Social Welfare Functions and Development (eBook)

Nanak Kawkani was Professor of Economics for 30 years at the University of New South Wales in Sydney, Australia, and until 2006 was Principal Researcher and Director at UNDP’s International Policy Centre for Inclusive Growth in Brazil. He was an elected fellow of the Australian Research Committee of Social Science, and has been awarded the Mahalanobis gold medal for outstanding contribution in quantitative economics. He has published over 100 articles in international journals, as well as four books.Hyun Hwa Son is Principal Evaluation Specialist in the Independent Evaluation Department of the Asian Development Bank (ADB), Philippines, having previously worked as a poverty economist at the United Nations Development Programme. She has held an academic position at Macquarie University in Sydney, Australia, and published extensively on poverty, inequality, pro-poor growth, inclusive growth, education and health.                 

Foreword 6
Preface and Acknowledgements 10
Contents 14
List of Figures 20
List of Tables 24
List of Boxes 30
1: Introduction 31
1.1 The Concept of Development 31
1.2 The Concept of Social Welfare Function 34
1.3 Inequality and Social Welfare Functions 36
1.4 Social Tension and Social Welfare Functions 38
1.5 Inequality Among Social Groups 41
1.6 Social Policies and the Labor Market 43
1.7 Income Inequality and Social Well-Being 45
1.8 Inequity in Opportunity 46
1.9 Global Poverty Estimates 48
1.10 Food Insecurity 50
1.11 Evaluation of Social Programs 51
2: Applied Social Welfare Functions 53
2.1 Introduction 53
2.2 What is a Social Welfare Function? 54
2.3 Income Inequality and Social Welfare Function 56
2.4 A Class of Atkinson’s Inequality Measures and Social Welfare Functions 60
2.5 Relative Versus Absolute Inequality 62
2.6 Gini Social Welfare Function 63
2.7 Generalized Gini Social Welfare Function 66
2.8 Rawlsian Social Welfare Function and Shared Prosperity 67
2.9 Estimates of Social Welfare Functions in Asia: An Illustration 68
2.10 Concluding Remarks 72
3: Measuring Social Tension 74
3.1 Introduction 74
3.2 A General Framework for Measuring Social Tension 75
3.3 Social Tension Caused by Inequality 76
3.4 Social Tension Caused by Poverty 78
3.5 Social Tension and Polarization 82
3.6 Growth Volatility and Social Tension 86
3.7 Social Mobility and Social Tension 88
3.8 Empirical Analysis of Social Tension in Brazil 91
3.8.1 Social Tension Due to Inequality 91
3.8.2 Social Tension Due to Poverty 93
3.8.3 Social Tension Due to Alienation and Polarization 97
3.8.4 Growth Volatility and Social Tension 100
3.8.5 Social Immobility 102
3.9 Concluding Remarks 104
4: Relative Deprivation and Social Groups 106
4.1 Introduction 106
4.2 Relative Deprivation Function 107
4.3 Relative Deprivation Suffered by Social Groups 110
4.4 Empirical Analysis: Case Study for  Brazil, 2001–12 111
4.5 Age and Inequality 112
4.6 Gender and Inequality 117
4.7 Geographical Location and Inequality 121
4.8 Middle Class and Inequality 124
4.9 Race and Inequality 129
4.10 Education and Inequality 132
4.11 Concluding Remarks 136
5: Growth and Shared Prosperity 139
5.1 Introduction 139
5.2 A Simple Indicator of Shared Prosperity 140
5.3 Shared Growth 142
5.4 Patterns of Shared Prosperity in Brazil 143
5.5 Shared Growth in Brazil 145
5.6 Determinants of Shared Prosperity 146
5.7 Determinants of Shared Prosperity in Brazil from 2001 to 2012 148
5.8 The Role of Labor Market in Explaining Shared Growth 152
5.9 Shared Opportunities 156
5.9.1 Employment Opportunities 158
5.9.2 Productive Employment 158
5.9.3 Opportunity in Educational Attainment 160
5.9.4 School Attendance 161
5.10 Concluding Remarks 163
6: Income Inequality and Social Well-Being 166
6.1 Introduction 166
6.2 What is Well-Being? 169
6.3 Selection of Capabilities 170
6.4 Indicators of Well-Being 171
6.5 Levels and Performance of Well-Being in Brazil 178
6.6 Inequality of Well-Being 182
6.7 Linkage Between Ends and Means 187
6.8 Magnitude of Inequality in Well-Being in Brazil 189
6.9 Income Inequality Elasticity of Well-Being 192
6.10 Concluding Remarks 204
Appendix 206
Regression Estimates 206
7: Measuring Equity in Opportunity Using Social Opportunity Function 218
7.1 Introduction 218
7.2 Inequality of Opportunities 220
7.3 A New Method of Measuring Contribution of Circumstance Variables to Inequality 223
7.4 Human Opportunity Index 225
7.5 Equity in Opportunity Based on Social Opportunity Function 226
7.6 Access of Opportunity by Social Groups 231
7.7 Empirical Analysis for Selected Countries in Asia 233
7.7.1 Opportunities in Education 234
Indonesia 234
Bangladesh 237
Pakistan 238
Sri Lanka 239
Vietnam 241
Philippines 242
Bhutan 243
A Summary of Opportunities Across Selected Countries 245
7.7.2 Opportunities in Health 246
Indonesia 247
Philippines 249
Vietnam 252
7.8 Concluding Remarks 253
8: Global Poverty Counts 256
8.1 Introduction 256
8.2 Establishing Global Poverty Lines 258
8.3 Producing Global Poverty Estimates 261
8.4 The Poverty Line in 2011 Purchasing Power Parity: World Bank’s Method 262
8.5 Equivalent Poverty Lines: An Alternative Method 264
8.6 Global Poverty Counts Based on Equivalent Poverty Lines 265
8.7 Concluding Remarks 268
Appendix 1 269
Appendix 2 272
9: Measuring Food Insecurity: Global Estimates 279
9.1 Introduction 279
9.2 Distinction Between Food and Nutritional Security 281
9.3 Prevalence of Undernourishment 283
9.4 The Debate on Nutritional Insecurity: A Brief Overview 284
9.5 The FAO Method of Measuring Hunger 287
9.6 Limitations of FAO Method 289
9.7 Food Insecurity as Entitlement Failure 292
9.8 Measuring Household Food Security: A Proposed Method 294
9.9 Households’ per Capita Minimum Dietary Requirement 294
9.10 What is the Cost of a Nutritious Food Basket? 298
9.11 A Balanced Food Basket 301
9.12 Global Estimates of Food Insecurity 303
9.13 Linkage Between Economic Growth and Food Insecurity 307
9.14 The Link Between Food Insecurity and Extreme Poverty 310
9.15 Concluding Remarks 311
Appendix 315
10: Social Rate of Return: A New Tool for Evaluating Social Programs 321
10.1 Introduction 321
10.2 Beneficiary Incidence 323
10.3 Benefit Incidence 326
10.4 Social Rate of Return 328
10.5 Operationalizing Social Rate of Return 333
10.5.1 Poverty Social Welfare Function 333
10.5.2 Gini Social Welfare Function 337
10.6 Contribution to Poverty and Inequality 339
10.7 Bolsa Familia Program 342
10.7.1 Coverage 343
10.7.2 Transfers per Beneficiary 344
10.7.3 Beneficiary Incidence Analysis 346
10.7.4 Exclusion Error and Leakage 347
10.7.5 Social Rate of Return of Bolsa Familia 349
10.7.6 Impact of the Program on Poverty and Inequality 352
10.7.7 Conditionality 354
10.8 Pantawid Pamilyang Pilipino Program 355
10.9 Comparison of Bolsa Familia and 4Ps 356
10.10 Concluding Remarks 360
Bibliography 363
Index 374