Transcript Een wereldwijde infrastructuur voor economisch

Global Inequality
Jan Luiten van Zanden
UU/Groningen/Stellenbosch
Three issues
• Global Inquality & long-term trends
in world economy 1500-2010: the
GDP evidence
• Beyond GDP: OECD report
• Why: theories and speculations
The questions
• Why are some countries rich and
others poor?
• Why are some countries less
unequal than others?
• Are we measuring economic
performance ‘correctly’?
Recent trends in research
• Trying to get the ‘big picture’, and
searching for the ‘deep’ roots of
development and underdevelopment
(Engermann & Sokoloff, Acemoglu et.al.,
Nunn)
• New research on non-western world:
China, Japan, India (‘Great Divergence
debate’)
• The ‘problem’ of Africa
Recent trends in research
• From research focused on nation state to
international-comparative and ‘global’
research
• Need for large global datasets, example
Maddison estimates of GDP and
population
• To answer questions about when (did
global inequality begin to increase?) and
why?
What we need:
• Better estimates of the ‘usual’ indicators (such as
GDP)
• Alternative indicators: real wages, life
expectancy, biological standard of living,
‘agency’ (Sen)
• Datasets about proximate and ultimate causes of
growth and stagnation: human capital,
institutions, family systems, culture and religion,
knowledge production (books?), geography etc.
• How does growth affect sustainability?
• For the period 1500-2010, for the whole world
Approach CLIO INFRA
• Set of specialized hubs that produce
global datasets
• Central website at International
Institute for Social History (IISH)
• Cooperation with Gapminder and
Statplanet
• And with Data Archive DANS for
datastorage
CLIO INFRA consists of
Thematic datahubs:
• National Accounts: the Maddison project
(Groningen)
• Biological Standard of Living and Age heaping
(Tuebingen)
• Human Capital Formation (Debrecen/Utrecht)
• Demography, Gender, Labour Status (IISH)
• Prices and Wages (IISH)
• Institutions & Agency (UU)
• Sustainability (UU)
Industrial
Revolution
1086
Black Death
Golden Age
Black Death
French Occupation
Stable growth between 1348 and 1800
GDP per capita in Holland/Netherlands, England/UK, and China, 1000-2000
(dollars 1990)
100000
10000
Sung peak
1000
Qing stagnation
100
1000 1050 1100 1150 1200 1250 1300 1350 1400 1450 1500 1550 1600 1650 1700 1750 1800 1850 1900 1950 2000
Netherlands
Holland
England/UK
China
Peak Arab World
Ottoman Empire
Results
• Charting long-term trajectories of various parts of world
economy 1000-2000
• Also Middle East/Ottoman Empire, India, Japan
• Transition from Malthusian economy to ‘modern growth’:
in North Sea area in two steps: Late Middle Ages (Black
Death), ca. 1800 (Industrial Revolution)
• Rest of the world: gradual spread of Industrial Revolution
• Combination with dataset of income inequality within
countries: global inequality
2000000
The aim: various dimensions of inequality
Global Income Inequality 1820-2000
1800000
1600000
1990
2000
1980
1970
1960
1950
1929
1910
1890
1870
1850
1820
1400000
1200000
1000000
800000
600000
400000
200000
0
10
100
1000
10000
100000
GDP per capita
World income inequality
Within-country income inequality
GDP and Beyond
• OECD: Better Life Initiative:
multi-dimensional approach to wellbeing, resulting a.o. in the How’s
Life? report
• Clio Infra project, global network
of economic historians to measure
various dimensions of long-term
evolution of world economy 15002010.
Well-being and the OECD
Better policies for
better lives
Better measures
Subjective well-being
Social contact
Governance…
The How’s Life Well-being Framework
26
Measuring well-being
2
7
Aim of cooperation
• Present state-of-the-art estimates on various
dimensions of development of well-being in world
economy from 1820 to present (“GDP and
beyond”)
• Contribute to the discussion about the
broadening of the welfare concept used to
characterize socio-economic development
• Indicate relevance of going “beyond GDP”, also
in historical analysis
The importance of historical statistics
Dimensions covered in “How Was Life?” book
Dimension
Indicator(s)
Economic standard of living
GDP per capita
Inequality
Health Status
Income inequality; Real unskilled
wages
Life Expectancy; Height
Education and Skills
Educational attainment
Personal security
Homicide, Incidence of warfare
Civic Engagement and
Governance
Environmental Quality
Political institutions
Gender Inequality
Various indicators + composite
index
Composite indicator (experimental)
Overall indicator of Well-Being
SO2; CO2; Species abundance
Results
• In general very strong correlation of each indicator
with GDP per capita, though less unequally distributed
• Exceptions: low/negative correlations in Inequality,
Security, and Environmental quality domains
• Relationship between GDP per capita and other
measures of well-being changes over time
Correlation with GDP/c over
time
Changing relationship
• 19th century: early growth paradox
• Rapid industrialization and growth did not
result in increased well-being
• Early urbanization and industrialization had
strong negative externalities
• Standard of Living debates
• Changes after about 1870
Changing Relationship
• After 1950: increases in well-being become
(increasingly) autonomous
• Africa after 1970; Latin America 1980s; Japan
after 1990: slowdowns of economic growth do
not necessarily result in slowdown increase
well-being
• Different ranking of western Europe and
Offshoots
• Relevant for Europe after 2007?
1900
1950
2000
2000
W. Europe
1950
2000
1850
1900
1950
2000
W. Offshoots
1
0
1
1900
3
2
1950
−1
1850
1
0
−1
1900
0
1
2
Sub−Saharan Africa
1850
3
2000
2
1950
0
1850
CompI
2
1
0
−1
1900
−1
−1
0
1
2
South and South−East Asia
1850
MENA
−1
2000
2
1950
Latin America and Carib.
3
3
2
1
0
1900
3
1850
3
East. Europe and form. SU
−1
−1
0
1
2
3
East Asia
3
Composite variable/region
1850
1900
1950
2000
1850
1900
year
1950
2000
Composite indicator & std.
GDP/c
1950
2000
1950
2000
4
1
0
Comp. Ind.; GDP/c
−2
−2
−3
−3
1900
2
3
3
2
1
0
Comp. Ind.; GDP/c
1850
Middle East and Nor th Africa
−1
4
Latin America and Car ibbean
−1
4
3
2
1
0
−2
−3
−3
1900
1850
1900
1950
2000
1850
1900
1950
decade
Western Offshoots
decade
1950
2000
1900
decade
1950
2000
2
1
0
−2
Comp. Ind
Std. GDP/c
−3
−3
1850
−1
Comp. Ind.; GDP/c
2
1
0
−2
−1
Comp. Ind.; GDP/c
−3
1900
2000
3
3
3
2
1
0
−2
−1
Comp. Ind.; GDP/c
2
1
0
−1
−2
−3
1850
4
decade
Western Europe
4
decade
Sub−Saharan Africa
4
decade
South and South−East Asia
3
4
1850
Comp. Ind.; GDP/c
Eastern Europe and former Soviet Union
−1
Comp. Ind.; GDP/c
2
1
0
−1
−2
Comp. Ind.; GDP/c
3
4
East Asia
1850
1900
decade
1950
2000
1850
1900
decade
1950
2000
Preston-curve: GDP/c & life
expectancy
80
2000
70
1970
60
50
1910
30
40
18201870
20
Life exp. (years)
1930
0
5000
10000
15000
pcGDP
20000
25000
30000
Segmented relation per capita GDP
& combined wellbeing indicators
New results
• Changing link between GDP per capita and
Income Inequality
• 19th century: rich countries are more unequal
(have larger surplus that can be distributed)
• After 1980: poor countries are more unequal
• Rich countries went through ‘egalitarian
revolution’
• Recent increase in inequality (after 1980) more
marked in poor countries
Resulting HDI
Resulting HDI
Resulting HDI
Resulting HDI
Resulting HDI
But why?
• Explain success and failure in world
economy
• Institutions versus Geography
• Agency
Jared Diamond: Guns, Germs and Steel
• Importance geography:
• Why did Neolitihic revolution start in Middle East?
• EurAsia: easy spread crops and ideas: first cities, states,
iron technology
Daron Acemoglu en James Robinson
• Institutions: extractive versus inclusive
• Reversal of Fortune 1500-present (Peru
versus North America)
Amartya Sen
•
•
•
•
•
Development as Freedom
Capabilities approach
Agency enhances economic development
Female Agency: smart economics
Quality-Quantity switch
Institutions as explanation
• New Institutional Economics (North,
Acemoglu & Robinson) most promising
explanation of such trends
• Institutions: ‘rules of the game’ of society:
informal (customs) vs. formal (laws)
• Determine how people interact
• Related to trust
• Embedded in culture, religion
Institutions and power
• Institutions are related to power
• They determine who are powerholders and
how much power they have, and whether it
is constrained or not
• At various levels: the state, the firm, the
family
• NIE: power structures determine economic
development (Acemoglu & Robinson)
How to test these ideas
• Example: did female agency matter
• Classification family systems on basis of
antropological data
• Inheritance, monogamy/polygamy,
consensus/arranged marriage,
nuclear/extended families
• Female-friendly index Eurasia
Agency of women in historic family
systems
Gfriendly
(-0.00475,0.528]
(0.528,1.06]
(1.06,1.58]
(1.58,2.11]
(2.11,2.64]
(2.64,3.17]
(3.17,3.69]
(3.69,4.22]
(4.22,4.75]
Hypothesis Emmanuel Todd
• Original family system of hunter-gatherers was relatively
female friendly
• Rise of settled agriculture resulted in decline position
women (heavy plough)
• State formation after Neolithic Revolution reinforced this
process
• Strong position of women only in ‘marginal’ regions
EurAsia, at distance from centers Neolithic Revolution
(Middle East, Northern India, North China)
Example: marriage system
• Europe: rise of European Marriage Pattern
(EMP): marriage based on consensus
between spouses, who select their partner
themselves and set up their own household
(De Moor and Van Zanden 2010)
• China: patriarchical marriage system, where
marriage is arranged by family, and girl
moves in with household boy
Consequences
• Age of Marriage: low in China (women: 1215), high in Europe (women: 25-28)
• Son-preference in China, no gender
preferences in Europe
• Europe: more agency for women
• China: all education invested in sons (for
exams); Europe: education more balanced
between males and females
• Europe: gradual rise of overall level of human
capital; China: stagnation?
Age at marriage ca. 1900
SMAM
(17.2,20.4]
(20.4,23.6]
(23.6,26.8]
(26.8,30]
(30,33.2]
Marriage and agency
• ‘balanced’ power relations in Europe led to
high age of marriage, no son preference,
more investment in education women, and
gradual shift from quantity to quality
• Less ‘balanced’ power relations in China
resulted in high fertility for women (who
married very early)
Effects on human capital
formation
• China: highly trained civil servants, but big
gap between men and women (Qing:
40%/10%)
• China: stagnation state demand for public
service leads to stagnation in level of human
capital formation (van Leeuwen et.al. 2013)
• Europe: gender gap much smaller, women
also receive (basic) education; better
preconditions for quantity-quality shift
Results of recent work
Example 2: State Formation
• Reversal of fortune in state formation:
• China: from very strong state under Sung to
weak state during Qing (Liu Guanglin: 8% of
GDP to 2-3% of GDP)
• Europa: process of state formation resulting in
high state capabilities of 19th/20th centuries (812% of GDP in 19th century)
• Rooted in different relationships between state
and inhabitants
Fundamental problem of the state
• Agency: state is agent of population, should
work in ‘common interest’
• But may turn against citizens – has its own
logic/independence
• Why support a state (by paying taxes) which
can use its power against its own citizens?
• Required: institutions that constrain power of
the executive
• Or institutions that ensure that power state will
be used for interest of citizens
State formation in Western
Europe
• Tradition of citizenships: cooperative relationship
between citizens and state; emerged in city states of
Middle Ages
• Feudal tradition of power sharing and bargaining:
between King and his nobles; between King and
cities (in Parliaments), between state and church
• Most successful European states (England after
1688; Netherlands after 1572; France after 1789)
combine these traditions; taxation and
representation – resulting in democratization
State Formation in China
• State based on professional bureaucracy, recruited
via examination system – guarantee against using
state for own interest
• But all power in principle concentrated in emperor
• No ‘contract’ between ‘subjects’ and state;
• Dramatic changes in relationship between state and
citizens (for example early Ming – late Ming)
• Problem of legitimacy of ‘foreign’ dynasties such as
Manchus
• Qing: stagnation state, growing corruption
Conclusion
• Much work on measuring global inequality
1500-2010: GDP and beyond GDP
• Exciting theories about development paths
of regions/countries
• Western Europe: balance between agency
and institutions (freedom and rules)
• Old Centres of Neolithic Revolution: ‘too
much’ hierarchy (ergo: reversal of fortune)