Abstract
The subjective well-being approach to the valuation of international development is applied to the Millennium Development Goals (MDGs). Results indicate that the rich countries have particular preference for education, healthcare, and housing; they are willing to accept compensation for a failure to meet the three targets by 2015. The poor countries view all the MDGs as important; they are willing accept compensation for a failure to achieve all the targets by 2015. Results also indicate that what the poor countries are willing to accept in terms of compensation matches the amount that would have been the pledge of 0.7% proportion of incomes of the rich countries for international aid. These findings imply that the MDGs can be accomplished at an affordable cost.
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Notes
Given the contrast in the philosophies with regards to utility, research on subjective well-being deepened in areas outside of economics. See Diener (1984) and Diener et al. (1999) for reviews in psychology and Michalos (1980) for reviews in political science. Economics started to look more into subjective well-being in the 1990s starting with Clark (1997); Frank (1997); Ng (1997), and Oswald (1997), or two decades after Easterlin (1974). Recent public policy initiatives include the Commission on the Measurement of Economic Performance and Social Progress. See http://www.stiglitz-sen-fitoussi.fr/en/
Ferrer-i-Carbonell and Frijters (2004) find that using an ordinal or cardinal assumption in the analysis does not alter the quality of the results.
Based on the survey documentation, the MDGs were not asked in all the countries covered in World Values Survey 2005. Only five goals were asked in the survey and in sixteen countries: Brazil, Burkina Faso, Ethiopia, Finland, Germany, Japan, Mali, Norway, Rwanda, South Africa, Sweden, Switzerland, Thailand, Turkey, United States, and Zambia.
Among the rich countries, the five MDG items were asked in Finland, Germany, Japan, Norway, Sweden, Switzerland, and United States. In this paper, Norway was the random choice to represent the Scandinavian countries and the United States was the random choice to represent Germany and United States.
Between 1990 and 2005, international aid from the rich countries averaged 0.405% of GDP, roughly 60% of the commitments to provide 0.7% of GDP to international aid. The figures are much lower for international aid to the least developing countries, which averaged 0.124% in the same period. Even before 2008, international aid of the rich countries merely averaged 0.41% of their GDPs. In 2000, Denmark, Luxembourg, Netherlands, Norway, and Sweden were the only countries that fulfilled their international aid commitments of 0.7% of GDP for international aid. The same countries fulfilled their aid commitments in 2009. Data from the United Nations indicate that Luxembourg, Norway, and Sweden allocated more than 1% of their GDP to international aid.
The five MDG items were asked in Burkina Faso, Ethiopia, Mali, Rwanda, South Africa, and Zambia. Since South Africa is already a middle income country, it was excluded from the poor African countries grouping. Random selection of countries for this paper meant that Burkina Faso was not included in the final group. The poor countries in Asia were not part of World Values Survey 2005.
In addition to South Africa, three other middle income countries had responses to five MDGs: Brazil, Thailand, and Turkey. These countries are too diverse to comprise what can be considered a “homogenous” group even in terms of standards of living. Still, there was an attempt to analyze the data but the regressions provide little useful results. Four of the five MDGs (i.e., except MDG1: extreme poverty) came out to be statistically not significant.
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Appendix
Appendix
1.1 Comparative Estimates using Results from the Basic and Robustness Regressions
The main regressions (Tables 4 and 5) described in the paper are complemented with results for robustness checks (Tables 6 and 7). For the robustness checks, political indicators are added with “citizenship” as the proxy measured at three levels: local, national, and global. Data are responses to the question: “People have different views about themselves and how they relate to the world. Using this card, would you tell me how strongly you agree or disagree with each of the following statements about how you see yourself? [1] I see myself as a world citizen; [2] I see myself as part of my local community; [3] I see myself as part of [country name]” (numbering mine). The person responds using a 4-point scale with 1 as ‘strongly agree’, 2 ‘agree’, 3 ‘disagree’, and 4 ‘strongly disagree.’ The responses ‘strongly agree’ and ‘agree’ are recoded as 1 and then the responses ‘disagree’ and ‘strongly disagree’ are recoded as 0. The effect is to transform citizenship replies into dummy variables. Citizenship data are available only in the World Values Survey 2005.
The findings on the robustness test can be summarized as follows. Belongingness at any of the three levels of political citizenship is positively correlated with subjective well-being, except for a negative correlation in the poor countries. The finding is, perhaps, unique to the poor societies of Africa where extreme poverty are concrete and tangible at the local level so much so that people are beginning to not identify with their own communities. Citizenship at the national-level is statistically significant only in the poor countries, perhaps a reflection of a sense of duty and identification with a larger tribal- or ethnic-nation together with the collective experience of extreme poverty. The most encouraging finding on citizenship is that people in both the rich and poor countries see themselves as global citizens, which thus suggests a sense of belongingness to something larger than oneself or country. This finding says that, at the very least, people share a common identity—regardless of age, gender, ethnicity, social standing, and so on—as citizens of the Earth. Therefore, there is hope that people can work together to solve global initiatives like the MDGs. What may be needed is to galvanize people so they take part in such global project.
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Beja Jr., E.L. Subjective Well-Being Approach to the Valuation of International Development: Evidence for the Millennium Development Goals. Soc Indic Res 111, 141–159 (2013). https://doi.org/10.1007/s11205-011-9987-2
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DOI: https://doi.org/10.1007/s11205-011-9987-2