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Social cohesion, quality of life, and economic growth

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THAN A MIDDLE-CLASS ADULT MALE (SKILLED SPECIALIZED WORKER) IN GHANA, AFRICA. ... OF HARLEM WOULD BE MIDDLE CLASS, AND THE MIDDLE CLASS OF GHANA WOULD BE POOR. ... – PowerPoint PPT presentation

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Title: Social cohesion, quality of life, and economic growth


1
Social cohesion, quality of life, and economic
growth
by
  • Vicente Navarro
  • Professor of Public Policy
  • Johns Hopkins University, USA - Pompeu Fabra
    University, Spain

Paper presented in the Panel Inequalities and
Growth, Conference on Development, Trade, and
Immigration, April 7, 2006, SAIS, Washington, D.C.
2
  • POVERTY IS NOT AN ABSOLUTE BUT A RELATIVE
    CONCEPT.
  • POVERTY CANNOT BE MEASURED BY LEVELS OF PRIVATE
    CONSUMPTION.
  • MEASURES SUCH AS LIVING ON 1 OR 2 DOLLARS A DAY
    ASSUME THAT POVERTY IS A QUESTION OF PRIVATE
    RESOURCE CONSUMPTION.

3
  • A POOR BLACK ADULT MALE IN HARLEM (IN THE LOWEST
    INCOME DECILE IN THE U.S.) HAS MORE RESOURCES
    (INCOME, TV, CAR, MOBILE PHONE, ETC.) THAN A
    MIDDLE-CLASS ADULT MALE (SKILLED SPECIALIZED
    WORKER) IN GHANA, AFRICA.
  • BUT THE FIRST PERSON HAS A MUCH LOWER LIFE
    EXPECTANCY (45 YEARS) THAN THE SECOND (58 YEARS).

4
  • IF THE WORLD WERE A NATIONAL STATE, THE POOR OF
    HARLEM WOULD BE MIDDLE CLASS, AND THE MIDDLE
    CLASS OF GHANA WOULD BE POOR.
  • AND YET. . .
  • THE MIDDLE-CLASS PERSON IN HARLEM IN THIS
    NATIONAL STATE WOULD HAVE A SHORTER LIFE
    EXPECTANCY THAN THE POOREST PERSON.

5
  • I DONT CARE HOW UNEQUAL A SOCIETY IS. I CARE
    ONLY ABOUT HOW MANY POOR PEOPLE ARE IN THAT
    SOCIETY.
  • WRONG!
  • THE KEY ISSUE FOR EXPLAINING QUALITY OF LIFE IN
    EACH SOCIETY (AND IN THE WORLD) IS THE
    INEQUALITIES THAT GENERATE SOCIAL DISTANCE.

6
  • WHY?
  • SOCIAL DISTANCE
  • IT IS MORE DIFFICULT TO BE A BLACK UNEMPLOYED
    WORKER IN HARLEM THAN A MIDDLE-CLASS PERSON IN
    GHANA.
  • THE SOCIAL DISTANCE BETWEEN THE BLACK UNEMPLOYED
    WORKER AND THE MEDIAN IN THE U.S. IS MUCH LARGER
    THAN THE SOCIAL DISTANCE BETWEEN THE SKILLED
    MIDDLE-CLASS PERSON AND THE MEDIAN IN GHANA.
  • THE FIRST PERSON IS FAR BELOW THE MEDIAN THE
    SECOND IS ABOVE THE MEDIAN.

7
  • SOCIAL COHESION. SENSE OF TOGETHERNESS. BASED ON
    SOLIDARITY WITHIN THE SAME NATIONAL STATE.
  • EXAMPLE WORLD WAR II IN GREAT BRITAIN
  • NEVER BEFORE OR AFTER DID LIFE EXPECTANCY
    INCREASE FASTER THAN IN THE PERIOD 1940-1951.

8

9
  • WHAT HAPPENED IN GREAT BRITAIN DURING THE
    THATCHER GOVERNMENT?
  • SOCIAL COHESION DIMINISHED, AND RATE OF DECLINE
    OF MORTALITY FOR ALL AGE GROUPS SLOWED DOWN.

10

Source Wilkinson RG. Unhealthy Societies The
Affliction of Inequality. Routledge, 1996.
11
  • THERE IS VERY ROBUST SCIENTIFIC EVIDENCE THAT
    SOCIAL DISTANCE CREATES PATHOLOGY.
  • MARMOTS STUDIES AMONG BRITISH CIVIL SERVANTS
  • DISTANCE IS A BETTER EXPLANATORY VARIABLE THAN
    DIET, PHYSICAL EXERCISE, BLOOD PRESSURE, OR OTHER
    FACTORS, FOR CORONARY HEART DISEASE MORTALITY.

12

13
  • THERE IS WELL-DOCUMENTED EVIDENCE THAT COUNTRIES
    WITH FEWER INEQUALITIES HAVE LONGER LIFE
    EXPECTANCIES.

14
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15

16

17

18
SOCIAL DISTANCE IS PART OF THE PROBLEM
  • BUT PERCEPTION OF THE REASONS FOR THAT DISTANCE
    IS IMPORTANT

19
Income differentials are too large
  • Australia 71
  • Austria 86
  • Canada 71
  • France 88
  • Germany 82
  • Norway 73
  • Japan 69
  • U.K. 82
  • U.S. 66
  • Source International Social Survey Program
    (ISSP), 1999.

20
WHY IS THE DISTANCE TOO LARGE?BECAUSE PEOPLE
BELIEVE IT IS UNFAIR
  • WHY IS IT UNFAIR?
  • BECAUSE INEQUALITY
  • IS NOT BASED ON MERIT

21
  • INEQUALITY
  • WHAT IS IT BASED ON?
  • A GOOD QUESTION
  • MAJOR EXPLANATIONS
  • DOMINION, HIERARCHY, AUTHORITY, GRADIENT OF
    CONTROL
  • YES, BUT THESE EXPLANATIONS ARE NOT ENOUGH. THE
    REAL CAUSE MAY BE EXPLOITATION.
  • THE PERCEPTION OF THIS PROBABILITY MAY BE THE
    MOST IMPORTANT EVENT IN THE 21ST CENTURY.

22
The Barcelona Model
23
Infant Mortality Rate Correlation with Power
Relations, Labor Market, Welfare State, and
Inequalities(OECD Countries)
.
Source Navarro, V. (ed). The Social and
Political Contexts of Health. Baywood. 2005.
24
COUNTRIES WITH FEWER INEQUALITIES(SUCH AS
NORTHERN EUROPEAN COUNTRIES BASED IN A SOCIAL
DEMOCRATIC TRADITION)
  • HAVE A MORE REDISTRIBUTIVE WELFARE STATE.
  • HAVE LARGER PUBLIC EXPENDITURES.

25
WHY HIGHER INEQUALITY MAY LEAD TO LOWER ECONOMIC
GROWTH
  • BECAUSE IT REDUCES DOMESTIC CONSUMPTION.
  • BECAUSE IT REDUCES COOPERATION AND INCREASES
    TENSIONS (AT THE WORKPLACE, AMONG OTHER PLACES).

26
WHY ARE INEQUALITIES BAD?
  • LACK OF COHESION CREATES SOCIAL PATHOLOGY.
  • THEY DIMINISH REPRESENTATIVENESS OF DEMOCRATIC
    INSTITUTIONS. (ECONOMIC CONCENTRATION LEADS TO
    POLITICAL CONCENTRATION.)
  • THEY LEAD TO LOWER ECONOMIC GROWTH(?)

27
THERE IS NOT A CLEAR RELATIONSHIP BETWEEN
  • INCOME INEQUALITIES AND ECONOMIC GROWTH.
  • SWEDEN (HIGHLY EGALITARIAN) HAD POOR GROWTH
    PERFORMANCE IN 1980S AND 1990s.
  • BUT NORWAY AND FINLAND DID MUCH BETTER.
  • AND AUSTRIA AND BELGIUM DID BETTER THAN MOST.

28
BUT,WE HAVE TO ANALYZE DIFFERENT TIME PERIODS
  • THERE WAS A POSITIVE RELATIONSHIP BETWEEN
  • REDISTRIBUTION, PUBLIC EXPENDITURES, PUBLIC
    SOCIAL EXPENDITURES
  • AND
  • ECONOMIC GROWTH DURING THE PERIOD 1950-1970.
  • AMBIGUOUS AFTER THAT.
  • BUT, ANALYZING 
  • NATURE OF REDISTRIBUTION
  • TAXES VERSUS TRANSFERS
  • AND TYPE OF TAXES
  • CONSUMPTION TAXES ?
  • PAYROLL TAXES ?

29
AND TYPE OF TRANSFERS
  •         PENSIONS ?
  •         INCOME UNEMPLOYMENT SUPPORT
  •         OTHERS ?
  • AND CHANGES IN
  •         SUPPLY OF LABOR ?
  •         SUPPLY OF CAPITAL ?
  •         PRODUCTIVITY ?

30
  • Books to Read
  • Navarro, V. (ed.) The Political Economy of Social
    Inequalities. Consequences for Health and Quality
    of Life, Baywood, 2002
  • Navarro, V. (ed.) The Political and Social
    Contexts of Health, Baywood, 2004
  • Navarro, V., Muntaner, C. (eds.) Political and
    Economic Determinants of Population Health and
    Well-Being. Controversies and Developments,
    Baywood, 2005
  • Navarro, V. Neoliberalismo y Estado del
    Bienestar, Ariel Sociedad Economica, Ariel
    Sociedad Economica, 1997, 1st Ed., 1998, 2nd ed
  • Navarro, V. Globalizacion ecnomica, poder
    politico y Estado del bienestar, Ariel Sociedad
    Economica, 2000
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