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Comparing sustainable development measurement based on different priorities: sustainable development goals, economics, and human well-being—Southeast Europe case

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Abstract

Sustainability analysis practice has so far proved that measurement of the level of sustainable development (SD) is associated with a large number of methodological difficulties and limitations, related mainly to the selection of indicators, data processing and interpretation of the results. This study is based on an assumption that SD should be measured in ways that depend on the level of development of the country, i.e., it is highly recommended to develop separate sets of indicators to be used for highly developed, medium-developed and poor countries. To that end, we carried out the study on a sample of 13 Southeast European (SEE) countries, and Germany and the Russian Federation for comparison—which are at different levels of development and overall political and socio-economic ambients. The research includes analysis by three different approaches to SD, each based on different sets of indicators: a “GDP approach” which is traditional, and in which economic and GDP-based indicators hold the dominant role; a “Beyond-GDP approach” that reduces the use of economic indicators while increasing the share of social indicators and those based on natural resources; and an “SDG-based approach” that is mainly using indicators of quality of life as defined by the United Nations (UN) SDG. The analysis was performed using the method of composite indicators. Groups of 20 indicators were selected according to their suitability to each of the 3 above-described approaches. The study objective leads to examining ways for measuring development, to suggest new ones, recommend approaches to sustainability planning for the considered SEE countries and beyond, to contribute to the analysis methodology (by assessing usability and reliability of certain indicators and of linkages between them), as well as to rank the countries’ levels of SD under these approaches. Some of the main conclusions are: (a) the indicators having the highest potential impact on the level of SD were foreign direct investments, public debt, energy imports, total natural resources rents, terrestrial and marine protected areas, vulnerable employment, and the Corruption Index; (b) use of the Inclusive Wealth Index is encouraged, so it is important to advance proper methodologies for its measurement; (c) Slovenia and Hungary were the highest-ranked SEE countries under all three approaches, just under Germany; and (d) the ranking order under the SDG-based approach could be used to identify the prioritization of development effort and funding that countries should apply and receive for meeting the SDG. Recommendations for further sustainability measurement were made based on the study’s findings.

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Acknowledgements

The work of co-authors Radovanović and Filipović on this paper was for a study that is part of the projects supported by the Ministry of Science and Technological Development of Serbia for the period of 2016–2020.

Author information

Authors and Affiliations

  1. University of Pennsylvania, Philadelphia, PA, 19104-6315, USA

    Noam Lior

  2. Faculty of Security Studies, Educons University, Vojvode Putnika 87, Sremska Kamenica, 21017, Serbia

    Mirjana Radovanović

  3. Economics Institute, Kralja Milana 16, Belgrade, 11000, Serbia

    Sanja Filipović

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  1. Noam Lior
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  2. Mirjana Radovanović
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  3. Sanja Filipović
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Corresponding author

Correspondence to Noam Lior.

Additional information

Handled by Joanne Kauffman, Massachusetts Institute of Technology (retired) Alliance for Global Sustainability, France.

Appendix: definitions of the lesser-known indicators used in this study

Appendix: definitions of the lesser-known indicators used in this study

Adjusted savings: energy depletion (% of GNI, World Bank, The Changing Wealth of Nations 2011) http://siteresources.worldbank.org/ENVIRONMENT/Resources/ChangingWealthNations.pdf.

Energy depletion is the ratio of the value of the stock of energy resources-to-the remaining reserve lifetime (capped at 25 years). It covers coal, crude oil and natural gas.

Arable land [% of total land, Food and Agriculture Organization (FAO) 2014].

https://www.indexmundi.com/facts/indicators/AG.LND.ARBL.ZS.

Arable land includes land defined by the FAO as land under temporary crops (double-cropped areas are counted once), temporary meadows for mowing or for pasture, land under market or kitchen gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is excluded.

Bank capital-to-assets ratio (%, International Monetary Fund 2014).

https://www.indexmundi.com/facts/indicators/FB.BNK.CAPA.ZS.

Bank capital-to-assets ratio is the ratio of bank capital and reserves-to-total assets. Capital and reserves include funds contributed by owners, retained earnings, general and special reserves, provisions, and valuation adjustments. Capital includes tier 1 capital (paid-up shares and common stock), which is a common feature in all countries’ banking systems, and total regulatory capital, which includes several specified types of subordinated debt instruments that need not be repaid if the funds are required to maintain minimum capital levels (these comprise tier 2 and tier 3 capital). Total assets include all nonfinancial and financial assets.

Carbon dioxide emissions per capita (tonnes, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/27706.

Human-originated carbon dioxide emissions stemming from the burning of fossil fuels, gas flaring and the production of cement, divided by mid-year population. Includes carbon dioxide emitted by forest biomass through depletion of forest areas.

Consumer price index (World Bank, Development Research Group, 2015).

https://www.indexmundi.com/facts/indicators/FP.CPI.TOTL/compare?country=zm.

Consumer price index reflects changes in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used. Data are period averages.

Corruption perception index (Transparency International 2014).

https://www.transparency.org/cpi2014.

It measures the perceived levels of public sector corruption in countries.

Crime index (Federal Bureau of Investigation, USA, 2014).

https://www.numbeo.com/crime/rankings_by_country.jsp?title=2014.

The Crime Index is an annual study of crime rates and occurrences; it is an estimation of overall level of crime in a given city or a country.

Energy imports, net (% of energy use, International Energy Agency, 2014).

https://www.indexmundi.com/facts/indicators/EG.IMP.CONS.ZS.

Net energy imports are estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

Export of goods and services (% of GDP, International Monetary Fund, 2014).

https://www.indexmundi.com/facts/indicators/NE.EXP.GNFS.ZS.

The sum of exports and imports of goods and services, expressed as a percentage of gross domestic product (GDP). It is a basic indicator of openness to foreign trade and economic integration and indicates the dependence of domestic producers on foreign demand (exports) and of domestic consumers and producers on foreign supply (imports), relative to the country’s economic size (GDP).

Foreign direct investment, net inflows (% of GDP, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/53506.

Sum of equity capital, reinvestment of earnings, other long-term capital and short-term capital, expressed as a percentage of GDP.

Forest area (% of total area, United Nations Development Program 2014).

https://www.indexmundi.com/facts/indicators/AG.LND.FRST.ZS.

Land spanning more than 0.5 hectare with trees taller than 5 m and a canopy cover of more than 10% or trees able to reach these thresholds in situ. Excludes land predominantly under agricultural or urban land use, tree stands in agricultural production systems (for example, in fruit plantations and agroforestry systems) and trees in urban parks and gardens. Areas under reforestation that have not yet reached but are expected to reach a canopy cover of 10% and a tree height of 5 m are included, as are temporarily unstacked areas resulting from human intervention or natural causes that are expected to regenerate.

GDP growth (annual%, World Bank, 2015).

https://www.indexmundi.com/facts/indicators/NY.GDP.MKTP.KD.ZG.

The GDP growth rate measures how fast the economy is growing. It does this by comparing one quarter of the country’s GDP to the previous quarter.

Gender inequality index (United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/68606.

A composite measure reflecting inequality in achievement between women and men in three dimensions: reproductive health, empowerment and the labour market.

GNI gross national income [GNI $ pc—(United Nations Development Program 2014)].

http://hdr.undp.org/en/indicators/141706.

Aggregate income of an economy generated by its production and its ownership of factors of production, less the incomes paid for the use of factors of production owned by the rest of the world, converted to international dollars using PPP rates, divided by midyear population.

GINI Index (World Bank, Development Research Group 2015).

https://www.indexmundi.com/facts/indicators/SI.POV.GINI.

GINI index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The GINI index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus, a GINI index of 0 represents perfect equality, while an index of 100 implies perfect inequality.

Gross domestic product per capita (United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/136706

Sum of gross value added by all resident producers in the economy plus any product taxes, minus any subsidies not included in the value of the products, expressed in international dollars using purchasing power parity rates and divided by total population of the same period.

Gross savings (% pf GDP, World Bank 2014).

https://www.indexmundi.com/facts/indicators/NY.GNS.ICTR.ZS.

Gross savings are calculated as gross national income less total consumption, plus net transfers.

Happiness Index (World Happiness Report, 2015).

http://worldhappiness.report/wp-content/uploads/sites/2/2015/04/WHR15.pdf.

The six factors composing this index are GDP per capita, healthy years of life expectancy, social support (as measured by having someone to count on in times of trouble), trust (as measured by a perceived absence of corruption in government and business), perceived freedom to make life decisions, and generosity (as measured by recent donations, adjusted for differences in income).

Inclusive Wealth Index (UNU-IHDP and UNEP, Inclusive Wealth Report 2014, Measuring progress toward sustainability 2015).

http://mgiep.unesco.org/wp-content/uploads/2014/12/IWR2014.pdf.

It measures the wealth of nations by carrying out a comprehensive analysis of a country’s productive base: it measures all of the assets from which human well-being is derived, including manufactured, human and natural capital. In this, it measures a nation’s capacity to create and maintain human well-being over time.

Improved water source [% of population with access, WHO/UNICEF Joint Monitoring Program (JMP) for Water Supply and Sanitation, 2014].

https://data.worldbank.org/indicator/SH.H2O.SAFE.ZS.

Access to improved sanitation facilities refers to the percentage of the population using improved sanitation facilities. Improved sanitation facilities are likely to ensure hygienic separation of human excreta from human contact. They include flush/pour flush (to piped sewer system, septic tank, pit latrine), ventilated improved pit (VIP) latrine, pit latrine with slab, and composting toilet.

Inequality-adjusted Human Development Index (IHDI, United Nations Development Programme 2014).

http://hdr.undp.org/en/indicators/138806.

The IHDI combines a country’s average achievements in health, education and income with how those achievements are distributed among country’s population by “discounting” each dimension’s average value according to its level of inequality. Thus, the IHDI is distribution-sensitive average level of human development. Dimensions of human development:

  1. 1.

    Long and healthy life (life expectancy at birth, life expectancy and inequality-adjusted life expectancy index)

  2. 2.

    Knowledge (mean years of schooling/educated years of schooling, years of schooling and inequality-adjusted education index)

  3. 3.

    A decent standard of living [GNI, PPP ($), income/consumption and inequality-adjusted income index]

Infant mortality rate (in 1000, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/57206.

Probability of dying between birth and exactly age 1, expressed per 1000 live births.

Inflation rate (%, International Monetary Fund, 2015).

https://www.indexmundi.com/facts/indicators/FP.CPI.TOTL.ZG.

Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly.

Industrial growth (annual %, World Bank, 2015).

https://data.worldbank.org/indicator/NV.IND.TOTL.KD.ZG.

The Industrial growth rate measures how fast the industry is growing. It does this by comparing one quarter of the country’s industrial performance to the previous quarter.

Internet users (% of population, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/43606.

People with access to the worldwide network.

Old age pension recipients (% of statutory pension age population, European system of integrated social protection statistics, 2014).

http://hdr.undp.org/en/indicators/123806.

Periodic payments intended to: (1) maintain the income of the beneficiary after retirement from paid employment at the legal or standard age; or (2) support the income of elderly persons (excluding where payments are made for a limited period only).

Primary energy supply, fossil fuels (% of total, International Energy Agency, 2014).

https://www.iea.org/countries/.

Total primary energy supply (TPES) is a term used to indicate the sum of production and imports subtracting exports and storage changes of fossil fuels.

Private capital flows (% of GDP, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/53506.

Net foreign direct investment and portfolio investment, expressed as a percentage of GDP.

Public debt (% pf GDP, International Monetary Fund, Government Finance Statistics Yearbook and data files, and World Bank and OECD GDP estimates, 2014).

https://data.worldbank.org/indicator/GC.DOD.TOTL.GD.ZS?view=chart.

The total of all bonds and other debt owed by a government. Most of the time, the national debt comes from bonds. The public debt is defined as how much a country owes to lenders outside of itself. These can include individuals, businesses and even other governments.

Public expenditure on education (% of GDP, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/149206.

Current, capital and transfer spending on education, expressed as a percentage of GDP.

Public health expenditure (% of GDP, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/53906

Current and capital spending on health from government (central and local) budgets, external borrowing and grants (including donations from international agencies and nongovernmental organizations) and social (or compulsory) health insurance funds, expressed as a percentage of GDP.

Remittances, inflows (% of GDP, United Nations Development Programme 2014).

http://hdr.undp.org/en/indicators/52606.

Earnings and material resources transferred by international migrants or refugees to recipients in their country of origin or countries in which the migrant formerly resided.

Social Progress Index (SPI, Social Progress Imperative (Porter et al. 2016).

http://13i8vn49fibl3go3i12f59gh.wpengine.netdna-cdn.com/wp-content/uploads/2016/06/SPI-2016-Main-Report.pdf.

The SPI measures the well-being of a society by observing social and environmental outcomes directly rather than the economic factors:

  • Basic human needs: nutrition and basic human care, water and sanitation, shelter and personal safety

  • Foundations of well-being: access to basic knowledge, health and wellness and environmental quality.

  • Opportunity: personal rights, personal freedom and choice, tolerance and inclusion and access to advanced education.

Fifty-four indicators in the areas of basic human needs, foundations of well-being and opportunity to progress show the relative performance of nations.

Total natural resources rents (% of GDP, The Changing Wealth of Nations: Measuring Sustainable Development in the New Millennium, World Bank 2011).

https://www.indexmundi.com/facts/indicators/NY.GDP.TOTL.RT.ZS.

Total natural resources rents are the sum of oil rents, natural gas rents, coal rents (hard and soft), mineral rents and forest rents.

Total unemployment (% of labour force—United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/140606.

Percentage of the labour force population ages 15 and older that is not in paid employment or self-employed but is available for work and has taken steps to seek paid employment or self-employment.

Terrestrial and marine protected areas (% of total territorial area, United Nations Environmental Program and the World Conservation Monitoring Centre, 2013) https://www.indexmundi.com/facts/indicators/ER.PTD.TOTL.ZS.

Terrestrial protected areas are totally or partially protected areas of at least 1000 hectares that are designated by national authorities as scientific reserves with limited public access, national parks, natural monuments, nature reserves or wildlife sanctuaries, protected landscapes, and areas managed mainly for sustainable use. Marine protected areas are areas of intertidal or subtidal terrain—and overlying water and associated flora and fauna and historical and cultural features—that have been reserved by law or other effective means to protect part or all of the enclosed environment. Sites protected under local or provincial law are excluded.

Vulnerable employment (% of employed people engaged as unpaid family workers and own-account workers, United Nations Development Program 2014).

http://hdr.undp.org/en/indicators/43006.

Percentage of employed people engaged as unpaid family workers and own-account workers.

Water dependency (%, UN Food and Agricultural Organization, 2014).

http://chartsbin.com/view/1471.

Dependency ratio expresses the part of the total renewable water resources originating outside the country. This indicator may theoretically vary between 0% (the country does not receive water from neighbouring countries) and 100% (country receives all its water from outside without producing any).

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Lior, N., Radovanović, M. & Filipović, S. Comparing sustainable development measurement based on different priorities: sustainable development goals, economics, and human well-being—Southeast Europe case. Sustain Sci 13, 973–1000 (2018). https://doi.org/10.1007/s11625-018-0557-2

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