Defending Development: An Evaluation of the Multidimensional Poverty Index
, World Economics, March 2017
The need to define development has witnessed many attempts to condense a country’s economic deprivation into a single figure. In order to target poor citizens, it is important to classify those who are ‘non-poor’ by a poverty statistic. Crucial steps in the creation and evaluation of a poverty index in the 1980s were the World Bank’s ‘Dollar a Day’ measure (now USD1.25 a day), the creation of the Human Development Index (HDI) in 1990 and the Inequality Adjusted HDI created in 2005 as a distribution-sensitive average of the HDI. In 2010, a fundamentally different method of measuring poverty – the Multidimensional Poverty Index (MPI) – was created, which identifies numerous deprivations at the individual and household level in education, health and living standards. Unfortunately, the MPI has many flaws, including mixing stock and flow variables, a lack of data particularly, for health and education, the absence of variables and the neglect of gender, moreover it suffers from international comparability problems.
Global Integration and World Migration
, World Economics, December 2016
This paper explores a theory of migration based upon a number of conjectures about the role of digital media. It proposes that a number of factors including rising use of the internet providing widespread access to global information and an intensified communication between regions and countries brought about, for example, by intensified trade links bring about expansion of people’s social space. This also expands the factors through which they compare their own living standards and social life with others. This expansion increases people’s stress and strengthens their inclination to resort to migration as a means of reducing this heightened stress. Other things held constant, the expansion of people’s social space intensifies their inclination to move across geographical space.
The Creation of the Asian Infrastructure and Investment Bank: America’s Loss and China’s Gain
Stuart P.M. Mackintosh
, World Economics, September 2016
The Global Financial Crisis (GFC) pulled institutions together diplomatically and economically. It clarified options and failures of the past and hastened coordinated reforms. But the GFC also starkly illuminated another geopolitical dynamic: Deals struck in extremis must be adhered to after parties leave the negotiating table. Failure to do so can cause embarrassment, recriminations, and unintended consequences with long-term implications that run counter to the original aims and objectives of U.S. policymakers and reformers. This sequence of events played out with the long holdup of agreed International Monetary Fund voice and vote reforms, and the birth of the Asian Infrastructure and Investment Bank, which hastened the rise of China while weakening the role of the Bretton Woods institutions.
Has Excessive Public Debt Slowed World Growth?
Anthony J Makin
, World Economics, December 2015
This paper contends that worldwide fiscal excess, as embodied in heightened public debt levels, is central to understanding why global growth has been sub-optimal since the transatlantic crisis. It notes that in the five years before the 2009-10 financial crisis average world economic growth was close to 5 per cent per year, but has since averaged only 3 per cent. The author states that government expenditure spiked notably more in advanced economies in response to the crisis and remains around 9 percent higher as a share of GDP in G20 advanced economies on average than in emerging economies. The paper explores recent literature which focused explicitly on the crowding out effects of fiscal stimulus in contrast to the Keynesian orthodox view. Attention is focussed on the impact of beneficial austerity on growth and also notes that additional government spending on infrastructure without regard to its productivity is risky.
The Poverty of Statistics: Military Power, Defence Expenditure and Strategic Balance
, World Economics, March 2015
Military expenditure and the number of service personnel are the two features most commonly used to compare national military power. The question remains, however, to what extent these reflect the real-world situation. This study aims to provide an answer by using economic and military data about conflicts between great powers over the last 160 years. Correlations of War data are employed to show that the relationship between pre-war military expenditure and army size on the one hand and outcomes of war on the other, is blurry to say the least. States with higher military expenditure prevailed in only six of the nine conflicts between great powers examined in this research. Only four of the nine were won by the state with the larger peacetime army. Using the case of the Franco-Prussian War, this work illustrates that even the superiority of both mentioned variables cannot ward off a crushing defeat, let alone ensure victory. A nation’s military power stems from its ability to adapt effectively to the realities of modern warfare. This is what neither high military expenditure nor sheer soldier numbers can guarantee.
Measuring Employment in Developing Countries
, World Economics, September 2014
This paper is concerned with measuring categories of employment that have an economy-wide meaning in the developing world. Employment has always had two interconnected sides, output and income, and these two dimensions of employment operate under very different conditions in advanced and developing economies. A developing economy is divided into two parts, organised and unorganised in respect of labour. A large amount of surplus labour exists in the unorganised part creating underemployment that manifests itself in a range of forms of employed labour. In this situation the headcount of the employed overestimates economy-wide employment; and the headcount of the unemployed seriously underestimates economy-wide unemployment.
Going Beyond Averages: Data, development aid and context
, World Economics, March 2013
One of the persistent, unresolved controversies of economic development is the effectiveness of development assistance – whether foreign aid contributes to economic development. This article argues that this controversy is largely an artefact of a methodology that focuses on the ‘averages’ and pays inadequate attention to the specific characteristics of individual societies. For enhancing aid effectiveness, one needs to discard the one-size-fits-all approach, and adopt a more nuanced, tailor-made strategy based on a comprehensive understanding of specific countries.
Measuring Global Poverty Right: Mission impossible?
M. G. Quibria
, World Economics, December 2005
The international community is committed to millennium development goals which postulate a vision of global development that makes eliminating poverty and sustaining development the overriding objective of global development efforts. In the hierarchy of the MDGs, the first and foremost goal is to reduce by half, between 1990–2015, the proportion of people whose income is less than a dollar a day (a widely used yardstick to measure extreme poverty). However, estimating such poverty across developing countries and globally is by no means a simple exercise nor has it yielded unambiguous results. This article provides a brief summary of the state of the art in global poverty estimates, including the problems as well as the possible solutions.
Measures of Progress and Other Tall Stories: From income to anthropometrics
& Brian Snowdon
, World Economics, June 2005
How should progress be measured? Today, economists and economic historians have available a rich array of data for a large number of countries on which to base their response to this important question. The need for alternative measures of the standard of living is particularly important for economic historians exploring the distant past where conventional estimates cannot be calculated. In this paper John Komlos and Brian Snowdon review several alternative measures of ‘progress’, both orthodox and unorthodox, including recent findings from ‘anthropometric’ history. The field of Anthropometrics blends history, economics, biology, medical science and physical anthropology and is now well established having helped to clarify ‘several questions important to economic historians’ including those related to slavery, mortality, inequality, and living standards during industrialisation. While malnutrition is the scourge of poor countries, obesity has become a major problem in many developed countries, particularly during the last quarter century. Research into the economics of obesity is now a burgeoning research area and the authors briefly review some of the major findings. Finally, Komlos and Snowdon comment on the recent literature on ‘happiness’. The achievement of a higher GDP per capita is, after all, not an end in itself, but a means to an end, that is, human happiness.
Wealth as a Criterion for Sustainable Development
& Karl-Göran Mäler
, World Economics, September 2001
In this article the authors define sustainable development as an economic
programme along which social well-being does not decline over time. It can be
shown that the requirement is equivalent to the maintenance of a comprehensive
measure of wealth, where an economy’s wealth is defined to be the social worth
of its entire array of capital assets, including natural capital. Using data published by the World Bank on the world’s poorest regions, countries which would be regarded as having performed well if judged on the basis of such indices as GNP
per head or the Human Development Index are found to have grown poorer, a few alarmingly so.