Wednesday, 31 July 2013

What do we (Really) Know From Economic Development? A Random Analysis of Poverty in Some Non-Developed Countries

by Jaime Bravo

  One of the things I have come across recently is the fact that we know very  little about poverty. I mean, really. We have the Millennium Goals, settled by the UN, and, yes, poverty is decreasing in some parts of the world. In a study I made a few weeks ago, I discovered a few facts about poverty in non-developed countries that are really important. I saw that there is a big problem with GDP all across the world. The study was based on a few countries (particularly, Germany, Pakistan, Bangladesh, Argentina, Afghanistan, Colombia and Spain) and there were three different groups.

Firstly, I considered GER and SPA as the completely developed countries; ARG and COL (those from Latin-America) are considered as the upcoming-completely-developed countries among the group. Finally, PAK, AFG and BAN are the less-developed countries included in the study. What I saw was that, even though the less developed  had a lower-income than the others, they were doing significant efforts (for example, the number of children in school in Afghanistan has increased a lot if we compare it with the upcoming-completely-developed economies).

Secondly, I found that the crisis hit harder to developed economies than to non-developed ones (the table I presented included data from Afghanistan, Albania, Bangladesh, Burundi, Colombia, Ethiopia, Germany, Kenya, Norway, Spain, Sudan, Thailand, France and Austria) in terms of GDP reduction. It could be because both the GDP and the exports decreased simultaneously. (The table presented considered the data from 2009, one year after the crisis started.) This is quite interesting: while non-developed economies are mainly importers of manufactured-products and exporters of commodities, they didn't stopped exporting commodities but importing manufactured products. The logic behind this is quite simple. Non-developed economies have a lot of unskilled labour and they have a lot of labour-intensive industries. In the other hand, developed economies have some kind of equilibrium between unskilled and skilled-labour and they have a lot of capital-intensive sectors/industries.

The non-developed economies have three things in common: they have a big population, they have problems of health and education and they have inefficient markets (insurance markets, capital markets etc.) Of course there are more similarities but the ones quoted here are the main relevant for the study. There’s other thing: about how clean are their economies. The study found out that the non-developed countries had more CO2 emissions compared to developed-countries if we consider three facts: the industry, the productive model, and the main economic activity (that is, what is “better” for the GDP). One of the most surprising parts was that, while developed-countries reduce their emissions, non-developed ones increase them. This could be both because multinationals firms decide to establish there and this leads to more CO2 emissions and because the FDI has increased a lot since the crisis started. The FDI, is meant to promote development through the creation of jobs and the increase of the purchasing power. Although this is the theory, this doesn't seem to be working right now. (I'm currently working on this issue).

Finally, as a conclusion I must say that we know very little about poverty. One of the biggest issues one developmental economist finds when he faces the data is that the poor are not strange, lazy and stupid people who are poor because they want. There are big issues about them, and is our duty to explore them. From here, I will try to talk about the poor and the studies I make. I will try to explain relevant things for those who enjoy development; I will try to write (always based on data and on empirical facts) about the issues that concern to all of us as we participate of the life of the poor.

I must thank Viva Avasthi for her invite to write in the blog. It was outstanding to find a group of teenagers (as me) that wanted to find out what the economy was. This is why when I first looked at this blog, I felt that I needed to encourage them to continue. It’s a great to pleasure to contribute.

Please, if you have any enquiry about the data and the methodology used, feel free to reach me at 
jbravo [at] beneficiomarginal [dot] com


  1. Great article. The study that you're referring to sounds really interesting. Could you please post a link to the original study down here in the comments section? Thanks.

  2. Hello Sam,

    Sure, here's the link to the study I made downloadable document is in Spanish though. If you have any enquiry, just email me.



    1. Hi Jaime,

      My Spanish isn't very good at all, but your report does look promising. If only it were in English!

    2. Sam,

      Email me and I will try to send you the main findings translated.


  3. Hi Jaime,

    Good job on this article!

    I just wanted to comment on the part of your article where you wrote: "One of the most surprising parts was that, while developed-countries reduce their emissions, non-developed ones increase them."

    It's not actually very surprising that developed countries are reducing their emissions while developing ones are increasing them if you consider the Industrial Revolution and the Kyoto Protocol. See these links for more info:

    Historically, it has most commonly been through industrialisation that countries have become rich. Therefore, to allow poorer countries to develop they must be allowed to increase their emissions (until science develops enough to allow them to manufacture even with low emissions). That's why the Kyoto Protocol only requires the wealthier industrialised countries to limit their emissions - it is widely accepted that developing countries cannot progress properly without increasing their emissions.

  4. Viva,

    Yes, that's true, but I've considered that the increase was surprising taking into account the three conditions explained above, despite the fact of what the Kyoto Protocol says.



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