Green economy  |  Publications  |  31.08.2011

GDP and its limits as criteria of eligibility for structural funds

GDP continues to be the main determining factor when allocating structural funds within the EU. However, the concept itself, which considers the production of value in market terms only, ignores social purposes and environmental impacts of production, and puts on an equal footing “positive” and “negative” production – i.e. aimed at countering the negative effects of other production for example. Moreover, GDP only takes “merchandised” production into account at prices reflecting social balances of powers. Activities belonging to the domestic sphere are not considered, while such activities also exist within the merchant sphere (e.g. the fact of eating, whether at home or in a restaurant). 

All these flaws call into question the unchallenged use of GDP when allocating structural funds. This report, Commissioned by the Greens/EFA Group in the European Parliament, looks at complementary measures which the EU can adopt for this process. These could include the GINI coefficient, the share of households with very low employment levels or the share of those suffering from acute material deprivation. 

Ultimately what is required is a system of measurement which includes social, economic and environmental factors. This is the central theme of the Green New Deal, which asks us to question how we measure economic development and the current perspectives which we adopt when evaluating the success or failure of an economy or region. 


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