Diminishing and negative welfare returns of economic growth : an index of sustainable economic welfare (ISEW) for Thailand

Thailand has achieved remarkable levels of economic growth over the last three decades. This sustained economic growth has played a major role in reducing absolute poverty levels from nearly one third of the population in 1975 to presently less than 10%, thus increasing the welfare of many Thais. This performance ranks Thailand as one of the world's most successful economies during this period. However, an increasing number of studies have begun to find that at a certain point achieving economic growth stops improving welfare and actually begins to diminish it due to the hidden and traditionally unreported costs of associated with this growth. With one exception, these new studies have focussed on high-income countries. This study will estimate an index of sustainable economic welfare (ISEW) for a developing country, Thailand, over a 25-year period, 1975–1999. This paper concludes that even low–middle income countries are beginning to approach the point in which economic growth produces both diminishing and, at times, negative welfare returns as the costs of achieving economic growth begin to outweigh the benefits. These results are important for policy makers and highlight the importance of implementing alternative welfare enhancing interventions that must be considered in place of simply achieving economic growth. The emphasis of this paper is not on the methodology of estimating the ISEW for Thailand, but rather on the policy implications for developing countries of diminishing and negative welfare returns brought about through the achievement of economic growth.

Measuring social welfare: application of social choice theory

This paper questions conventional approaches to measuring social welfare through gross domestic product (GDP). This paper is divided into two parts. The first part adopts a systems approach to development and incorporates this into the theory of social choice. The second part operationalises this approach through the development of a cost-benefit adjusted gross domestic product (CBAGDP) social welfare function, which overcomes certain limitations of this traditional measure of development. The CBAGDP is then used to estimate welfare in Thailand. This approach is justified because of its normative values and its plausible results.

Widening development prescriptions: policy implications of an index of sustainable economic welfare (SEW) for Thailand

Over the past three decades, Thailand has recorded consistently high levels of economic growth, making it one of the most successful economies in the world during this period. However, economic growth has associated costs that can also reduce social welfare. This study will estimate an Index of Sustainable Economic Welfare (ISEW) for Thailand over a twenty-five year period, 1975–1999. This paper concludes that even low-middle income countries are beginning to approach the point at which economic growth produces both diminishing and, at times, negative welfare returns as the costs of achieving growth begin to outweigh the associated benefits. These results are important for policy makers and highlight the importance of widening policy prescriptions in order to increase social welfare. However, the policy guidelines that are suggested must be critically accepted before being adopted due to possible weaknesses of the ISEW approach.

The economics and politics of wilderness conservation in Australia

Wilderness conservation has a checkered history in Australian politics. Initially, wilderness was protected in national parks, and specific areas or legislation did not exist. In the 1960s, wilderness conservation became an important issue in Australian politics. Pressure from environmental groups and the general public created several conflicts. Several successes were scored by the joint efforts of interest groups, the public, charismatic individuals, the media, and support of governments and politicians. A number of areas were declared wilderness areas and several states now have wilderness protected through legislation. The 1990s have not been as good as the previous decades for wilderness. Large forest areas are still being cleared and bias toward consumptive use of forest by governments is emerging. Clearly, wilderness protection in Australia is intensely political. It is important that interest groups maintain pressure to protect future wilderness. Efforts to obtain national legislation for wilderness and to couch wilderness in terms of other aspects such as biodiversity and ecosystems values may prove necessary.

Employer requirements of economics graduates and the implications for undergraduate economics programs

In recent years there has been considerable debate about the general decline in the number of students undertaking bachelor degrees and majors in economics. The discussion has stemmed mainly from a supply-side perspective of the economics education market. The goal of this paper is to add another dimension to the debate and report the results of a survey of employers of economics graduates. Drawing on the extensive customer services literature it is argued that a market oriented, or demand-side analysis is also an important component in redressing low student enrolments and retention. A first step in adopting a market oriented approach is to determine the skills required of the economics graduates entering the jobs market. With the support of The Economics Society of Au~tralia, twenty-nine public and private sector employers were surveyed in 2002. The aim of the survey was to establish the demand for economics graduates with bachelor and honours degrees, the skills and knowledge required of these graduates, and the performance of such graduates. The study found that economic knowledge and skill were important to employers. However, the skills rated most important by employers were the more general or 'generic' skills of clear writing, data analysis, interpersonal skills and a practical problem-solving orientation. While graduates generally performed satisfactorily in relation to the economic skills required by employers, this was not the case for generic skills. The result of the survey findings have some significant implications for the content and teaching of undergraduate economics programs. This paper outlines these implications and also discusses areas for future research It is argued that such research should aim to utilize both the demand and supplyside perspectives with the development of more precise definitions and measurement of the economic skills required by the various stakeholders in the economics education market.

Securing participation : experiments in a one-day introduction to economics

Classroom experiments and exercises served as a one-day introduction to economics for students who felt insecure about taking first-year business classes. The first experiment addresses demand in isolation, while the second addresses supply. Supply, demand and equilibrium are integrated in a pit market in which all students have equal expected profits. A monopoly pricing exercise addresses market failure. Exercises use many incremental questions to reveal principles of microeconomics. Evaluations show that at the end of the program, students were familiar with economic results and concepts, and were more comfortable with talking economics.

Institutional economics approach to irrigation management with special reference to developing countries

Neoclassical economics has failed to address irrigation management issues in developing countries successfully. Institutions are at the heart some of these failures. Many academics in various disciplines in the social sciences now emphasize the need to pay attention to the multitude of informal institutions such as rotational irrigation in developing countries and not to treat them as irrelevant for development. Water user associations have been initiated for irrigation management in many countries. These have shown much promise although many problems still constrain the full adoption of this institutional mode. Water pricing is still at its infancy and significant problems remain in the use of the market system for improved management of irrigation water.

Tourism, trade and domestic welfare

Tourism has been regarded as a major source of economic growth and a source of foreign exchange. It has also been viewed as an activity that imposes costs on the host country. Such costs include increased pollution, congestion and despoliation of fragile environments, and intra-generational inequity aggravation. One aspect that has been ignored is the general equilibrium effects of tourism on other sectors in the economy. This paper presents a model that captures the interdependence between tourism and the rest of the economy, in particular agriculture and manufacturing. An important result obtained is that the tourist boom may 'immiserize' the residents.

Can we obtain realistic parameter estimates for the 'protection for sale' model?

In the Grossman and Helpman (1994) model of endogenous trade protection, sectoral lobbies try to influence an incumbent government that maximizes a weighted sum of political contributions and aggregate welfare. We empirically investigate this model using U.S. and Turkish data. Our specification is more tightly tied to theory than those in existing studies. Additionally, we assume all specific‐factor owners to be organized into different lobbies. These changes, validated by hypothesis tests, yield more realistic parameter estimates of the government's concern for aggregate welfare and of the fraction of population organized into lobbies.

Illegal migrants, tourism and welfare : a trade theoretic approach

Many countries receive illegal migrants but are reluctant to accept them due to possible negative externalities. We provide a rationale for not policing illegal migration by linking it to the tourism industry. By paying illegal migrants less than local workers, the relative price of the non-traded goods is shown to be lower than it would be in the absence of such workers. An expansion in tourist trade, under certain intensity conditions, necessarily raises resident welfare and employment. This tourist boom necessarily lowers the welfare of the illegal migrants. It is established that an increase in tourism increases the supply of illegal migrants.