1 1. Going beyond GDP: theoretical approaches Enrico Giovannini and Tommaso Rondinella INTRODUCTION In the aftermath of the Great Depression, the government of the United States needed a strong tool to assess the effectiveness of the policies undertaken to foster economic recovery. In this context, the initial framework of the System of National Accounts pro- vided a powerful overview of the main dimensions of the economic system (production, consumption, savings, and so on) when most of the public attention was focused on the movements of the Dow-Jones index. The System, and its central indicator, the gross domestic product (GDP), was not only methodologically robust, but also supported by economic theory, the Keynesian one in particular, which guided Western societies after the crisis and the Second World War. GDP growth has thus become the main aim of socie- ties and political action, as well as a synonym of development, well-being and progress. Yet, this has not always been the case. The ultimate purpose of human activities was hap- piness already for Aristotle in the Nicomachean Ethics, as well as, for example, during the enlightenment in Jeremy Bentham’s work, and for the American Constitution. Along with the development of the paradigm of economic growth, the second half of the twentieth century also saw an uninterrupted evolution of the criticisms of this solely economic approach. These were initially concentrated on the social aspects, stressing the fact that social conditions, standard of living and quality of life needed a broader set of indicators to be evaluated. From the 1970s, the environmental aspects emerged strongly: the fact that indefinite growth in production could not be possible, given the limited planetary boundaries; as well as increasing attention to the environmental externalities produced by the economic system. More recently, consciousness about the risks posed by climate change has strengthened the consensus around the irrationality of looking only at GDP growth. This chapter aims at presenting the recent historical evolution of some of the theo- retical concepts which underpinned the debate over the need to go ‘beyond GDP’. We primarily focus on the approaches of multidimensionality and basic needs, utilitarianism and subjective well-being, and capabilities. We also present the methodological debate on aggregation, since the need to aggregate measures of the different domains of well-being is a constant issue which has never found a satisfactory answer on either the opportunity to aggregate or the best method to be used. Two sections are then dedicated specifically to the measurement of inequalities and sustainability, fundamental elements of well-being and development posing measure- ment problems which are addressed in a number of ways. In particular, the issue of sus- tainability, which originally only considered the respect of ecological boundaries, raises formidable problems when extended to social aspects. Such problems are still in need of satisfactory solutions and therefore remain among the research issues lying ahead. Further sections of the chapter are dedicated to more procedural and political issues, Enrico Giovannini and Tommaso Rondinella - 9781781953716 Downloaded from Elgar Online at 07/12/2020 05:16:15PM via free access