Augmenting the World Bank's estimates: Ireland's genuine savings through boom and bust

Abstract

The World Bank computes estimates of Genuine Savings (GS), a leading indicator of sustainable development, for most countries. A well-established literature has called for methodological enhancement. This paper presents augmented estimates of Irish GS throughout a period of unprecedented economic expansion and decline (1990–2016). A time-series constructed predominantly from national sources includes the most comprehensive coverage of pollutants in the literature surveyed. We apply a novel method to aid the property rights designation assessment required for transboundary pollutant accounting. In sharp contrast to the World Bank's estimates, our findings suggest that a modern developed economy can exhibit signs of unsustainability. Furthermore, extended environmental damages drive these results suggesting expanded country specific GS may diverge considerably from the World Bank's estimates. We find rapid economic development and rapid declines in environmental damages can occur concurrently and on the transition away from an unsustainable path.