Recoupling Economic and Social Prosperity

48 Pages Posted: 4 Mar 2020

See all articles by Katharina Lima de Miranda

Katharina Lima de Miranda

Kiel Institute for the World Economy

Dennis Snower

Global Solutions Initiative Foundation GmbH

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Date Written: 2020

Abstract

This paper explores a new theoretical and empirical approach to the assessment of human well-being, relevant to current challenges of social fragmentation in the presence of globalization and technological advance. We present two indexes of well-being—solidarity (S) and agency (A)—to be considered alongside the standard indexes of material gain (G) and environmental sustainability (E). The four indexes—SAGE—form a balanced dashboard for evaluating well-being. The solidarity index covers the needs of humans as social creatures, living in societies that generate a sense of social belonging. The agency index involves people's need to influence their fate through their own efforts. While "economic prosperity" (material gain) is conventionally measured through GDP per capita, "social prosperity" can be measured through our solidarity and agency indexes, alongside environmental sustainability that is measured through the Environmental Performance Index. The SAGE dashboard is meant to provide a "sage" approach to assessing well-being, since it aims to denote sagacity in the pursuit and satisfaction of fundamental human needs and purposes. Many of the prominent challenges of the twenty-first century, including the dissatisfaction of population groups who feel left behind by globalization and technological advance, may be viewed in terms of a "decoupling" of economic prosperity from social prosperity. We present a theoretical model that provides a new perspective on the welfare effects of globalization and automation. The dashboard is meant to provide an empirical basis for mobilizing action in government, business and civil society to promote a recoupling of economic and social prosperity.

Keywords: beyond GDP, inequality, empowerment, social cohesion, social inclusion, social solidarity, social sustainability, well-being

Suggested Citation

Lima de Miranda, Katharina and Snower, Dennis, Recoupling Economic and Social Prosperity (2020). CESifo Working Paper No. 8133, Available at SSRN: https://ssrn.com/abstract=3548365

Katharina Lima de Miranda (Contact Author)

Kiel Institute for the World Economy ( email )

Kiellinie 66
Kiel, Schleswig-Hosltein 24105
Germany

Dennis Snower

Global Solutions Initiative Foundation GmbH ( email )

Friedrichstraße 194 – 199
Berlin, 10117
Germany

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