Evan Hillebrand University of Kentucky

Transcription

1 Evan Hillebrand University of Kentucky Rome,

2 Percent of world s people living below $1 a day absolute poverty line 120.0% 100.0% 80.0% 60.0% 40.0% Bourguignon/Morrisson Chen/Ravallion Hillebrand 20.0% 0.0% Rome,

3 Poverty and Non-Poverty Headcounts 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Millions of people below $1 a day Millions of people above $1 a day Rome,

4 Index number problem Purchasing power parity or not Household surveys or National Income Accounts Revisions to the data Rome,

5 GDP per capita in 2005, in 2005 PPP dollars old estimate new estimate China India Rome,

6 2008 World Bank Estimates of Poverty Headcounts and Poverty Ratios million 42% % Poverty Headcount (millions of people, in blue) Poverty headcount ratio in red My estimate for 2008: 1149 million, 17.2% Rome,

7 Change in Poverty Headcount, , millions of people China India Other Asia Sub Saharan Africa See appendix table 1 for country details Rome,

8 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1.0% China India Other Asia Sub Saharan Africa Rome,

9 China became more unequal. India apparently cut the share of national income going to consumption. Sub-Saharan Africa cut poverty by 74 million due to higher consumption rates and slightly more equitable distribution. World impact of growth four times the impact of Gini changes. (table 5) Rome,

10 Huge rise in income gap in absolute terms GDP per capita, 2005 PPP dollars OECD non OECD Source: Maddison, revised and extended by author Rome,

11 Bourguignon Morrisson (2002) Hillebrand (2009) Rome,

12 Huge drop in poverty ratios since 1820 Large drop in absolute poverty headcount and poverty ratios since 1981 Most early gains in OECD, later gains in China Most poverty reductions stem from economic growth Still, a huge number of very poor people World income inequality is huge Growing in absolute terms Maybe leveled off in Gini coefficient terms Rome,

13 Mostly about forecasting growth Growth = f (L, K, technology, convergence) Technology = f (R&D, incentives, trade) Convergence = f (Washington Consensus ideas) Poverty = f (economic growth, sectoral shifts, distribution shifts) Rome,

14 Strong technological change in OECD Strong catch-up growth in much of non-oecd High investment Improved governance for incentives Expanded trade and financial linkages Rising investment in human capital Better non-oecd growth than last 25 years 3.8% per capita vs. 2.8% (table 8) Rome,

15 Millions of people with consumption less than $1.25 a day % 13.3% 2.5% World China India Sub Saharan Africa (appendix table 2) Rome,

16 Yes Poverty reduced tremendously Poverty headcount at $2.50 down 2 billion people World Gini down from 68.4 to 64.8 No its distribution neutral within country. Could do scenarios with favorable distribution changes But the theory and empirics are weak on how do this Pro-poor growth needs to take into account shifts in Consumption/GDP ratios too Rome,

17 Same growth trajectory as last 25 years. No improvements in governance in lagging countries. Less favorable global economic environment. Global poverty still falls China and India Slow-growth regions worse off 2005, Markets First Africa the worst (see tables 10 and 11) Rome,

18 Millions of people below $1.25 a day % 11.7% 2005 Markets First 2050 Trend Scenario % Huge increases in poverty from 2005: Congo DR, Cote d Ivoire, Madagascar Still reducing poverty: Mozambique, Ghana, Uganda (appendix table 3) Rome,

19 Difference between OECD and non-oecd GDP per capita, in 2005 base year, PPP dollars 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Market First 2050 Rome,

20 China and India and other Asia slow down. Limits to Growth books agricultural collapse Market collapse Wallerstein or Rejection of market model Ian Bremer Rome,

21 The free-market tide has now receded. In its place has come state capitalism, a system in which the state functions as the leading economic actor and uses markets primarily for political gain. Foreign Affairs, May/June 2009, pg 41 Rome,

22 Scenarios, not forecasts, are appropriate for policy analysis. Economic history suggests market-oriented policies best for economic growth, and economic growth is best for poverty reduction. Theory and history more clear on how not to be on a high growth path than on how to get onto a high-growth path. Resource constraints and/or adverse policy choices could make even the Trend Scenario seem too optimistic. Rome,