Alternative progress indicators to Gross Domestic Product (GDP) as a means towards sustainable development

Assessing existing policies or developing new policy options requires indicators showing where a community stands, where it is going and how far it is from where it wants to be. Indicators are necessary in all steps of the policy cycle: to describe the current situation/problem; to analyse the causes; to identify possible solutions and analyse, select and implement policy proposals; to monitor and evaluate the policies and to communicate the outcomes at all steps of the policy cycle. Economic performance is generally being measured through GDP (Gross Domestic Product), a variable that has also become the de facto universal metric for 'standards of living'. However, GDP does not properly account for social and environmental costs and benefits. It is also difficult to achieve sustainable decision-making aiming at sustainable progress and wellbeing if welfare is being considered from a purely financial point of view. Sustainable development can be defined as "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Therefore, in order to effectively measure 'progress, wealth and well-being', one must go beyond GDP. This requires clear and at the same time multidimensional indicators showing the links among a community's economy, environment, and society.