International Inequalities and General Criteria for Development AID

Abstract

The study of the distribution of income forms one of the most traditional branches of econometrics. In the last century, when the term ‘econometrics’ was still unknown, investigators like Pareto carefully analysed many distribution patterns; their work is of great interest even today because of the light which it throws upon the problems of social inequality of that time. However, these problems all concern relationships within single national units, and much less consideration has been given to the differences of welfare between national units. A rough idea of these differences can be obtained by looking at the distribution of per capita incomes as between different countries. Such a comparison is hardly possible before 1949, but for that year the Statistical Office of the United Nations has made estimates (expressed in U.S. dollars) of the national and per capita incomes of seventy countries which between them accounted for about 90 per cent of the world population.² This is the subject which I intend to discuss here. I will compare the distribution of per capita incomes between countries with the classical distributions of individual incomes within single countries; I shall also try to show how in principle the distribution of per capita incomes can be modified, and how an econometrician would treat such a process of modification.

This translation of the article (from Dutch) first appeared in International Economic Papers, 10 (1960), 42–63. Reprinted with the permission of MacMillan Publishing, United Kingdom.