Chapter2 Development - de Janvry and Sadoulet Chapter 2 The...

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de Janvry and Sadoulet 1 Chapter 2 The State of Development-2010 September 3, 2010 We characterize the state of development in 2010 using the seven dimensions of development identified in Chapter 1. What we shall see is a great deal of unevenness in progress toward development, with successes from which to learn, and many failures from which to learn as well. 1. Income growth Well-being is first and foremost measured in terms of real income per capita. By this standard, as can be seen in Figure 1, the stunning success in GDPpc growth has been in East Asia and the Pacific, led by China, where per capita income increased by 11 times since 1965. South Asia also had a performance in excess of the OECD countries, with income increasing by 3.2 times compared to 2.7 in the OECD countries, and growth there has clearly accelerated since 2000. All other regions have had a long run income growth inferior to that of the OECD: GDPpc increased by 2.3 times in the Middle East and North Africa, 2.0 times in Latin America and the Caribbean, and only 1.2 times in Sub-Saharan Africa in more than 30 years. We thus see the emergence of a “Convergence Club” (Lucas, 1990) of regions––East Asia and the Pacific, and South Asia–– rising faster in GDPpc than the high income OECD countries and catching up, while the other regions of the world are lagging and falling further behind in per capita income. The main deficit in per capita income growth is clearly located in Sub-Saharan Africa that, consequently, deserves most attention in this respect. Clearly developing regions are split into two sub-groups on the basis of the convergence criterion. Thinking development as an homogenous phenomenon would thus be clearly wrong. Instead, heterogeneity is what prevails. Take home messages for chapter 2 1. Many middle income countries, particularly in East Asia and more recently in South Asia, have grown rapidly. However, there are still huge gaps in per capita income between high income ($28,654 per capita), middle income ($1990), and low income ($376) countries. 2. High income countries account for 16% of the world population controlling 76% of world income while low and middle income countries account for 84% of world population controlling only 24% of world income. 3. Convergence in per capita incomes is highly selective, only happening for a “convergence club”. 4. Most of world poverty and hunger is located in South Asia and Sub-Saharan Africa, and the number of poor is rising in these regions. Only China has been successful in taking more than 300 million people out of poverty in the last 25 years. 5. With selective convergence, international inequality in the distribution of income has increased across countries, but it has fallen between individuals due to the sharp increase in income among the large Chinese and Indian populations. 6. There has been rapid convergence in health and educational levels among middle and high income countries,
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Chapter2 Development - de Janvry and Sadoulet Chapter 2 The...

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