Shaky Foundations and Sustainable Exploiters

Abstract

Macroeconomic sustainability indicators are often applied at the national level. This national-level focus is problematic given the importance of trade in the global economy. This article uses one measure of economic weak sustainability, Genuine Savings, to highlight three issues: (a) the national-level measure is empirically unsound because it does not provide a reliable indicator of weak sustainability for any trade-dependent nation; (b) it is normatively suspect because a nation can be labeled weakly sustainable even when its sustainability derives from the unsustainability of its trade partners; and (c) purported “sustainable” signals can encourage exploitative national policies. This article illustrates these conceptual problems, provides empirical case studies to establish their real-world relevance and importance, and discusses the implications for the indicator’s application.