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Intercountry inequality in human development: a 30-year perspective

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Disciplines
  • Economics

Abstract

Purpose – The purpose of this paper is to extend the existing literature on cross-country disparities by providing measures of cross-country inequality in human development index (HDI) and real income per capita over the 30-year period 1975-2004. Design/methodology/approach – A well-recommended inequality index is applied to the data. Findings – Ten points are noted: first, HDI inequality declined over the period; second, the pace of decline slowed somewhat since 1990; third, magnitude of HDI inequality has been quite small; fourth, inequality in gross domestic product per capita also shows a declining pattern over the period; fifth, there is very high correlation between HDI and per capita income; sixth, despite the high correlation, magnitudes of inequalities in the two variables are dramatically different; seventh, therefore, even very high correlation may not be interpreted as implying similar inequalities in the variables; eighth, cross-country inequalities in various regions show huge differences; ninth, negative trend in inequalities over the period shows high statistical significance; and tenth, t-tests for equality of means do not pick up well even huge differences in regional inequalities, suggesting need for considerable caution in the use of such tests. Originality/value – The primary scientific significance of the work lies in providing the measures of cross-country inequality in HDI over the 30-year period; showing dramatically different inequalities in HDI and income despite very high correlation between the two variables; and indicating cross-country inequalities in eight different regional groups and also across regions.

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