National account measures and sustainability objectives: present approaches and future prospects

A dominant objective within the public policies of all SE Asian countries has been the achievement of economic growth. The issue of sustainability has serious implications for this policy objective. Pursuit of economic growth is concerned solely with the present, whilst sustainability is concerned with ensuring the current generation meets its present needs without threatening future generations' ability to do likewise. National accounts, such as gross domestic product, can measure healthy economies, but they can not measure sustainability. This paper, however, sets out a conceptual approach that describes the misalignment of national accounting measures with sustainability objectives and provides empirical evidence of how this misalignment can be partially overcome. An empirical approach is developed whereby certain adjustments to national accounts, based on normative social choice theory, are introduced to indicate how a partial measure of sustainability can be determined using national accounting aggregates as a base.