Augusto Lopez-Claros is currently a Senior Fellow at Georgetown University’s Edmund Walsh School of Foreign Service, on leave from a leadership position with the World Bank. In his capacity as Director of the World Bank’s development economics vice-presidency (DECIG) from 2011 to 2017, Lopez-Claros has developed a broad view of development, and the need to develop metrics that will better capture human well-being. While continuing to recognize the importance of macroeconomic stability, he thinks it is vital to create conditions for “high quality growth,” that is development that reduces poverty, improves opportunity, protects the environment and safeguards the participation of men and women in all avenues of human endeavor.
As an economist, he is keenly aware that what constitutes “economic success” and its measurement has tended focus on such concepts as the gross national product. The growth of GNP/capita has traditionally been used to assess the relative merits of particular policy approaches and has tended to be perceived by the professional economic establishment as a good proxy for “success.” In practice, however, this approach is being increasingly questioned, not only because of the shortcomings in the indicator itself, but also because there is growing recognition that “well-being” is a much broader concept than earlier understood. For example, countries which engage in policies which result in the depletion of non-renewable natural resources may experience high rates of short-term economic growth, but at the expense of the environment and rights to that environment of future generations. Thus, high industrial growth—a GNP “positive,” notwithstanding the pollution and environmental degradation that often accompanies it —may lead to a false dichotomy where environmental protection is seen as a constraint on growth, rather than the means of safeguarding its sustainability. Moreover, as can be seen in several examples of “high performing” countries, high GNP growth can be accompanied by the egregious disregard for basic human and civil rights.
Lopez-Claros points to promising attempts to construct alternative measures, such as the Human Development Index, and the Index of Sustainable Economic Welfare, which have helped to broaden the definition of what constitutes “well-being.” He is convinced that the human qualities of “justice, generosity and public spirit,” referred to by Adam Smith, enable us to appreciate that poverty should not be equated only with low levels of income, but to deprivation of the capability to actively participate in the economy and life of a nation. Goals defined by expansion, acquisition, and the satisfaction of material “wants,” cannot be realistic guides to policy. What is needed, in his view, is a recognition of the fundamentally spiritual nature of the human being, that is, a vision of what people can be and then devising those local, national and international institutions, systems and laws capable of helping people develop their latent capacities. Only then will they and their respective communities recognize more fully that “economic success” goes well beyond purely material attainments.