The Andean-Amazonian and Mesoamerican Bioeconomy: A new paradigm for productivity and well-being

Abstract

Traditional Total Factor Productivity (TFP) metrics often overlook biophysical limits and the depletion of natural capital. This study proposes an alternative paradigm: the Andean-Amazonian Bioeconomy (AAB), which integrates Georgescu-Roegen’s Law of Entropy and ancestral knowledge into an expanded production function. By applying the Malmquist Productivity Index and a Fixed Effects (FE) panel data model, we analyzed a dataset (1995–2024) from six Latin American countries. This approach utilizes the Human Development Index (HDI) as the primary proxy for social welfare. The methodology addresses country heterogeneity and multicollinearity, significantly enhancing the model’s explanatory power to an Adjusted R 2 of 0.695. Our findings reveal a ‘Biocultural Paradox’: where conservation, often viewed as a cost by traditional income-based metric, emerges as vital investment. Our model demonstrate that the preservation of the biocultural fund- represented here as Biocultural Savings [S]- is a positive and highly significant predictor of social well-being ( β  = 0.685, p  < 0.01), alongside a positive impact from the indigenous population index ( β  = 0.015, p  < 0.1), suggesting that cultural identity plays a foundational role in regional resilience. We conclude that achieving ‘Vivir Bien’ (Living Well) requires a shift toward indicators that prioritize the biocultural fund -the stock of ancestral knowledge and biodiversity- over mere resource flow. This study provides a scientifically rigorous framework for sustainability policies across the Global South.