Measuring the Wealth of Nations: A review

The report argues that GDP is an insufficient measure of national well-being because it ignores the depletion of assets and favors short-term gains. It advocates for 'comprehensive wealth' measurement, which tracks five capital types: produced, financial, natural, human, and social capital. The document reviews global initiatives from organizations like the World Bank, UNEP, and OECD, noting that while human and produced capital have generally grown, natural capital is declining globally, particularly in developing countries. It concludes that comprehensive wealth accounts are essential for building resilience to climate change and achieving the UN 2030 Agenda's Sustainable Development Goals, specifically SDG 17.

• GDP is considered an inadequate proxy for long-term well-being because it focuses on short-term income and fails to account for the depreciation or depletion of the assets that underpin a nation's economy.
• Comprehensive wealth is composed of five distinct capital types: produced capital (infrastructure and machinery), financial capital (stocks and bonds), natural capital (ecosystems and minerals), human capital (skills and education), and social capital (norms, laws, and governance).
• Global trends indicate that while human and produced capital have generally increased, natural capital has declined, with the rate of depreciation being five times higher in developing countries than in high-income OECD nations.
• Natural capital is the most significant component of wealth for low-income countries, representing 47% of their portfolio in 2014, yet it is under threat from biodiversity loss, climate change, and overharvesting.
• Human capital has grown to represent approximately 59% of wealth across all countries between 1990 and 2014, though a significant gender gap persists as women account for less than 40% of measured human capital due to lower earnings.
• Comprehensive wealth measurement is identified as a critical tool for supporting the UN 2030 Agenda, particularly SDG 17, by providing the data and accountability needed to balance investments in human and produced capital without depleting natural capital.
• The report highlights that no country currently measures comprehensive wealth, despite its utility in assessing resilience to shocks such as the COVID-19 pandemic and the transition to low-carbon energy systems.

APA

Bizikova, L., Smith, R., & Zoundi, Z. (2021). Measuring the Wealth of Nations: A review. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-07/measuring-wealth-nations-review.pdf

Chicago

Bizikova, Livia, Rob Smith, and Zakaria Zoundi. Measuring the Wealth of Nations: A review. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-07/measuring-wealth-nations-review.pdf.

Wikipedia

{{cite report |last1=Bizikova |first1=Livia |last2=Smith |first2=Rob |last3=Zoundi |first3=Zakaria |title=Measuring the Wealth of Nations: A review |publisher=International Institute for Sustainable Development |date=July 2021 |url=https://www.iisd.org/system/files/2021-07/measuring-wealth-nations-review.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bizikova2021measuring, author = {Bizikova, Livia and Smith, Rob and Zoundi, Zakaria}, title = {{Measuring the Wealth of Nations: A review}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/system/files/2021-07/measuring-wealth-nations-review.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }