The complications of measuring green growth: Current pitfalls, further developments, and impact on cross-country longitudinal analyses

Sammanfattning: There is no consensus on how to define and measure green growth. Consequently, we can neither state if growth is actually green nor econometrically explore important questions such as what determines green growth. This thesis takes a three-step approach to move one step closer to a unifying longitudinal cross-country measure of green growth. It analyzes how green growth has been quantitatively measured and how the choice of measure affects econometric explorations on determinants of green growth. Using these insights, the study asks how a measure of green growth is to be designed. The analysis finds three overarching approaches to measuring green growth (single-indicators, data envelopment analyses, and composite indexes) and from 30 articles a total of 29 different measures are identified. Due to the multidimensionality of the concept, it is found that composite index measures are suitable, but sustainability should be incorporated into the normalization and compensatory aggregation should be avoided. Using 27 indicators from the social, economic, and environmental dimensions a green growth measure is computed for 72 countries in 1990-2019. Fixed effect regressions indicate that changing green growth measure impacts analysis results. Oppositely to results in other analyses (using other green growth measures) institutional quality is found strongly related to the refined green growth measure. Determinants of green growth are furthermore indicated differing between higher-, middle-, and lower-income countries. This concludes that a lack of agreed green growth measure hinders advancements within the literature field.