is worth” in economic theory): labour in classical economics, utility in neoclassical economics. However, this orthodox economic design of GDP is flawed since the neoclassical model is based on unrealistic assumptions and the classical model is still incomplete. As a whole, the indicator of GDP is controversial in both its calculations and design.
Ten types of uses of GDP are then explained and classified into three categories: cultural when GDP carries common values that influence people’s actions (ex: GDP represents the wealth of the nations); operational when the GDP content is used in calculations and models by private actors to trigger automatic actions (ex: the funding and redistribution of the budget of the European Union is primarily based on GDP); political when the GDP content and values are used as a pivotal reference in decision-making at the macro level, in order to trigger actions (ex: policy-makers set public policies in order to achieve GDP growth).
Whereas the operational and political uses of GDP are rare, they rely strongly on cultural representations and are made through structural stakeholders: high-level decision-makers, from the private and the public sector. GDP is often used because of the easy availability of long-term trends based on shared methodologies as well as the cultural representation of wealth, progress and economic power that it carries.
This analysis shows that every use is made on the basis of cultural values, and that there is no indisputable use of GDP.
As a whole, this thesis shows that it is possible to go “beyond GDP use” in practice: for each of the ten uses, alternatives exist or could be set. This thesis thus sets the ground for a pragmatic and rational shift, so that GDP users can focus primarily on the outcomes (cultural values) they intend to get through GDP, and then adopt appropriate technical alternatives.
2012. , 86 p.