DOCSLIB.ORG

STATISTICS BRIEF Alternative Measures of Well-Being

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
STATISTICS BRIEF Alternative Measures of Well-Being STATISTICS BRIEF Alternative Measures May 2006 No. 11 of Well-being By Romina Boarini, Åsa Johansson and Marco Mira d’Ercole The OECD, in common with many other organisations, has normally measured material living standards in member countries in terms of the level and growth of gross domestic product (GDP). But clearly, policy makers do not focus single-mindedly on GDP. They rather seek to enhance the overall well-being of citizens, today and in the future, taking into account other factors such as distributional concerns and environmental quality. This Statistics Brief1 reviews the various potential components of well-being, and assesses whether measures of economic growth can serve as adequate proxies for the development and level of well-being in OECD countries. In this issue “Well-being” is a complex concept. Dictionary definitions differ, but notions of prosperity, health and happiness generally figure. Well-being is not something that one can give a 2 Monetary measures precise number to. Numerical indicators relevant to measuring the different components of well-being of well-being exist, and it is plausible to argue that the general well-being of society as a whole has risen or fallen if a set of indicators move in a given direction. However, when 3 Non-monetary these different indicators move in opposite directions, it is not possible to say if well-being measures of well-being is being enhanced or reduced unless all indicators are expressed in a common metric. 6 Summary and conclusions 8 Further information Figure 1. Gross Domestic Product and Net National Income per capita, 2003 (US$ current prices and PPPs) ��� ��� ������ ������ ������ ������ ������ ������ ������ ������ ������ ������ ������ ������ � � � � � � � � � � � � � � � � �� ��� ��� �� �� �� �� �� ��� ��� ��� �� ��� ��� ��� �� �� ��� �� ��� ��� ��� �� �� ��� �� ��� �� ��� ��� Source: OECD, National Accounts of OECD Countries, 2005. 1. The background analysis is reported in R. Boarini, A. Johansson and M. Mira d’Ercole, «Alternative measures of well-being», OECD Economics Department Working Papers No. 476 and Social, Employment and Migration Working Papers No. 33, Paris, 2006. Organisation for Economic Co-operation and Development This Statistics Brief reviews different approaches to the GDP also makes no allowance for the using up of capital measurement of well-being. It first looks at monetary goods during the production process and thereby measures: these include both measures directly available overestimates the value of output that contributes to in the national accounts for the economy as a whole or well-being. An allowance for depreciation of capital for households and those that try to capture the influence can be subtracted from GDP and GNI to arrive at the of other components of well-being (such as leisure time corresponding net concepts of NDP and NNI. While all and income distribution) in money terms. It then looks at countries provide estimates of capital depreciation, it is various non-monetary measures (such as indicators of known that they are difficult to derive accurately. social conditions and environmental quality) and at surveys of self-reported happiness and life-satisfaction. Data for GDP, NDP, GNI and NNI are collected in terms of the local currency used by the country. International Monetary measures of well-being comparisons can be made by converting the data to a common currency, usually the US dollar, using either GDP and other national accounts indicators exchange rates or purchasing power parities (PPPs), but the latter are much preferred for making comparisons of Economists often assess well-being through measures of this nature.2 For the majority of countries there is little GDP per capita. Within the national account framework, difference between NNI and GDP per capita relativities, however, better measures of material living standards although there are exceptions, most notably Ireland and than GDP per capita exist, even if data availability and Luxembourg. Growth rates of the two measures are also reliability restrict the scope for cross-country and inter- similar for most countries. temporal comparisons. One such measure is national income. While GDP is a production concept, the way that Even per capita NNI is a poor approximation of the it is constructed makes it equal to the total income earned economic resources actually enjoyed by individuals and in the production process. Some of this income is paid households. A better measure is the per capita income to non-residents, while residents receive some income from all sources available to households after they have from production in other countries. GDP can be adjusted paid taxes, and how much of it they consume, including for “net income from abroad” to arrive at the concept of goods and services that they receive free of charge from gross national income, GNI, which is more relevant for the the government and non-profit institutions. For all countries well-being of residents of a country. household disposable income per person is lower than per capita GDP, and per capita household consumption levels are generally lower still. But cross-country comparisons show that there is a reasonably close correspondence between household incomes, their consumption, and GDP Figure 2. Growth of per capita Gross Domestic per capita. On the other hand, household incomes and Product and Net National Income, 1994-2003 consumption have in general risen less quickly than GDP in (Annual average growth rate) most countries in the past decade, mostly reflecting a shift towards higher company profits. As households are the ultimate owners of companies, a faster growth of business income should increase household well-being (through higher asset values) but this effect is not taken into account in national accounts measures of income flows. Accounting for other components of well-being within a monetary framework The determinants of individual and societal well-being go obviously beyond production and consumption of economic resources. As a result, several approaches have been explored to extend national account aggregates to a Source: OECD, National Accounts of OECD Countries, 2005. 2. See the March 2002 edition of the Statistics Brief Purchasing Power Parities – Measurement and Uses. 2 range of other dimensions that have value for individuals assumption that the economic needs of households rise and communities. While monetary valuation of non-market less than their size: a household comprising one couple factors requires some problematic assumptions, illustrative and two children does not need twice the income of a calculations highlight the potential importance of some of childless couple to maintain the same level of well-being. these factors.3 While the adjustment is bound to be somewhat arbitrary, assuming some “sharing” of resources within households Leisure time is clearly preferable than the alternative. Correcting per capita income data for the decline in household size that There is no doubt that for most people longer holidays and occurred in all OECD countries over the past decades shorter working hours contribute to well-being as long as implies a lower growth in «equivalised» income (i.e. income they are not accompanied by lower incomes (Beckerman, adjusted for household size) than in income per capita. 1978). Leisure in this sense is a “good”, but it is not sold on Since 1995 Mexico, the Czech Republic and Portugal are markets and therefore (as many other non-market factors) among those countries where the reduction is greatest does not enter into the national accounts. While there are (Boarini et. al 2006). no direct measures of the quantity of leisure time enjoyed by OECD citizens, there are big differences between Income distribution countries in the hours of paid work performed each year, and these differences have themselves changed over time. Incomes also vary between individuals, and OECD Workers in the United States, one of the countries with countries differ in the degree of inequality and in how the highest per capita GDP, work many hours each year, these have changed over time. It is not possible to say a surpassed only by a few other OECD countries.4 Hence priori what impact income inequality has on well-being. ascribing monetary value to leisure, however arbitrarily, If it is assumed that extra income brings smaller and adds something to well-being above and beyond the smaller increments in well-being to individuals and that value of money income in all countries. While the ranking all individuals with the same income experience the same of countries on this adjusted measure is not so very well-being, then general well-being will be highest if all different from that based on per capita GDP, the growth individuals have the same income; a corollary would be rates of these two measures differ more significantly for that any increase in income inequality with no increase several countries. In general, average annual growth rates in average income reduces well-being. But it can also be are boosted, particularly so for Denmark, France, the argued that the possibility of becoming rich is needed Netherlands and Portugal (Boarini et al., 2006). to spur effort and innovation, which benefit society as a whole, and that individuals differ in their preferences for Household size leisure as opposed to material goods. All estimates of per capita income are obtained by It is possible to adjust national account measures of summing income across all units and dividing the total household income per capita to incorporate distributional among the resident population. This ignores the pooling of concerns. One such adjustment involves weighting resources that occurs within each household and that fact average incomes in each decile of the distribution with a that these have different sizes, often containing individuals coefficient representing the degree of aversion to inequality with no independent income (e.g. children and spouses). of each society, where a higher value of this coefficient It is possible to adjust per capita income for household implies that lower weight is given to higher incomes (Kolm, size using data from household surveys.
Load more

Recommended publications
  • The Growth of the Indian Economy: 1860-1960
    THE GROWTH OF THE INDIAN ECONOMY: 1860-1960 BY KRISHANG. SAINI* The University of Texas This paper is concerned with an examination of growth trends of the Indian economy between 1860 and 1960. This examination commences with the numerous studies bearing on the more recent part of this period, from about 1900 to 1960. These studies are shown to vary greatly in coverage and comprehensiveness, and their differences and individual shortcomings are assessed. Nevertheless, these studies conclude, without exception, that the Indian economy remained virtually stationary in this period, especially in terms of negligible growth in per capita real income. In contrast to periods since 1900, the study of economic growth during the earlier period has suffered academic neglect. There are only two major studies which make an attempt to examine economic trends in this period. Both these studies are found wanting with respect to concepts and procedures. The period from 1860 to 1913 presents serious problems in any study since there is a paucity of statistics which are at all reliableand useful. The most promising approach for overcoming this deficiency is to develop better sectoral statistics rather than to rely on aggregative data even when available. In order to gain a better understanding of the growth trends of the Indian economy over this period, the author constructed indices of major economic activities. These indices demonstrate that relatively high rate of economic growth prevailed in India before 1890. Subsequent developments in the Indian economy seem to consist of minor changes in the magnitudes of economic variables rather than fundamental structural changes.
    [Show full text]
  • OECD Unemployment Rates News Release
    OECD Unemployment Rates News Release Methodological Notes New methodology in the EU Labour Force Survey from 2021 with the entry into force of the Integrated European Social Statistics (IESS) Framework Regulation, resulting in updated definitions of the labour status. Information, by country, on the status of the implementation of IESS regulation as well as on possible resulting breaks in time series can be found in a Eurostat Statistics Explained article. The OECD unemployment rates, compiled for all 38 OECD member countries, are based on definitions of the 19th Conference of Labour Statisticians (generally referred to as the ILO guidelines). Under these definitions, the unemployed are persons of working age who, in the reference period: − are without work; − are available for work; and, − have taken specific steps to find work. The uniform application of the definitions results in estimates that are more internationally comparable than those based on national definitions. For example, national unemployment data in some countries only include persons registered at government labour offices. Under the ILO definition, persons without work who are seeking employment through other means can also be classified as unemployed and registrants can be excluded if they worked or were not available for work. The unemployment rates shown here are calculated as the number of unemployed persons as a percentage of the labour force (i.e., the unemployed plus those in employment) and are seasonally adjusted. The unemployment rates for the European Union (EU) member states and their aggregates, Iceland Norway, Switzerland and Turkey are produced by the Statistical Office of the European Communities (Eurostat).
    [Show full text]
  • OECD Standardised Unemployment Rate Remained at 6
    Paris, 15th April 2021 OECD Quarterly Employment Situation th News Release: 4 Quarter 2020 OECD area employment rate rose by 1.0 percentage point in the fourth quarter of 2020, but remains below pre-pandemic level The OECD area employment rate – the share of the working-age population with jobs – rose by 1.0 percentage point in the fourth quarter of 2020, to 66.7%, remaining 1.9 percentage points below the rate observed in the first quarter of 2020. In the same period, the OECD labour force participation rate (i.e. the share of people of working-age who are either employed or unemployed) increased by 0.4 percentage point, to 71.7%, still 0.9 percentage point below its level in the first quarter of 2020. Some care is needed in interpreting the latest developments in the OECD employment rate, as a large part of the increase in the third and, to a lesser extent, fourth quarter of 2020 reflects the return to work of furloughed workers in Canada and the United States, where they are recorded as unemployed, whereas in most other countries, they are recorded as employed. Indeed, the sharp increase in the number of furloughed workers in the second quarter of 2020 made a large contribution to the fall in the employment observed in these two countries. In the euro area, the employment rate continued to increase, to 67.3% in the fourth quarter of 2020 (from 66.8% in the third quarter). However, it remained 0.7 percentage point below the rate observed in the first quarter of 2020.
    [Show full text]
  • Organisation for Economic Co-Operation and Development ______English - Or
    Organisation for Economic Co-operation and Development ___________________________________________________________________________________________ English - Or. English Sustainable Development ROUND TABLE ON SUSTAINABLE DEVELOPMENT Preparing for the World Summit: Some Information about Sustainable Development Vangelis Vitalis This document is a background paper for the Round Table on Sustainable Development, which has as its theme “Preparing for the World Summit on Sustainable Development.” The meeting will take place at OECD Headquarters, 2, rue André Pascal, 75016 Paris on 11 July 2002, starting at 09.00 am. The views expressed do not necessarily represent those of the OECD or any of its Member countries. For further information please contact Vangelis Vitalis, Chief Adviser, Round Table on Sustainable Development, OECD, 2 rue André Pascal, 75016 Paris, tel: +33 1 45 24 14 57; fax: +33 1 45 24 79 31; email: [email protected] English - Or. English 1 Sustainable Development: The Global Environment Climate Change Key International Commitments ½ Montreal Protocol (1987, amended 1990,1991 and 1992): Elimination of CFCs and halocarbons1. ½ Framework Convention on Climate Change (1992): Prevent dangerous human interventions in the global climate.2 ½ Kyoto Protocol (1997): Emission reductions by a range of industrialised countries of at least 5% below 1990 levels, by 2008-20123. (not in force) Agenda 21 (Rio 1992) ½ Protecting the Atmosphere (chapter 9): Clarifying the science; improving energy use; reducing stratospheric ozone depletion;
    [Show full text]
  • Palau Along a Path of Sustainability, While Also Ensuring That No One Is Left Behind
    0 FOREWORD I am pleased to present our first Voluntary National Review on the SDGs. This Review is yet another important benchmark in our ongoing commitment to transform Palau along a path of sustainability, while also ensuring that no one is left behind. This journey towards a sustainable future is not one for gov- ernment alone, nor a single nation, but for us all. Given the SDG’s inherent inter-linkages, we acknowledge that our challenges are also interrelated, and thus so too must be our solutions. The accelerated pace of global change we see today makes it particularly diffi- cult for small island nations, like Palau, to keep up, let alone achieve sustaina- ble development. Despite this challenge, we firmly believe that we can achieve a sustainable future for Palau. Our conviction stems from our certainty that we can confront our challenges by combining our lessons from the past with new information and modern technology and use them to guide us to stay the right course along our path to the future. Just as important, we are also confi- dent in this endeavor because we can also find solutions amongst each other. Over the past three years, Palau has systematically pursued a rigorous process of assessing our Pathways to 2030. Eight inter-sector working groups, led by government ministries, but including representatives from civil society, and semi-private organizations, have prepared this initial Voluntary National Review. The groups have selected an initial set of 95 SDG global targets and associated indicators that collectively constitute our initial National SDG Framework.
    [Show full text]
  • 34011915.Pdf
    The OECD Organisation for Economic Co-operation and Development © OECD 2008 OECD material is also available at the following OECD WORLDWIDE Internet site: www.oecd.org OECD Headquarters 2, rue André-Pascal, 75775 Paris Cedex 16 Tel.: 33 (0) 1 45 24 81 67 Fax: 33 (0) 1 45 24 19 50 E-mail: [email protected] Online Ordering: www.oecd.org/bookshop News media inquiries OECD Berlin Centre Schumannstrasse 10, D-10117 Berlin OECD Media Relations Tel.: 49 (0) 30 2888 353 Fax: 49 (0) 30 2888 3545 Tel.: 33 (0) 1 45 24 97 00 E-mail: [email protected] Fax: 33 (0) 1 45 24 80 03/94 37 Internet: www.oecd.org/deutschland e-mail: [email protected] OECD Mexico Centre Av. Presidente Mazaryk 526 Colonia: Polanco, C.P. 11560 México, D.F. Tel.: 52 55 91 38 62 33 Fax: 52 55 52 80 04 80 E-mail: [email protected] Internet: www.oecd.org/centrodemexico OECD Tokyo Centre 3rd Floor, Nippon Press Center Building 2-2-1 Uchisaiwaicho Chiyoda-ku, Tokyo 100-0011 Tel.: 81 3 5532 0021 Fax: 81 3 5532 0035 E-mail: [email protected] Internet: www.oecdtokyo.org OECD Washington Center 2001 L Street, NW, Suite 650 Washington DC 20036-4922 Tel.: 1 202 785 6323 Fax: 1 202 785 0350 E-mail: [email protected] Internet: www.oecdwash.org www.oecd.org 2 3 Contents The OECD: what is it? 7 How has it developed? 9 Who does what? 11 Fast facts 15 Organisation Chart 16 Structure of the Organisation 18 Global relations 28 The OECD and the public 29 OECD member countries 31 5 THE OECD: WHAT IS IT? The Organisation for Economic Co-operation and Development is a unique forum where the governments of 30 market democracies work together to address the economic, social and governance challenges of globalisation as well as to exploit its opportunities (www.oecd.org/about).
    [Show full text]
  • OECD Handbook on Economic Globalisation Indicators OECD Handbook on Economic Globalisation Indicators Globalisation Economic on Handbook OECD
    2005 « STATISTICS STATISTICS M Measuring Globalisation easuring Globalisation OECD Handbook on Economic Globalisation Although globalisation’s impact on national economies is well recognised, little quantitative information is available to shed light on the issues involved in debates on the subject. The purpose of this manual is not to evaluate the many consequences of globalisation, but rather to measure its extent and intensity. The manual defines the concepts and puts forward guidelines for data collection and the fine-tuning of globalisation indicators. Measuring Globalisation The proposed indicators apply by and large to multinational firms – the major players in the process of globalisation – particularly in the areas of trade, international investment and technology transfer. OECD Handbook on Economic Globalisation Indicators OECD Handbook on Economic Globalisation Indicators OECD Handbook on Economic Globalisation Indicators OECD’s books, periodicals and statistical databases are now available via www.SourceOECD.org, our online library. This book is available to subscribers to the following SourceOECD themes: Statistics: Sources and Methods Industry, Services and Trade General Economics and Future Studies Science and Information Technology Ask your librarian for more details of how to access OECD books on line, or write to us at [email protected] www.oecd.org ISBN 92-64-10808-4 2005 92 2005 06 1 P -:HSTCQE=VU]U]U: 2005 Measuring Globalisation OECD Handbook on Economic Globalisation Indicators ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation.
    [Show full text]
  • Household Income and Wealth
    HOUSEHOLD INCOME AND WEALTH INCOME AND SAVINGS NATIONAL INCOME PER CAPITA HOUSEHOLD DISPOSABLE INCOME HOUSEHOLD SAVINGS INCOME INEQUALITY AND POVERTY INCOME INEQUALITY POVERTY RATES AND GAPS HOUSEHOLD WEALTH HOUSEHOLD FINANCIAL ASSETS HOUSEHOLD DEBT NON-FINANCIAL ASSETS BY HOUSEHOLDS HOUSEHOLD INCOME AND WEALTH • INCOME AND SAVINGS NATIONAL INCOME PER CAPITA While per capita gross domestic product is the indicator property income may never actually be returned to the most commonly used to compare income levels, two country but instead add to foreign direct investment. other measures are preferred, at least in theory, by many analysts. These are per capita Gross National Income Comparability (GNI) and Net National Income (NNI). Whereas GDP refers All countries compile data according to the 1993 SNA to the income generated by production activities on the “System of National Accounts, 1993” with the exception economic territory of the country, GNI measures the of Australia where data are compiled according to the income generated by the residents of a country, whether new 2008 SNA. It’s important to note however that earned on the domestic territory or abroad. differences between the 2008 SNA and the 1993 SNA do not have a significant impact of the comparability of the Definition indicators presented here and this implies that data are GNI is defined as GDP plus receipts from abroad less highly comparable across countries. payments to abroad of wages and salaries and of However, there are practical difficulties in the property income plus net taxes and subsidies receivable measurement both of international flows of wages and from abroad. NNI is equal to GNI net of depreciation.
    [Show full text]
  • Chapter 1 the Demand for Economic Statistics
    Chapter 1 The Demand for Economic Statistics The media publish economic data on a daily basis. But who decides which statistics are useful and which are not? Why is housework not included in the national income, and why are financial data available in real time, while to know the number of people in employment analysts have to wait for weeks? Contrary to popular belief, both the availability and the nature of economic statistics are closely linked to developments in economic theory, the requirements of political decision-makers, and each country’s way of looking at itself. In practice, statistics are based on theoretical and interpretative reference models, and if these change, so does the picture the statistics paint of the economic system. Thus, the data we have today represent the supply and demand sides of statistical information constantly attempting to catch up with each other, with both sides being strongly influenced by the changes taking place in society and political life. This chapter offers a descriptive summary of how the demand for economic statistics has evolved from the end of the Second World War to the present, characterised by the new challenges brought about by globalisation and the rise of the services sector. 1 THE DEMAND FOR ECONOMIC STATISTICS One of the major functions of economic statistics is to develop concepts, definitions, classifications and methods that can be used to produce statistical information that describes the state of and movements in economic phenomena, both in time and space. This information is then used to analyse the behaviour of economic operators, forecast likely movements of the economy as a whole, make economic policy and business decisions, weigh the pros and cons of alternative investments, etc.
    [Show full text]
  • Regulation: the Challenge to Govern Better, Learning from Failures to Prepare for the Future
    Regulation: The challenge to govern better, learning from failures to prepare for the future OECD Conference Regulatory Policy at the Crossroads Luiz Alberto dos Santos Civil House of the Presidency - Brazil Paris, OECD, 29 October 2010 Introduction • Thank you very much for the generous and kind invitation of OECD to partipate in this Conferece and being part of the Final Plenary Session. • OECD proposed several important questions, but before try to answer them I think it is important to explain some aspects of the Brazilian situation and perspectives Brazil Wants to Accelerate Growth • 1985-1994 – Hyperinflation; • 1994-2006 - Structural adjustments, tight fiscal and monetary policies; • 2003-2006 – Inequality reduction; • 2007 to present – A new development cycle. • Today: macroeconomic stability and sound fiscal policy; • Country’s big issue: sustained economic growth. After 2008 crisis... Government infrastructure actions • Since 2006 and under PAC – a strategic investment programa with management and boosting actions: • Strong investment enhancement • Strong infrastructure development • Industrial sector policy • BNDES PSI - Program for Sustain Investment In short: • Brazil gathers the conditions to a long-term growth cycle and to become one of the most dynamic world economies • Atraction of foreign investment and development of the internal market requires good regulation to assure economic efficiency and foster entrepreneurship and innovation Regulatory Challenges in Brazil • The quality of regulation in Brazil is superior to the average in Latin America, but is inferior to what is seen in OECD countries; • The quantity of regulation is huge and burdensome. • Regulation is exercised by different kinds of institutions inside the Executive Branch, from ministeries to regulatory agencies.
    [Show full text]
  • OECD Economic Surveys Brazil
    OECD Economic Surveys %UD]LO )HEUXDU\ OVERVIEW www.oecd.org/eco/surveys/economic-survey-ďƌĂnjŝů.htm This Overview is extracted from the 2018 Economic Survey of Brazil. The Survey was discussed at a meeting of the Economic and Development Review Committee on 13 November 2017 and is published on the responsibility of the Secretary-General of the OECD. This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. OECD Economic Surveys: Brazil © OECD 2018 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgement of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected] of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
    [Show full text]
  • The Rise and Fall of Argentina
    Spruk Lat Am Econ Rev (2019) 28:16 https://doi.org/10.1186/s40503-019-0076-2 Latin American Economic Review RESEARCH ARTICLE Open Access The rise and fall of Argentina Rok Spruk* *Correspondence: [email protected] Abstract School of Economics I examine the contribution of institutional breakdowns to long-run development, and Business, University of Ljubljana, Kardeljeva drawing on Argentina’s unique departure from a rich country on the eve of World ploscad 27, 1000 Ljubljana, War I to an underdeveloped one today. The empirical strategy is based on building Slovenia a counterfactual scenario to examine the path of Argentina’s long-run development in the absence of breakdowns, assuming it would follow the institutional trends in countries at parallel stages of development. Drawing on Argentina’s large historical bibliography, I have identifed the institutional breakdowns and coded for the period 1850–2012. The synthetic control and diference-in-diferences estimates here suggest that, in the absence of institutional breakdowns, Argentina would largely have avoided the decline and joined the ranks of rich countries with an income level similar to that of New Zealand. Keywords: Long-run development, New institutional economics, Political economy, Argentina, Applied econometrics JEL Classifcation: C23, K16, N16, N46, O43, O47 1 Introduction On the eve of World War I, the future of Argentina looked bright. Since its promulga- tion of the 1853 Constitution, Argentina had experienced strong economic growth and institutional modernization, which had propelled it into the ranks of the 10 wealthi- est countries in the world by 1913. In the aftermath of the war, Argentina’s income per capita fell from a level approximating that of Switzerland to its current middle-income country status.
    [Show full text]