Why Are We Worried About Income? Nearly Everything that Matters is Converging.

It should be noted that if global income statistics were reported in a different manner, they would also show evidence of convergence. Across countries, the percentage of populations living on above a dollar a day on a population-weighted measure is converging —so fast that the Millennium Development Goal of halving the world population living under that income measure has already been met. This example also points up that we are more likely to see convergence in variables where there is an upper bound that many countries have already reached (100% of the population living above a dollar a day in this case). Nonetheless, the convergence results reported at the least suggest progress on these indicators of the quality of life which is widespread.

The broad picture of success painted by these and other statistics presented here may suggest new life for currently unfashionable drivers of development. Even if the state, or aid, or globalization, or the Washington Consensus has not had much success in promoting convergence in incomes toward OECD levels, any or all of them might be able to take some credit for quality of life convergence.

Much of the development debate recently has been motivated by the idea that we are failing—developing countries are being left behind and 40 years of state action and foreign aid has done nothing to help that. A broader measure of quality of life should perhaps make us look at the Third World “failures” a little differently. Other quality of life gaps were never as bad for other variables as they were for income—the income measure has always overplayed the difference between India and the United States. Further, and despite the tragedy of AIDS and looming environmental catastrophes, it appears difficult to argue with the statement that quality of life has improved over the past 50 years worldwide and that, for 50 years and sometimes longer, it has improved more rapidly in the developing world than in the developed world. Comparing India to the United Kingdom and United States, for example, convergence began sometime prior to 1950 for literacy and life expectancy and prior to 1913 for primary education. If we are concerned about broader quality of life measures, then, developing countries may have seen their performance excessively maligned (along with inter-war colonies and international donor agencies, perhaps).

The evidence presented above also suggests something about the nature of that success. There has been convergence across a wide range of indicators of the quality of life. Given that there has not been convergence in the standard income indicator, this may suggest that income is only one among a number of factors in determining quality of life outcomes. In turn, this suggests some hope that improvements can be sustained even in the absence of sustained income growth.

The extent of the role that governments have had to play in improving quality of life remains arguable. Literacy appears to be an important factor and government efforts to expand schooling must have played a role here. It seems plausible to argue that even though some government health expenditure is wasted, efforts to (for example) spread vaccines and improve primary care can have a significant payoff.

Whatever the role of government, literacy and vaccine programs surely helped only in combination with technologies that the skill of literacy or the vaccine programs helped to spread. These technologies, which appeared to have done little in increasing Third World income, have at least improved other measures of the quality of life. Given the role that globalization has been argued to play in transferring technology it may be that, along with government, globalization has been too quickly dismissed by some as a driver of development.

As a final thought, the results presented here may suggest lessons for the Millennium Development Goals for quality of life in developing countries. On a positive note, the MDG approach of moving beyond income measures as indicators of progress on development is strongly endorsed by the results presented here.

If income (and direct expenditure) is less relevant than commonly assumed for meeting quality of life targets, this also suggests that financial calculations regarding costs for improvements in the quality of life may be of limited utility, however. For example, quality of life convergence makes it possible to question the accuracy of exercises that ask “how much to meet the Millennium Development Goals.”—it may be that progress (at least on the nonincome dimensions) will be driven rapidly by convergence and less by transfers which may only be marginally related to quality of life outcomes.