Dynamic sustainability assessment of countries at the macro level: A principal component analysis

Monitoring progress toward sustainable development requires the identification of operational indicators that provide manageable units of information on institutional, environmental, economic and social dimensions. This paper is an attempt to develop macro sustainability indicators of selected countries in order to track sustainability in a dynamic manner. Therefore, as a first step, sustainability pillar variables for 131 countries were defined and derived for the period 2000-2007. Three different methods, i.e., standardization, min-max and cyclical techniques, were used to normalize data and finally a principal component analysis (PCA) was applied for weighting selected variables. In the last step, countries were ranked based on their principal components (PCs) and spatially aggregated sustainability was tracked in four dimensions. The paper finds that while progress was observed for the institutional, economic and social dimensions, the environmental conditions deteriorated successively over the studied period. It is concluded that when institutional, environmental and economic pillars are strongly correlated, economic development cannot solely explain environmental deterioration.