NCPA - National Center for Policy Analysis


April 25, 2005

The international community is concerned that income inequality between rich countries and poor countries is not shrinking, and in many cases, has grown. A new article from the World Bank argues that while income levels are not converging, other quality of life indicators are converging.

The author notes that many health indicators have been converging over the past century. To illustrate, he compares Britain and India:

  • In 1931, life expectancy was 60.8 years in Britain and 26.8 years in India.
  • By 1999, Britons lived on average to 77, while Indians lived to 63.
  • Similarly, in 1900 Britain the infant survival rate was 846 per 1,000 births compared to 655 in India.
  • Today, 992 British infants out of every 1,000 survive, compared to 920 Indians.

Ultimately, the author argues that it takes one-tenth the income to achieve the same life expectancy in 1999 as it took in 1870. That is because of spillover technology and knowledge from the developed world. For example, modern agricultural improvements boost productivity, which increases calories and income available to families, which allows them to send their children to school. As a result of these spillover benefits, the poor countries are improving their plight, if not their income:

  • Worldwide, the proportion of the world?s population living in countries where per capita food supplies are under 2,200 calories per day was 56 percent in the mid 1960s, but fell to under 10 percent in the 1990s.
  • Between 1950 and 1999, global literacy increased from 52 percent to 81 percent of the world.
  • Most of this gain has been in the developing world -- for example, in 1913, only 9 percent of Indians could read, compared to 57 percent today.

Source: Ronald Bailey, "The Poor May Not Be Getting Richer," Reason, March 9, 2005; based upon: Charles Kenny, "Why Are We Worried About Income? Nearly Everything That Matters is Converging," World Bank, World Development, Vol. 33, No. 1, January 2005.

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