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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
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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
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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
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