The main indicators of economic development Arthur Silve Introduction GDP and growth GDP, GNP, GNI and growth Sectoral decomp. Decomp. by expenditures Decomp. by income Determinants Proximate causes Fundamental causes Development Income Redistribution Social and political indicators The main indicators of economic development Growth, poverty, inequalities, and development Arthur Silve Agence Fran¸caise de D´ eveloppement Paris School of Economics 2013 The main indicators of economic development Arthur Silve Introduction GDP and growth GDP, GNP, GNI and growth Sectoral decomp. Decomp. by expenditures Decomp. by income Determinants Proximate causes Fundamental causes Development Income Redistribution Social and political indicators Sustainable and inclusive growth The role of public policies MACRO 1: introductory workshop to the main macroeconomic concepts countries eligibility to budget support identify the macroeconomic vulnerabilities assess the adequacy of implemented policies dialogue with the authorities – stabilization policies MACRO 2: follow-up workshop dialogue with the authorities stabilization policies (going further) development policies going further on the concepts discussed (redistribution, political economy)
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The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
The main indicators of economic
developmentGrowth, poverty, inequalities, and development
Arthur Silve
Agence Francaise de DeveloppementParis School of Economics
2013
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Sustainable and inclusive growthThe role of public policies
MACRO 1: introductory workshop to the mainmacroeconomic concepts
countries eligibility to budget support
identify the macroeconomic vulnerabilitiesassess the adequacy of implemented policies
dialogue with the authorities – stabilization policies
investment, technical progress, education,economies of scale are not determinants of growth:they ARE growth
institutions
the structure of incentivesinstitutions de jure and de factodifferent levels of exogeneity
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Course outline
1 Introduction
2 GDP and growth
3 Determinants
4 DevelopmentIncomeRedistributionSocial and political indicators
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
First measure of the economic
developmentIndicators of households income
GDP or GNP at Purchasing Power Parity
Income per capita according to the Atlas method(World Bank)
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
The trajectory of 2 exceptional countriesWorld Bank classification
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Redistribution
A full-fledged objective for policy
which takes very different forms depending onsocieties
income redistributionland reform, universal medical coverage, freeeducation, etc.focus on poverty reductionemployment and unemploymentaccess to financial services. . .
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Measures of poverty
Absolute / relative povertyShare of population under the poverty line (povertyheadcount)Poverty gap, etc.
The HDI can be interpreted as a composite povertyindex
The MDGs indicate several important dimensions ofpoverty
This philosophical tradition dates back to Perroux,Sen
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Income inequalities
Lorenz curveDeciles / quintilesGini coefficient
Source: World Bank
Source: UNDP
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Other dimensions of inequalities
Income inequalities only offer a partial view
inequalities in terms of human capital
access to administrative services
access to public infrastructures
access to education and basic health services
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Measuring inequalities
Classical indicators of inequalities and poverty
Gini index
Poverty headcount
poverty gap
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Inclusive growth
Absolute or relative “pro-poor” growth often call onredistribution mechanisms
“Inclusive” growth implies an increase inproductivity and new employment opportunities
“Sustainable” growth =⇒ largely spread accordingto sectors, and call on the idea of resilienceInclusive =⇒ equality of opportunities (access tomarkets, resources and fair regulation)
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
The challenge of inclusive growth in
mineral-rich countries
Dutch disease
Mining generates little formal employmentThe productive diversification is blocked by a lowcompetitiveness
Conflict
Rent-seeking behaviors, corruption and institutionalfailure
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Measuring social and political development
Common indicators of governance quality
Worldwide Governance Indicators (World Bank)
Global Competitiveness Index (World EconomicForum)
Doing Business (World Bank)
Common indicators of social development
Human Development Index (UNDP)
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
Human Development Index 2011
Source: PNUD. Darker = HDI is higher
The mainindicators of
economicdevelopment
Arthur Silve
Introduction
GDP and growth
GDP, GNP, GNI andgrowth
Sectoral decomp.
Decomp. byexpenditures
Decomp. by income
Determinants
Proximate causes
Fundamental causes
Development
Income
Redistribution
Social and politicalindicators
HDI and GDP/capita in PPP in Africa
Source: AS as from the World Bank and UNDP. x:HDI, y:GDP/capita in PPP