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Pre-sessional Programme Academic Assignment Student number Sample B Class name (e.g. 13a) Assignment Title Submission Date Define your academic subject and outline what it means to do ‘research’ in that subject, then choose one seminal or recent piece of research and evaluate its contribution to your field of academic study. 2014/7/20 Word Count (Not including this2 pags or the reference list) 969 Academic course after Emerging Economies Pre-sessional Undergraduate or Postgraduate PG (delete appropriately) Sample B 1 The study of economic growth and development has undergone several radical changes in the past century (Galor, 2009). The pragmatic and output focused mainstream that dominated the field for several decades gradually gave room to new theories that share a more humanistic approach of the matter, such as the Freedom theory postulated by Sen (1999). The challenge has been to make use of what both lines of thought defend and apply them into successful long lasting policies. An analysis of developing countries is made by Andy Sumner in his paper “From deprivation to distribution: Is global poverty becoming a matter of national inequality?” in which he exemplifies and thoroughly shows that positive changes on GDP may not lead to improvement in the standard of living of people. He suggests that poverty has become a matter of national distribution and therefore national political economy. In the present work the concept of economic development is succinctly defined followed by a discussion on Andy Sumner’s paper and other variables that could also have been analysed to increase its relevance to the field. Economic growth is defined as the steady increase in the aggregate output (Blanchard, 2013) which is expected to be reflected positively on people’s standard of living. It is argued by the same author that economic growth and development are both overlapping and complementary theories. According to Blanchard “growth theory takes many of the institutions of a country, for example, its legal system and its form of government as given whilst development asks what institutions are needed to sustain steady growth”. A distinct definition is defended by Amartya Sen(1999) who sees development as “a process of expanding the real freedoms that people enjoy”. Freedoms in this sense are to be understood as the opportunity or possibility of enjoying and participating in the social, political and economic life of a community. It has been challenging, however, to most countries, to work with and achieve an alignment of both theories, as what has been pursued is permanent increase of life standards instead of only that of the GDP. Andy Sumner’s paper “From deprivation to distribution: Is global poverty becoming a matter of national inequality? “ studies the shift of the economic and Sample B 2 social situation that low income countries (LICs), middle income countries (MICs) and upper middle income countries (UPMICs) have undergone and makes estimations of how they will be in 2020 and 2030. He mainly uses three forms of evaluation to measure the level of poverty in the groups: by average incomes compared to the international poverty lines ($1.25 and $2 per capita/day), by the overall “burden” of poverty meaning the total poverty gap as a percentage of GDP and by structural indicators. Structural indicators such as aid dependency, GDP in agriculture, urbanisation and export dependency on primary sectors, are considered a safe form of evaluating the economic evolution of a country as they normally suffer severe alteration with development. In his study he states that in 1990 nearly 90 per cent of the world’s poor (by both international poverty lines, $1.25 and $2) lived in LICs and that in 2008 70-80 per cent of the poor population was living in LMIC even though these countries had a 5 times higher income than those in the LIC group. For the LMIC group the percentage of the GDP that would be necessary to eradicate both extreme and relative poverty is below 1% being no longer prohibitively high. This pattern is expected to continue for 2020 and 2030 being of 0,2 per cent of GDP for LMICs and of 0 per cent for UPMIC, therefor, according to this analysis to eradicate poverty would not be a matter of traditional aid (meaning resource transfer) but of national distribution and therefore of national political economy. However, this study does not consider that national distribution is not the only means to achieve higher per capita income and as consequence standard of living. Moreover, the degree of dispersion of this sample in analysing countries of completely different economic and social structures compromises that a reliable analysis is done, problem acknowledged by Sumner. Redistribution of income although powerful in the short term may not have long-term effects as what countries are hoping to achieve is not only slightly higher per capita income but the possibility of social mobility. The control over inflation has proven to be a long lasting tool as it increases the purchasing power of the population, as usually in the occurrence of inflationary trends wages do not tend to be readjusted accordingly (Blanchard, 2013). This paper however interesting for a general understanding of the world’s poverty does not offer significant impact to the field or to further studies that do not have such a broad focus. The Sample B 3 exercise of estimation is also highly imprecise as it is difficult to estimate the effect in the future of all policies being currently applied to every country, especially considering such a broad sample. Resources would be better used if focusing on continents and countries that share similarities in its problems. Furthermore, the statistical work has very little impact on social economic development as the latter is much more connected to the subjectivity of each country. Inequality is and will highly likely continue to be a scourge to society. Moreover, rapid economic growth experienced by some countries was not enough to overcome the problem, which suggests that other variables have to be taken into account. To eradicate poverty is, however feasible, an ambitious target to achieve as exemplified by Andy Sumner’s study. It has become a matter of development and not only growth. On this view, the broad focus generally followed in research does not tackle the problem effectively. Possibly, if studies and researchers were disconnected to the exclusively numerical approach of a humanistic problem more fruitful research would be conducted. References: Sen, Amartya (1999). Development as freedom, Oxford University Press From Deprivation to Distribution: Is Global Poverty Becoming A Matter of Inequality? IDS Working Paper 394 Blanchard, Olivier (2013) Macroeconomics, Pearson Galor, Oded (2009) Inequality and Economic Development, USA, Brown University Sample B 4