International Politics, GOV 207
There were over six billion
people living on this planet in 2000. The
World Bank group annually issues its World Development Indicators.
The 2001 World Development Indicators are based on 2000 data.
The World Bank divides countries into low income, middle income, and high
income economies. Table 6.26 provides the gaps in per capita gross national
Eight-five percent of the world’s population earns twenty percent of
gross world income. Fifteen percent of the rich nations’ people make eighty
percent of the gross world income. The
United States alone, with 4.7% of the population, produces 30.7% of world
national income, more than the bottom 85% of the population.
Size of the Global Economy
2001 World Bank Development
Indicators, Table 1.1
 World Bank Group, 2001 World Development Indicators. (2001) http://worldbank.org/data/wdi2001
 2001 World Development Indicators, Table 1.1. http://worldbank.org/data/wdi2001/pdfs/tab1_1.pdf
Global inequality has two dimensions:
the inequalities which exist between
countries and the inequalities within
countries. Not everyone in the
United States is rich and not everyone in a poor country is poor.
Both measures must be taken together.
Table 6.27 presents a visual on world inequality from 1989.
The proportions have not changed significantly.
If anything, inequality may have grown.
Robert Hunter Wade writes in the International Monetary Fund’s
publication Finance and Development that: “The concentration of world income in the wealthiest
quintile (fifth) of the world’s population is indeed shocking and cannot meet
any plausible test of legitimacy. The
chart shows the distribution of the world income by population quintiles.”
Distribution of World GDP, 1989
The World Bank Group has published an excellent report, entitled Poverty
Trends and Voices of the Poor , which documents the huge dimension of world
poverty. 1,174.9 million people or
23.4 percent of the total earth population lived on $1 or less per day. 2,811.7
million people or 56.1 percent of the total earth population lived on $2 or less
per day. More than half the people on earth live on less $2 per day!
That is $730 per year! And
$2 per day makes them moderately poor.
The Report states: "Poverty
is a multidimensional phenomenon, encompassing inability to satisfy basic needs,
lack of control over resources, lack of education and skills, poor health,
malnutrition, lack of shelter, poor access to water and sanitation,
vulnerability to shocks, violence and crime, lack of political freedom and
voice. . . . The numbers show little progress in reducing income poverty over
the last decade--impressive gains were made in East Asia before the crisis hit,
but have been partly reversed, and little if any progress took place
elsewhere--and a large majority of poor people said they were worse off now,
have fewer economic opportunities, and live withs greater insecurity than in the
Table 6.27 shows the figures.
Population Living on $1 and $2 Per Day
At the Millennium Summit of the United Nations in September 2000, the
international community agreed to eight "Millennium Development
Goals." These eight goals are
Eradicate extreme poverty and
Achieve universal primary
Promote gender equality and
Reduce child mortality.
Improve maternal health.
Combat HIV/AIDS malaria, and
Develop a global partnership for
each of these goals, there are are targets and indicators, which define these
goals and specify measures progress toward their realization.
The targets are to be reached by 2015.
The target for extreme poverty, for example, is to half the number of
those in extreme poverty from 1990 to 2015.
It is likely that many of these targets will not be reached on time by
the very poorest of nations unless aid is increased substantially.
Quality of Life.
The standard of living of a person or country is related to but not the
same as the quality of life.
The quality of life is hard to measure statistically because it includes
subjective elements. A very well to
do person living in Manhattan, who is afraid to walk the streets for fear of
being mugged and can’t sleep at night because of street noise may have a poor
quality of life. Anyone who is ill
will have his quality of life go down, but it does matter whether he or she can
afford the best medical treatment available.
On the other hand, a peasant in India with a modest plot of land and a
large family may be very happy with his life and enjoy a much higher quality of
life than one would expect. Poverty
does not necessarily imply despair and unhappiness, especially when most people
in that country have a low standard of living.
We must not, however, idealize the quaintness of rural life or of
poverty. Except for some religious
ascetics, like monks, hardly anyone ever chooses a life of poverty voluntarily.
And for several centuries, the rural poor have migrated to the cities
where they hoped to find a better life.
The world continues to be in a period of transition, which started with
the development of the Industrial Revolution, three hundred years ago in
England. Industrialization and
technological change have transformed the Western World and are, now, doing the
same to, what we Westerners, call the Developing World.
Whether the globalization of the world, through free trade and free
capital movements, is, indeed, the way to raise the living standards of all the
world’s people is debated. Forcing
the poor countries of the world to join the global marketplace may, perhaps only
in the short run, produce more social dislocation than it brings economic
growth. The decades of Western-oriented globalization and economic
integration may have increased global inequalities--both between countries and
within them--according to Robert Hunter Wade.
We will return to this subject later in the book in the chapters on
economics and foreign policy. For now, I would recommend that if you are interested in
world poverty, why not check out the World Bank’s Millennium Development Goals
at its PovertyNet.
 Robert Hunter Wade, “The Rising Inequality of World Income,” Finance and Development (International Monetary Fund Quarterly Magazine, December 2001, Vol. 38, Number 4), pp. 1 -2.
 The World Bank Group. Poverty Trends and Voices of the Poor, 4th Ed. (May 2001), pp. 6 - 7, Tables 1 and 2.
 Poverty Trends and Voices of the Poor, 4th Ed. (May 2001), p. 3.
 Poverty Trends and Voices of the Poor, 4th Ed. (May 2001), pp. 6 - 7, Tables 1 and 2.
 World Bank Group.
2002 World Development Indicators. World View.
Millenium Development Goals. p.
 Wade, “Rising Inequality of World Income Distribution,” pp. 5 - 6.
 World Bank Group. Poverty Net. http://www.worldbank.org/poverty/data
World Poverty is Still Increasing
Kegley and and Wittkopf write in the 8th edition of their World Politics (153-4) that: "Contrary to some predictions, globalization is not leading to income convergence; it is increasing the concentration of income and wealth among people, creating a separate class of the "ultra-rich." New estimates show that the world's two hundred richest people have a combined wealth of over $1 trillion, equal to the combined annual income of 41 percent of the world's people (2.5 billion), and that the three richest people have assets that exceed the combined GNP of all of the lest developed countries (UNDP 1999, 38)"
The material below is taken from World Bank's WEB site. See below.
Classification of economies
For operational and analytical purposes, the World Bank’s main criterion for classifying economies is gross national income (GNI) per capita. In previous editions of our publications, this term was referred to as gross national product, or GNP. (More about this change in terminology). Based on its GNI per capita, every economy is classified as low income, middle income (subdivided into lower middle and upper middle), or high income. Other analytical groups, based on geographic regions and levels of external debt, are also used.
Economies are divided
according to 2001 GNI per capita, calculated using the World Bank Atlas
method. The groups are: low
income, $745 or less; lower
middle income, $746 - $2,975; upper
middle income, $2,976 - $9,205; and high
income, $9,206 or more.
World Income Inequality
A more interesting WEB site, which has search functions, is found at: http://www.mrdowling.com. This lists the "Richest Nations and Territories in the World. " This site should be cited as follows: Dowling, Mike., "Interactive Table of World Nations," available from http://www.mrdowling.com/800nations.html; Internet; updated Friday, July 12, 2002" Dowling's figures are based on the CIA World Factbook, July 1, 2002.
The table below is based on Dowling's 2001"Nations of the World," based on the CIA World Factbook, July 1, 2001. (http://www.mrdowling.com/800gdp2001.html). The actual data used are from 1999. The chart is illustrative of the huge differences in per person gross domestic product in different countries.
Per Capita Gross Domestic Product of Selected Countries
Income Inequalities Within the United States
Money Income in the United States: 2000, p. 21. Table A-2 “Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households: 1967 to 2000.” http://www.census.gov/prod/2001pubs/060-231.pdf