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March 23, 2004

Global Economic Inequality

Sometimes a picture is worth much more than 1,000 words.  Take this one:

graph: global economic inequality

The Economist ran a great story recently about global economic inequality: More or Less Equal?  These graphs accompany the story.

The graph plots a circle for each country in the world.  The X axis is the current [1980] GDP per person, and the Y axis is the growth rate of the GDP per person.  Anyone looking at the top graph would conclude that the gap between rich countries and poor countries is getting larger; on average the rich are getting richer, faster.  But now look at the bottom graph, where the size of each country's population is reflected in the size of its circle.  China and India are poor, but their growth rate leads the world, and they are also the two most populous countries.  By considering population, now you might draw the opposite conclusion; that [on average] the poor are getting less poor, faster than the rich are getting richer. 

Now notice one more thing - the horizontal red line signifying 0% growth.  The countries below this line are not only poor, but they are getting poorer.  The large poor country at the lower left is Nigeria, a sad situation if there ever was one.  In fact for most of the countries in sub-Saharan Africa (beige shading) the standard of living is getting worse.  This is due to AIDS and politics and wars and poor leaders and many other factors.  Clearly the third world is separating; Southeast Asia is very different from Africa.

Anyway it is a great graph, very thought provoking.  Edward Tufte would love it.

Posted by ole at 06:20 PM