Search results

By using the World Bank's new poverty data that are based on the most recent International Comparison Program report, this research aims to revisit the response of poverty rate to increase in real gross domestic product (GDP) per capita.

The response is summarized in terms of elasticity of poverty with respect to real GDP per capita, which is the ratio of annual percentage fall in poverty rate to annual percentage increase in real GDP per capita. The main calculations are done for the entire group of less‐developed countries (LDCs), poverty‐dense South Asia region, and India, which probably has the highest poverty rate. The periods studied are 1981‐1990, 1990‐1999, and 1999‐2005. The calculations are done for four different poverty measures.

Five major points are noted. First, the elasticities generally show a declining tendency over the period, indicating that poverty‐reducing impact of income growth has been weakening. Second, the elasticities show huge differences across the poverty lines, and generally decline with higher poverty lines. Third, while global elasticities for $1.00 poverty line bear some resemblance to those reported or used by many scholars, elasticities for $2.00 and 2.50 poverty rates are dramatically lower, and reinforce the view that many influential estimates show the effect of income growth on poverty to be much higher than the data indicate. Fourth, elasticities for poverty‐dense South Asia are again seen to be much lower than those for the entire LDC group. Fifth, for India, where $2.00 and 2.50 poverty rates are higher than even in Sub‐Saharan Africa, the elasticities are extremely low and have been declining despite an acceleration in income growth. The overall implication seems to be that income growth has generally been less pro‐poor during the globalization era of the 1990s and the 2000s than during the 1980s. In particular, income growth in India seems to have had an extremely small impact on poverty, and that impact, notably for $1.00 and 1.25 poverty lines, has been declining.

First, although there is a vast literature on growth elasticities of poverty, this seems to be the first study that uses World Bank's new poverty data to judge the impact of income growth on poverty. Second, this is the only study that directly estimates and compares elasticities for the four poverty lines of $1.00, 1.25, 2.00, and 2.50, and shows large differences in the elasticities for different poverty lines. Third, this is probably the only work that compares elasticities for the 1980s, 1990s, and the 2000s. Fourth, although some indication of very low elasticities for South Asia and India does exist in a recent study, $2.50 elasticities reported in the present work for India, and even South Asia, should constitute an eye‐opener for scholars, policy‐makers, and international organizations in regard to the potential role of income growth in poverty reduction. Fifth, the observed decline in most elasticities during the 1990s and 2000s, as compared with the 1980s, despite higher income levels and growth rates, may shed light on the likely role of globalization in reducing poverty.

The purpose of this paper is to extend the existing literature on cross‐country disparities by providing measures of cross‐country inequality in human development index (HDI) and real income per capita over the 30‐year period 1975‐2004.

A well‐recommended inequality index is applied to the data.

Ten points are noted: first, HDI inequality declined over the period; second, the pace of decline slowed somewhat since 1990; third, magnitude of HDI inequality has been quite small; fourth, inequality in gross domestic product per capita also shows a declining pattern over the period; fifth, there is very high correlation between HDI and per capita income; sixth, despite the high correlation, magnitudes of inequalities in the two variables are dramatically different; seventh, therefore, even very high correlation may not be interpreted as implying similar inequalities in the variables; eighth, cross‐country inequalities in various regions show huge differences; ninth, negative trend in inequalities over the period shows high statistical significance; and tenth, t‐tests for equality of means do not pick up well even huge differences in regional inequalities, suggesting need for considerable caution in the use of such tests.

The primary scientific significance of the work lies in providing the measures of cross‐country inequality in HDI over the 30‐year period; showing dramatically different inequalities in HDI and income despite very high correlation between the two variables; and indicating cross‐country inequalities in eight different regional groups and also across regions.

The purpose of this paper is to provide a comparison of data on real (purchasing‐power‐parity – PPP) gross domestic product (GDP) per capita recently released by International Comparison Program (ICP) with the numbers reported in World Development Indicators (WDI) and Penn World Tables (PWT) which have been used by hundreds, perhaps thousands, of researchers over many years.

A descriptive comparison is first provided by listing cases of largest absolute and percentage differences between ICP and WDI and PWT numbers. Second, well‐recommended measures of cross‐country inequality in real GDP per capita are computed, and inequality in terms of ICP data are compared with that based on WDI and PWT data.

First, there are huge differences for numerous countries between the ICP numbers and the WDI and PWT data. Second, many of these differences are much larger than the highly publicized cases of China and India. Third, since ICP numbers are more accurate, existing WDI and PWT data are noted to substantially understate intercountry income inequality. Fourth, comparison of ICP with WDI shows a pattern which is similar to that indicated by a comparison of ICP and PWT. Fifth, the huge discrepancies in data provided by highly reputed sources, and used by numerous researchers, in such a prime indicator of economic and social well‐being seem to reflect a notable phenomenon.

First, this is apparently the only attempt to provide a comparison of the new ICP data on country‐level real GDP per capita with that reported in the highly reputed and widely used WDI and PWT. Second, the enormous differences for numerous countries should suggest much caution to researchers in using the existing WDI and PWT data series. Third, the substantial understatement of intercountry income inequality by WDI and PWT data should be noteworthy. Fourth, although authors of WDI and PWT will probably identify reasons for the differences and reformulate their PPP data series, the present study may suggest need for some reflections on the context in which such large‐scale discrepancies in a variable of primary economic and social significance have existed for many years.

In the context of a much higher infant mortality rate (IMR) among Blacks than among Whites in the USA, the purpose of this paper is to compare changes in IMR in the two groups to judge whether the rates of decline are indicative of the so‐called Matthew‐effect or the inverse‐care principle, which, in contrast with the usual expectation of “diminishing marginal product,” suggests that higher level of IMR would be associated with a slower rate of IMR decline.

Changes in the IMR for each group over the period 1980‐2007 are studied. Levels and rates of decline in the two groups are compared for 1980‐1990, 1990‐2000, and 1980‐2007 for the USA. In addition, the levels and rates of decline in the two groups over these periods are also compared for each state.

Despite the much higher level of IMR among Blacks, the rates of decline in IMR over 1980‐1990, 1990‐2000, and 1980‐2007 are considerably lower for Blacks than for Whites when data for the entire USA are considered. Moreover, the same pattern is observed for a vast majority of the states in each period.

This is perhaps the only study that considers the possible operation of the inverse‐care principle relative to Black and White IMR in the USA over a fairly long period. The findings suggest several useful points. First, the pattern is consistent with the Matthew‐effect or the inverse‐care principle, and is not supportive of the usual expectation of “diminishing marginal product” in healthcare improvements. Second, the observed pattern seems to reflect poorer access of Blacks to prenatal, maternal, and infant healthcare. Third, it appears likely that, as suggested by Hart and indicated by recent research on increasing Black‐White IMR disparity, the pattern reflects a high degree of reliance on the market forces in healthcare provision and innovation, particularly relative to infant mortality. Fourth, in that context, greater role of the public sector in healthcare, particularly relative to IMR, might be given serious consideration. Fifth, given the observed pattern, the goal of eliminating racial disparities in IMR is unlikely to be met for a long time. Sixth, the relatively low‐international ranking of the USA in IMR, which has been declining, might not improve for quite some time.

The purpose of this research is to study the relation between “restrictiveness” of a country's trade policy and its socio‐economic well‐being as reflected in the indicators of human development.

A recently‐developed trade‐restrictiveness‐index (TRI), which seems superior to almost all existing indexes of trade policy or “outward orientation”, is related with infant‐mortality, child‐mortality, maternal‐mortality, access to safe water, access to basic sanitation, and secondary‐school enrollment, which are well‐known and important measures of a country's human development and are closely related to several Millennium Development Goals. In addition to a consideration of the covariation between TRI and the six human‐development measures, estimates from parsimonious regression models are studied. Sensitivity checks are conducted by considering covariations and regression estimates for another trade‐policy index and different country groups.

The evidence overwhelmingly shows that, contrary to the position shared and disseminated widely, there is no indication that a more restrictive international trade policy has a significant negative association with human development or socio‐economic well‐being. Every correlation between trade restrictiveness index and human‐development measures is close to zero. Almost every regression coefficient of trade‐restrictiveness‐index lacks statistical significance at any meaningful level, and a consistent pattern is noted across two measures of trade policy and different country groups.

The evidence suggests much caution in the articulation and dissemination of the widely‐shared view that a more restrictive trade policy is detrimental to a country's socio‐economic well‐being. In particular, it implies that international organizations and developed‐country governments may not force developing‐country governments to adopt more “outward‐oriented” trade policies, but may let them choose the trade‐policy stance they find appropriate for their country. The estimates also reinforce the view that great care be exercised by scholars in the choice of trade‐openness measures for studying the relation between trade policy and economic well‐being.

In the vast literature on the nexus between trade policy and economic well‐being, this is probably the only study that relates six important measures of human development with what seems to be the best available index of restrictiveness of a country's trade policy. Therefore, the research, which is based on a fairly large cross‐country sample, may be deemed as highly significant on a topic of much scientific and policy relevance.

The purpose of this paper is to study the cross‐country relation between initial levels of infant‐, child‐ and maternal‐mortality and their rates of decline so as to see whether the so‐called Matthew effect or the inverse‐care principle operates relative to these three important health indicators.

Data on the three variables for a large number of countries covering several periods between 1950 and 2007 are considered. Signs and significance of correlations between initial levels and the rates of decline over the period, and of coefficients of initial levels in regressions of rates of decline on the initial level, are studied.

First, in a broad global context, higher initial levels of mortality are associated with significantly lower rates of decline in each of the three indicators for every period, thus providing strong support to the operation of the inverse‐care principle and the Matthew effect. Second, the high‐income countries (and transition economies) deviate from the global pattern. Third, following Hart's suggestion, the parametric contrast between the high income and the developing groups may be interpreted as indicative of stronger government intervention in the healthcare sector in high‐income countries. Fourth, the contrast may thus indicate the desirability of greater government intervention in provision of healthcare in developing countries. Fifth, operation of the inverse‐care principle and the Matthew effect is observed even in the absence of high‐HIV prevalence. Sixth, the observed negative covariation between initial mortality and its rate of decline implies cross‐country divergence in these core indicators of health.

First, this is the only study to investigate the operation of the inverse‐care principle relative to infant mortality for such a large number of countries and such a long period. Second, it is also the only study to extend the investigation to child‐mortality and maternal‐mortality, which are heavily emphasized in the millennium development goals. Third, the patterns are studied not only merely for the entire set of countries, but also for several subgroups. Fourth, the observed parametric contrasts are interpreted as possibly reflecting the importance of government intervention in the healthcare sector in mitigating the operation of the inverse‐care phenomenon. Fifth, an effort is made to factor out the role of HIV so as to show that the pattern is not significantly altered by high prevalence of HIV in poor countries. Sixth, the implied cross‐country divergence in these important health variables is suggestive of the need for caution in interpreting the conclusions stated by some scholars about convergence in several quality‐of‐life indicators. Last, contrary to what some scholars have suggested, not merely does it not seem to be the case that the inverse‐care proposition relative to infant mortality is observed only in exceptional cases, but the reported evidence suggests that the proposition holds globally over long periods even for child‐ and maternal‐mortality.

One of the striking features of our historical era is the degree of global inequality. In some nations the average person lives on less than $200 per year. In other nations the average income is 100 times larger. Though adjusting for purchasing power parity narrows the gap by about 40 percent (Ram 1979), it is quite evident that the world's $23 trillion annual output is unequally distributed in the extreme.

Free trade reform promotes and consolidates businesses’ orientation to international markets. Using a sample of twenty Latin American countries, this study finds support for the hypothesis that higher revealed trade openness implies faster economic growth. However, at low output growth levels, increased revealed trade openness does not translate to faster output growth. Why more trade does not necessarily imply faster growth at all levels of revealed trade openness growth remains a conundrum. Failure to derive faster economic growth may compromise the prospects for sustainable trade reforms and thus the consolidation of new business ventures as engines for further growth.

The paper outlines and examines a social‐institutional conception of income inequality or economic distribution. The fundamental proposition of this conception is that income inequality/distribution is far from being the outcome of the operation of strictly market laws or economic forces but rather one of institutional arrangements or social structures. Of the latter particularly important have shown to be the institutional structure of the economy, particularly labour markets, as well as the degree of democracy of political systems. The results suggest transcending single‐factor economic explanations and predictions of income inequality, as implied in the Kuznets curve and its ramifications, in favour of an alternative multilevel sociological approach.