EA - Visualizing the development gap by Stephen Clare

Link to original articleWelcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Visualizing the development gap, published by Stephen Clare on December 7, 2022 on The Effective Altruism Forum.Lazarus Chakwera won Malawi’s 2020 Presidential election on an anti-corruption, pro-growth platform. It’s no surprise that Malawians voted for growth, as Malawi has been called the world’s “poorest peaceful country”. According to Our World in Data, the median income per day is $1.53, or about $560 per year. Real GDP per capita has grown at an average rate of just 1.4% per year since 1961 and stands today at $1650 per person (PPP, current international $). Furthermore, the country has yet to recover from an economic downturn caused by the Covid-19 pandemic, leaving GDP per capita only slightly higher than it was in 2014.Life on $560 a year is possible, but not very comfortable. A sudden illness, accident, or natural disaster can be devastating. Even after spending almost all one’s income, many of one’s basic needs remain unmet. Investments for one’s future, including education and durable goods, are mostly out of reach. Life satisfaction in countries where incomes are so low is poor.We know that it’s not fair some people have to make do with so little. In the U.S., the poverty threshold, below which one qualifies for various government benefits to help meet basic needs, is $26,200 for a family of four, or $6625 per person. That makes it almost 12 times higher than the median Malawian income. (All of these international comparisons are adjusted for purchasing power.)Let that sink in. The majority of Malawians don’t earn one-tenth of the amount of money below which we, in a high-income country, think one should get help from the government. And of course, the same is true in most countries. If we applied the U.S. poverty line around the world, we would see that most people just don’t have enough money to meet all their basic needs.That’s why finding ways to speed up development in low-income countries would be a huge win for philanthropists, policymakers, and citizens alike. Unfortunately, we haven’t made much progress towards this goal.In this post, I give a sense of why it’s important for EAs to think about broad economic growth in lower income countries. I do this by showing how long it will take Malawi to catch up to where a high-income country like the United States is at today. In short, at typical growth rates, it will take a depressingly long time: almost two centuries. Sparking a growth acceleration, like what India has experienced in recent decades, would help a bit, but it would still take many decades for Malawi’s economy to grow to the point that most Malawians can afford a reasonable standard of living.These calculations should help deepen one’s understanding of the development gap: the difference in living standards between high- and low-income countries. The implications for global development advocates are obvious. But I also think longtermists should pay attention. First, the wellbeing of billions is not unimportant from a longterm perspective – it’s just that future wellbeing matters as well. Second, I think speeding up development would help more people from lower-income countries access the educational and professional opportunities they need to participate in what could be humanity’s most important century.Growth trajectories for MalawiOne way to visualize the development gap is to think about how long it will take a country like Malawi to reach various benchmarks. To that end, let's consider a few different growth trajectories. I’m going to continue to refer to Malawi specifically, but one could similarly visualize any country. What matters is just the starting income and the growth rate.First, what if Malawi continued to grow at 2% per year, roughly as it has in recent decades? At this rate, it would take a shocking 105 years ...