1 / 20

Economic Development : Overview -2-

Economic Development : Overview -2-. World Income Distribution. “ Least Livable Countries ” by HDI, 2004. “ Most Livable Countries ” by HDI, 2004. Differences in rate of income growth in countries. Income Distribution in Developing Countries -1-.

Download Presentation

Economic Development : Overview -2-

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. EconomicDevelopment: Overview -2-

  2. WorldIncomeDistribution

  3. “LeastLivableCountries” by HDI, 2004

  4. “MostLivableCountries”by HDI, 2004

  5. Differences in rate of incomegrowth in countries

  6. IncomeDistribution in DevelopingCountries -1- • Enormous wealth coexisting with great poverty within developing countries, • Poorest 40% of the population earn, on average, around 15% of overall income, whereas the richest 20% earn around half of total income, • Intra-country vs. inter-country disparities, • The poor are twice cursed: (1) living in countries that are poor on average, (2) receiving end of the high levels of inequality in those countries

  7. IncomeDistribution in DevelopingCountries -2- • Tendencyfortheshare of therichest 20% tofall as wecrossthe $8,000 p c incomethreshold, • Alsothereexists a tendencyfortheshare of richest 20% toriseearly on in incomescale, • Theshare of poorest 40% at bothextremes of theincomescales is relativelyhigh, andfallsto a minimum in themiddle • Conclusion: Inequalitymightriseandthenfall as wemovefromlowertohigherincomelevels (rememberKuznet’sinverted U hyppothesis).

  8. Shares of Poorest 40% andRichest 20% forselectedcountries

  9. EconomicDevelopmentProcess • At verylowlevels of income, averagelevels of livingareverylow, andso it is difficulttosqueezetheincomeshare of thepoorest 40% below a certain minimum. Share of therichest 20%, on theotherhandarehigh, but not as extraordinarilyhigh as in middleincomecountries, • Richestgroup in thesociety, morethanproportionatelybenefitfromdevelopmentprocess, andshare of poortendtofall (not in absoluteterms), • At higherlevels of p c income, economicgainstendto be distributedmoreequally.

  10. HumanDevelopment • GNP p c : A reliable indicator of development? • Indicators of Development: • Literacy, Access to Drinking Water, Low Rates of Infant Mortality, Life Expectancy, etc. • A high GNP p c with poor indicators of Development: HOW? • Income Inequality

  11. HumanDevelopmentIndex • Puts various socio-economşc indicators together, • Three components: (1) Life expectancy at birth: indirectly reflects infant mortality, (2) Educational attainment of the society: 2/3 weighted average of adult literacy + 1/3 weighted combination of enrollment rates in primary, secondary and tertiary education, (3) P c income, adjusted after a threshold.

  12. Turkey’s HDI 2006 andUnderlyingIndicatorsInComparisonwithSelectedCountries

  13. InternationalComparison • HDI of Industrial Countries = 0.916, • HDI of Developing Countries = 0.570, • HDI of Industrial Countries are 1.6 times higher than Developing Countries, eventhough their Real GDP p c (PPP$) is 6 times higher! => Mean Anything?? => Ranking

  14. Income P C & HumanDevelopment • GDP still acts as a fairly good proxy for most aspects of development. • Argument: Rising income levels ultimately translate into beter health, nutritional, and educational standards in a population. • Explanatory Power of p c GDP has over other basic indicators => Correlations among GDP pc and indicators of Human Development.

  15. Life Expectancy Vs. GDP p c forDevelopingCountries

  16. Averageyears of Schooling vs. GDP p c forDevelopingCountries

  17. Income p c vs. Total Fertility Rate forDevelopingCountries

  18. StructuralFeatures • Demographic Characteristics • Occupational and Production Structure • Rapid Rural – Urban Migration • International Trade

  19. DemographicCharacteristics • Poor Countries are characterised with high birth / death rates. • As development proceeds, death rates decrease, often birth rates remain high => Gap opens between birth and death rates => High population growth * Negative Population Effect vs. Positive Population Effect

More Related