Human Development Index Looking Up!

To add more weight to what I was saying yesterday, this wikipedia list of countries sorted by human development index shows that the vast majority of countries seem to be seeing a rise in standard of living.

Look at all those green arrows in the HDI column! While the Rank column has quite a few red arrows, what’s most important here is that countries are developing compared to their past (while outpacing their peers is more of an afterthought in my book).

The index is calculated using life expectancy, education (by literacy rates and the gross enrollment ratio) and the GDP per capita at purchasing power parity (PPP).

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Things Are Getting Better… AND Worse!

Something crazy happened today: for the first time – perhaps ever – I did research not for a grade, or to impress a teacher, but for the benefit of myself and this blog! This is kind of a big milestone for me, and as you can see from previous posts, it’s been several months coming. I’m really hoping I keep this momentum and enthusiasm rolling, or at least am able to look back on this and recognize that work is most satisfying when it’s done for myself. Anyway, enough about me and my struggles – this blog is about bigger things.

This post will begin a series of posts summarizing my research on developing economies. Basically what I’m doing is using a comparative, quantitative approach to see how livelihoods are changing around the world over time.

The cool thing about macroeconomics is that with just a few easy numbers, you can get a good snapshot of what is going on within a given country. The measures I use most frequently to analyze development are: GDP per capita, and the Gini coefficient. If you’re not familiar with these metrics, go ahead and click on them to read about them on wikipedia.

Basically, GDP per capita measures the average income or wealth of a given country. It takes the Gross Domestic Product (or total national income) and divides it by the total population of a country. If the GDP per capita of the USA is 40,000 dollars, then that’s how much everyone in the country would earn if we all got paid the same amount for our jobs. This of course isn’t realistic, but it gives us a good idea of the “average” income and standard of living. To factor in the differences in income, we can use the Gini coefficient. The Gini coefficient is a number from 0 to 100 that represents everything from perfect income equality to perfect inequality. In the above example of everyone earning the same in the US, the Gini would be 0. If a country had a gini of 100, then one person would control all the income and wealth (think rich estate owner and his impoverished slaves).

So, what do the GDP per capita and Gini coefficients look like? How are they changing over time? I’m currently starting to compile a database, which I hope to eventually use to map and chart development of every country. The basis for this database comes from an old paper I did in college, a little over two years ago in my introductory Econometrics class. Anyway, I decided to compare that data – which included GDP/capita and Gini coefficients for 33 countries – with current data, to see how things were progressing in those countries. The countries were taken from every continent to form a cross-section of the world.

The results are in. Of the 33 countries sampled:

  • Most desirable outcome: 16 countries, or roughly half, saw an increase in both income AND equality. That means a growing share of people are seeing real wage growth! The upper class probably saw the most benefit, but the middle and lower class were also likely made better off in these places. This makes me happy.
  • Desirable outcome: 22 countries, or about 2/3, at least saw an increase in income.
  • Undesirable outcome: 9 countries, or only 1/4, actually saw their real income fall.
  • Least desirable outcome: And last: only 5 countries, or only 15% of the sample, saw a decrease in income AND a rise in income inequality.

These results kind of surprised me. In general, things are getting better! A lot of countries–16–are not only getting richer, but making sure that the riches are more evenly distributed. Most of the countries in this category were modern, developed economies in places where capitalism and democracy have been long-established.

On the other hand, for some 5 countries of the sample, things are clearly getting worse. Most of the countries that saw falling income and rising inequality were nations that are already pretty troubled, such as in Africa and Southeast Asia. Floundering economic growth, and rises in the cost of food and energy are likely increasing poverty for a large portion of the populations of these countries.

I’ll get to posting more specific data–including eventually my databases–at some point. Until then, thanks for reading. I’d love to hear your thoughts on how things are perhaps getting better AND worse, either in the outside world or in your local community. Feel free to drop a comment.

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No One Said It Would Be Easy

I had an important epiphany last week: I’m going to go to Grad School to study Development Economics. I’m emotionally invested enough that I want to make a career out of it. Somehow, I don’t think that my current Bachelor’s will cut it, especially with my limited network and contacts. Hopefully, grad school will give me an edge with more research/knowledge, and more contact with people who are influential in this stuff.

As far as this blog is concerned, it may be on the back-burner for a while. I know that’s not particularly upsetting, since I don’t have a readership per se, but it’s kind of hard for me to accept.

My goals for the next year are:

1) Get into the best grad program I can for Economic Development by Fall 2009

2) Earn money, be financially independent, and invest for my future via IRA & 401k (compound interest now not later…)

3) Look for a mate whose company I enjoy and who will support and challenge me in my goals

That’s not to say I won’t be updating this blog or have anything to add about developing economies, but looking back over the last 2 weeks, those other goals are going to come first. Here’s to achieving your dreams!

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Introductions

My name is Neil.

In addition to inspiring, educating, and holding accountable, I think I started this blog as a way to reconnect to my writing and to the issues surrounding the third world. In college, I frequently got paid (in grades) to write about the economic situations of developing countries. Now that I’m graduated and trying to start a career, there’s not as much opportunity or incentive to keep up with everything that used to matter so much to me. I’m hoping that this blog will change all that.

In between high school and college, I had the opportunity to spend 1 year in Bolivia with AFS Exchange Programs. I was a volunteer with Habitat For Humanity, and lived with a Bolivian host family. Living alongside poverty and NGOs dedicated to poverty relief certainly had a profound impact on me. I now feel that my life could be used to do so much more than simply making money and being concerned only with my self and my immediate family.

Trouble is, it takes a lot of hard work and dedication to get anything done. Often, it seems like 90% of the responsibility and opportunity for development lies with the natives of a country, with outsiders lacking the insight or credibility to bring about change. As if that weren’t enough, living in the developed world has a lulling effect on even the most dedicated people – poverty, like anything else, is very much “out of sight, out of mind”. So the challenges are many…  but my experience has taught me that with great challenge comes great reward.

I’m by no means an expert in this field. However, I know some folks who are, and I know plenty of places to get interesting facts and news about development. My task, then: distill lots of information from credible sources, and present it to you in a clear and concise manner.

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Welcome to The Third World Monitor!

Hello, and welcome to The Third World Monitor. My name is Neil and I’ll be your host.

My intentions for this blog are as follows:

  1. To educate myself and others about what’s happening in developing countries
  2. To hold accountable governments and other actors to the Millennium Development Goals
  3. To inspire courage, collaboration, and dedication towards the problems of developing countries by focusing on the solutions and showcasing stories of success

…I think I’ll let all that sink in for a bit. This blog is definitely in its infancy–a few days ago, it was just an idea–and likely will be for a while. I have a lot of great ideas for things I’d like to see here, but it will take a lot of time and effort to implement them all.

My short term goal is – invest myself in this blog a little bit every day, and make it something I can be proud of.

Coming up next: who I am and why I care.

Feel free to drop a comment and introduce yourself!

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