International Inequalities and General Criteria for Development AID
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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.
KeywordsCapita Income Poor Country Capita Consumption National Income Industrial Revolution
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- 1.“Enige Kwantitatieve Aspecten van het Probleem der Hulpverlening aan Onderontwikkelde Landen,” De Economist, Vol. 101, 11 (November 1953), pp. 721–749. The author obtained his doctorate at the University of Amsterdam in 1951 and was appointed Professor of Econometrics at the Nederlandsche Economische Hoogeschool at Rotterdam in 1953; the present paper is a translation of the inaugural address which he gave on taking up his chair. He was a staff member of the Central Planning Bureau at The Hague from 1952 to 1955, and in 1956 he became Director of the Econometrisch Instituut at the Hoogeschool. During the last five years he has also been a visiting professor at Chicago, Stanford and Harvard. Professor Theil is the author of two books, Linear Aggregation of Economic Relations (1954) and Economic Forecasts and Policy (1958).Google Scholar
- 2.National and Per Capita Incomes of Seventy Countries in 1949, Expressed in U.S. Dollars, Statistical Papers, Series E, No. 1, Statistical Office of the United Nations, New York, 1950.Google Scholar
- 3.National and Per Capita Incomes of Seventy Countries in 1949, Expressed in U.S. Dollars, Statistical Papers, Series E, No. 1, Statistical Office of the United Nations, New York, 1950.Google Scholar
- 10.See H. Theil: 1954, “Econometric Models and Welfare Maximization,” Weltwirtschaftliches Archiv, 72, 60–83.Google Scholar
- 11.Pp. 533–537.Google Scholar
- 14.An example of such an investigation is the Netherlands Central Bureau of Statistics study “Een statistisch onderzoek naar de veranderingen in de ongelijkheid van de inkomensverdeling” [A Statistical Examination of Changes in Inequalities of Income Distribution], Statistische en Econometrische Onderzoekingen, 1946, pp. 55–67. This study is concerned with certain developed countries and relatively short time periods.Google Scholar
- 16.See, e.g., CM. Palvia, An Econometric Model for Development Planning (Dissertation, Rotterdam, 1953), p. 81.Google Scholar
- 18.See L.D. Stamp: 1953, Our Undeveloped World, London, p. 26.Google Scholar