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Monday, May 23, 2011

The Changing Distribution of Per Capita GDP Over Time

Another way of looking at the data I'm working with on GDP per capita at PPP.  The below graphic shows the distribution of GDP per capita in 1980, 1990, 2000, 2010, and forecasts for 2015.  Using per capita figures takes out the disparity in population size, showing a truer measure of prosperity.  I broke the distribution of incomes down into blocks of 5000.  That is, the plot for 5000 represents all countries with a per capita figure of 5000 or less.  In the chart, you can see that the world is growing more prosperous:  Fewer countries reside at the lower end and are spreading out across the distribution.  There is also a "lump" breaking away from the pack in the middle income category between 1980 and 2000.  Between 2000 and 2015, that middle income lump is splitting into two.  What is harder to see on this plot (I'll work on it) is that there are a few mega-rich states (the leader being the oil and gas sheikdom of Qatar) running far away from the pack.  The line trailing out is at zero, but the few bumps on their way to 115,000 are individual countries breaking far ahead of the pack.

In the second figure, each country's per capita GDP is plotted in sequence.  Here, the jumps in the line show discontinuities between groups of countries with the growing peak at far right showing those few mega-rich states.

The data show that the world is clearly growing richer, but also that it is doing so at several speeds.  This should be no surprise.  It does, however, heighten inequality between countries.  Instead of being mostly poor and remaining that way, countries are growing richer, but at different rates.  While this is a good outcome, for some (cynics, realists, and opportunists) it is a second-best outcome after growing rich right now quicker than everyone else.  Also, while individuals may be content as they grow richer, inequality in progress alters regional and global power structures, which may have some disconcerting effects for zealots that will be manipulated by populists or opportunists.  Inequality may drive discontent and may drive conflict, even in a world that is getting richer across the board.

All data is from the IMF's World Economic Outlook dataset.

Distribution of Per Capita GDP at PPP in 1980, 1990, 2000, 2010, and 2015
Per Capita GDP at PPP Plotted Sequentially

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