Welfare accounting and the environment: Reassessing Brazilian economic growth, 1965-1993

Few countries in recent decades have experienced economic growth as rapid a s that in Brazil. The period spanning the late 1960s and mid 1970s, during which GDP growth was especially strong, is often referred to as the 'econom ic miracle'. Yet, the use of per capita GDP growth as a proxy for economic development (or social welfare improvement) can be questioned on both distr ibutional and environmental grounds. Scholars such as Ahluwalia and Chenery have noted that per capita GDP growth places greater weight on the income of richer income groups, and have proposed distribution-neutral and pro-poo r alternatives. More recently, studies by the World Resources Institute and others have questioned the environmental sustainability of GDP growth and have introduced an alternative national income accounting methodology that factors in estimated losses associated with natural resource depletion. To date, no studies have undertaken both types of revisions concurrently, crea ting a revised national welfare measure based on per capita GDP, but correc ted for both distributional bias and resource depletion. Such a measure is derived in this article and applied to the Brazilian case. The results cast doubt on the proposition that rapid economic growth in Brazil has resulted in comparable welfare gains.