The Count

[editor's note: The Count would like to apologize for failing to count during his regularly scheduled counting time.]

0.84, 1.15, 2.7, 5.94...

...is the percent of GDP it would cost to transfer one poverty line to poor children in Chile, Brazil, Venezuela and Bolivia, respectively. Yes indeed, as promised, here's another excerpt from ECLAC's new report, showing that the relative cost of eliminating childhood poverty is rather low and well within reach.

The graph below shows the result of a simulation estimating the cost of transferring the income equivalent of one poverty line to children around or younger than five years old. The yellow line shows the estimates for every child and the blue line shows the costs for only children from vulnerable households. Also, as can be seen, the relative cost is lowest in countries with a higher level of development.

[Cost of transferring one poverty line to children younger than 5, around 2008, in percent of GDP]

Quite astoundingly, Chile could transfer enough money to eliminate poverty for every child with just 0.84 percent of GDP. Even Bolivia, with a far lower level of development, could theoretically get rid of poverty with a relatively small 5.94 percent of GDP.

Of course, this type of exercise is a pure abstraction and takes for granted all sorts of institutional and implementation hurdles. But it's certainly food for thought, no?

ECLAC's Time for Equality

A couple weeks ago maladjusted gave you a sneak peek of ECLAC's new document "The Time for Equality," outlining a regional agenda to promote social equality. Well, the final version is now out and it's safe to say it's a must read for anyone interested in the state of development in Latin America and where the region might be going in the future. This ambitious document is essentially a development blueprint for the region calling for a return of the State as a leading actor in the promotion of economic development and social equality.

The full report comes in at a whopping 290 pages, so this one will take a bit to digest since clearly I can't do justice to this high quality and book-length document in a single post. But you can be sure the Count will soon share many of its insights.

But in the meantime I'll leave you with a simple question included in the report: why equality and why now?

• equality is tremendously important for social cohesion. When wealth is concentrated and growth isn't shared broadly an "expectations gap" is created that "increases social conflict, which erodes government legitimacy and threatens the sustainability of growth."

• equality is more conducive to "authentic competitiveness." Which is to say that there are large long-term productivity gains from an egalitarian society in which everyone has the opportunity to make use of their talents and labor and the environment aren't over exploited. "In the long-run there's a virtuous circle between smaller social gaps, smaller productivity gaps and a more dynamic and sustainable growth. The evidence is conclusive, in the sense that economic development and social equality tend to converge."

• the experience of the recent crisis suggests that highly unequal societies that are overly dependent on financial sectors tend to be more volatile and carry significant costs in terms of poverty and general welfare.

In any case, this is all just a really tiny flavor of all the good stuff included in the document, so I strongly urge all of you to check it out (no english version yet, but it should be out soon).