The Index of Sustainable Economic Welfare for Pakistan

Abstract

The Index of Sustainable Economic Welfare (ISEW) proposed by Daly and Cobb in 1989 provides an in-depth and comprehensive analysis of effects of economic growth on human wellbeing as well as for the sustainability of wellbeing. In this paper, we estimated the ISEW for Pakistan and highlight those factors that affecting wellbeing negatively. Findings of the study reveal that, in long run, there is a disconnect between economic growth and human wellbeing. In case of Pakistan, key contributing factors that affects human wellbeing negatively include income inequality, deteriorating international investment position, rapid depletion of natural resources and negative environment effects of economic activities. It is recommended to develop inclusive, sustainable and people centric policies with more focus on human wellbeing instead of absolute economic growth.