Presentation is loading. Please wait.

Presentation is loading. Please wait.

Worlds Apart Center for Economic and Policy Research Fundación Sistema Washington, April 7 2006 1.Inequality between countries 2.Global inequality (a sketch)

Similar presentations


Presentation on theme: "Worlds Apart Center for Economic and Policy Research Fundación Sistema Washington, April 7 2006 1.Inequality between countries 2.Global inequality (a sketch)"— Presentation transcript:

1 Worlds Apart Center for Economic and Policy Research Fundación Sistema Washington, April 7 2006 1.Inequality between countries 2.Global inequality (a sketch)

2 1.Inequality between countries (Concept 1 inequality)

3 Three concepts of inequality defined Concept 1 inequality Concept 2 inequality Concept 3 (global) inequalty

4 Inequality, 1950-2000: The mother of all inequality disputes Global Inequality Concept 1 inequality Concept 2 inequality

5 Inequality between countries: Discontinuity in development trends around 1978-80 The watershed years (Bairoch) Tripling of oil prices Increase in real interest rates (from –1% to +5% in the USA and the world) Debt crisis Chinas responsibility system introduced Latin American begins its lost decade, E. Europe/USSR stagnate

6 The outcome: Middle income countries declined (Latin America, EEurope/former USSR) China and India pulled ahead Africas position deteriorated further Developed world pulled ahead World growth rate decreased by about 1 % (compared to the 1960-78 period)

7 Different way to look at world growth rates 1960-19801980-2000 Unweighted (each country counts the same) 2.90.8 Percentage negative2333 China2.78.2 India1.23.6 Population-weighted3.03.2 World (plutocratic ROG)2.61.6

8 Annual per capita growth rates 1980-2002 MeanMedianPercentage negative Old OECD1.92.017 Middle income countries 1.01.833 LLDC0.10.843

9 Assessment World income growth slowed down by 1 percentage point per capita p.a. Poor and populous countries grew much faster and average (population-weighted) growth rate even increased Countries growth record became much more diverseand systematically so…Divergence

10 Growth over 1980-2002 period as function of initial (1980) income

11 Growth rate by each decile of countries, 1960-78 and 1978-2000 Deciles formed according to initial (1960 or 1978 income level)

12 Define four worlds: First World: The West and its offshoots Take the poorest country of the First World (e.g. Portugal) Second world (the contenders): all those less than 1/3 poorer than Portugal. Third world: all those 1/3 and 2/3 of the poorest rich country. Fourth world: more than 2/3 below Portugal.

13 Four Worlds 1960

14 Four Worlds 2003

15 Four worlds in 1960 and 2003 19602003 Number of countries % of population Number of countries % of population First41262716 Second221272 Third39132937 Fourth25497246

16 The key borders today First to fourth world: Greece vs. Macedonia and Albania; Spain vs. Morocco (25km); Singapore vs. Indonesia First to third world: US vs. Mexico; Germany vs. Poland; Austria vs. Hungary In 1960, the only key borders were Argentina and Uruguay (first) vs. Brazil, Paraguay and Bolivia (third world), and Australia (first) vs. Indonesia (fourth)

17 Approximate % of foreign workers in labor force Ratio in per capita GDIs (in PPP terms) Greece (Albanians) 7.54 to 1 Spain (Moroccans) 12.04.5 to 1 United States (Mexicans) >10.04.3 to 1 Austria (former Yugoslavs) 10.02.7 to 1 Malaysia (Indonesians) >10.05.3 to 1

18 Parts of Africa where 2000 GDI per capita is less than in 1963 (180m people ) Poorer than during J.F. Kennedy US GDI per capita in the meantime doubled

19 2. Inequality between world citizens today

20 What is a Gini of 64-66; how big is it? TopBottomRatio In $PPP: 5%33%0.2%165-1 10%50%0.7%70-1 In US$: 5%45%0.15%300-1 10%67.5%0.45%150-1 5 top countries31,85058055-1 10 top countries 28,06666042-1

21 First order dominance (year 1998) expressed in terms of percentile of world income distribution 0 20 40 60 80 100 Y98_c 159131720 # of distribution groups France Kazak Brazil Sri Lanka India-R twoway (line Y98_c group if year==1998 & contcod=="BRA") (line Y98_c group if year==1998 & contcod=="IDN-R") (line Y98_c group if year==1998 & contcod=="FRA") (line Y98_c group if year==1998 & contcod=="LKA"), legend(off) xtitle(country ventile) ytitle(percentile of world income distribution)

22 Same income for the top, different incomes for all the others Hungary Ukraine Peru 20 40 60 80 100 percentile of world income distribution 05101520 country ventile

23 Poor and rich people and countries, 1998 People Countries PoorMiddle income RichTotal Poor3879210964185 Middle1893552277 Rich92115707913 Total41603608555375

24 Conclusion: The age of inequality? Inequalities between countries have increased Population weighted inequality between countries went down thanks to fast growth in China and India (Caveat: acc. to Maddison it is almost stable + R/U differences in China and India have global implications) Inequality among people in the world is very high (Gini between 62 and 66) but its direction of change is not clear Within-country inequalities have increased in many countries including in the largest (US, UK, China, India, Russia)

25 Book Worlds Apart: Measuring International and Global Inequality Email: bmilanovic@worldbank.orgbmilanovic@worldbank.org Website: http://econ.worldbank.org/projects/inequality


Download ppt "Worlds Apart Center for Economic and Policy Research Fundación Sistema Washington, April 7 2006 1.Inequality between countries 2.Global inequality (a sketch)"

Similar presentations


Ads by Google