SFeDu

IN THE FOOTSTEPS OF «THE GREAT ESCAPE» BY A. DEATON

TERRA ECONOMICUS, , Vol. 14 (no. 2),

The article is devoted to developing countries trying to escape from the world of poverty and misery, which began after the Second World War. In the work «The Great Escape: Health, Wealth, and the Origins of Inequality» (2013) A. Deaton notes that over the past 250 years, mankind has made great strides in the development of public health and welfare of people. Although it did not reduced, and often widened the gap between developed and developing countries, the latter, according to Deaton, have all chances to break the cycle of disease and poverty. Anyway, two largest countries – China and India made the great strides and achieved real progress on this path. Not all countries have managed to achieve such significant success. However, their progress depends primarily on their own efforts. Therefore, the author believes that it is not financial aid to poor countries which guarantees success, but elimination of customs obstacles, entry/residencepermits for migrant workers, and creation of tropical medicines, which do not bring back high profit to pharmaceutical companies. The problem of income inequality and consumption is one of the main focuses for the Nobel laureate in economics in 2015 A. Deaton. In his monographs «Understanding Consumption» (1992) and «The Analysis of Household Surveys: A Microeconometric Approach to Development Policy» (1997), A. Deaton examines the relationship between the total expenditure of economic agents and the nutritional value of foods consumed, to evaluate how effectively the poor, the rich and the middle class spend their budgets in order to cover their need for calories necessary for life. In Deaton’s work «Data and Dogma: The Great Indian Poverty Debate» (2005) the author emphasizes the importance of independent statistical research for a sober assessment of the success of economic reforms in the country – in particular, measures to combat poverty. In India, where the number of poor is in the hundreds of millions, the government isexcessively optimistic suggesting in its official reports that the authorities effectively solve this problem. A. Deaton became famous in 2010 thanks to his study conducted in cooperation with the American psychologist Daniel Kahneman, «High Income Improves Evaluation of Live but Not Emotional Well-Being» (2010). Scientists have wondered,«How much people need for happiness?». Having interviewed 450 thousand Americans, they received a very interesting result: for a man to safelyendure various kinds of life troubles, at least $75 000 a year is a sufficient level of earnings. If the income level is lower, then the troubles are perceived more emotionally. However, with further increase of welfare, level of satisfaction with life does not change. Big money do not add happiness.


Keywords: economic growth; income inequality; the effectiveness of consumption; health and wealth

References:
  • Deaton A. (2016). The Great Escape: Health, Wealth, and the Origins of Inequality. Moscow: Gaidar Institute Publ.; Liberal Mission Foundation Publ. (In Russian.)
  • Easterly W. (2006). The Elusive Quest for Growth. Economists’ Adventures and Misadventures in the Tropics. Moscow: Institute of Complex Strategic Investigations Publ. (In Russian.)
  • Marx K. and Engels F. (1955–1966). Collected works, vol. 1–39. (In Russian.)
  • Nureev R. (2015). Development Economics: the Models of Market Economy Emergence. Moscow: Infra-M Publ. (In Russian.)
  • Sen A. (2004). Development as a Freedom. Moscow: Liberal Mission Foundation Publ. (In Russian.)
  • Todaro M. (1997). Economic Development. Moscow: Economic faculty of the Moscow State University Publ.; Uniti Publ., pp. 246–254. (In Russian.)
  • Besley T. and Burgess R. (2000). Does the Media Make Government Responsive? Theory and Evidence from Indian Famine Relief Policy (http://econ.lse.ac.uk/staff/rburgess/wp/mediaf.pdf).
  • Besley T. and Ghatak M. (1999). Public-Private Partnership for the Provision of Public Goods: Theory and an Application to NGOs in Development Countries. Mimeo Department of Economics, LSE.
  • Chambers R. (1983). Rural development: putting the last first. Harlow: Prentice Hall.
  • Deaton A. (1992). Understanding Consumption. Clarendon Lectures in Economics. Oxford: Clarendon Press.
  • Deaton A. (1997). The Analysis of Household Surveys: A Microeconometric Approach to Development Policy. L.: Johns Hopkins University Press.
  • Deaton A. (2016). The Great Escape: Health, Wealth, and the Origins of Inequality. Princeton University Press.
  • Deaton A. and Kozel V. (ed.)(2005). Data and Dogma: The Great Indian Poverty Debate. New Delhi: Macmillan India Ltd.
  • Hayami Y. (1997). Development Economics From the poverty to wealth of nations. Oxford.
  • Leibenstein H.A. (1957). Economic Backwardness and Economic Growth: Studies in the Theory of Economic Development. N.Y.: Wiley.
  • Mirrlees J.A. (1975). A Pure Theory of Underdeveloped Economies / In: Reynolds L.G. (ed.) Agriculture in Development Theory. New Haven, Coon.: Yale Univ. Press.
  • Preston S. (1975). The changing relation between mortality and level of economic development. Population Studies, 29 (2), pp. 231–248.
  • Ray D. (1998). Development Economics. Princeton University Press.
  • Sen A. (1989). Food and freedom. Word development, vol. 17, no. 6, pp. 769–781.
  • Stiglitz J.E. (1976). The Efficiency Wage Hypothesis, Surplus Labour, and the Distribution of Income in L.D.C.s. Oxford Econ. Papers, 28, pp. 185–207.
  • Subramanian S. and Deaton A. (1996). The Demand for Food and Calories. Journal of Political Economy, 104 (1).
Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606