Gross national product/capita

These maps show the changing distribution of Gross National Product/capita. Gross National Product is the total value added from domestic and foreign sources claimed by residents of a country. In other words it is GDP (Gross Domestic Product, the value of goods and services produced within a country) plus net income received by residents from non-resident sources. GNP/capita is the total divided by the number of people in the country. In other words, GNP/capita is a measure of national income per person.

What the maps suggest

This sequence of maps suggests that the global pattern of national income has remained remarkably stable in the period 1960-99. There is a below $2 per day region of the world, including most of Africa and Asia. Then there is a high-income group, with GNP/capita exceeding $10,000 per year, which includes the industrialized north of the globe and Japan, primarily the OECD countries. In between, there are the countries of Latin America, some countries in North and South Africa, and since 1990 (when data becomes available), most of eastern Europe in a range of middle incomes, with GNP/capita in the range $730 to $10,000.

This stable pattern of income ratios is disrupted primarily by one region. In South East Asia, the ‘East Asian Miracle’ economies have managed to move out of the $1 per day group and into the middle income range. The East Asian miracle countries started as a group of four: South Korea, Taiwan, Hong Kong and Singapore. World Bank (1993) suggests inclusion of Malaysia, Thailand, Japan, Indonesia. In the 1990s, China is also recorded as making a similar shift from $1 per day to middle income.

The Data

There are several different ways of comparing GNP/capita. In this set of maps, GNP/capita is measured in constant 1995 US dollars. This means that national incomes are compared using foreign exchange rates (rather than the purchasing power of local currency; see also purchasing power parity). We have a separate presentation looking at GDP/capita measured using purchasing power parity. Constant dollars means that an attempt has been made to remove the effects of changes in the value of money from these data. These data come from the World Bank's World Development Indicators 2001.

Data intervals

The data are plotted using these intervals.

Less than $1 per day ($365 per person each year) is widely used as a global standard of absolute poverty. (Some problems with the use of GNP/capita as a measure of individual poverty are noted below). The World Bank says this level is the median of the ten lowest national poverty lines (World Bank 2001: Box 1.2). It is used here as a graphic indication of low levels of productivity, and one that is increasingly widely used. The World Bank uses $2 per day as a reflection of poverty lines of lower-middle income countries.

The remaining intervals are arbitrary but recognizable cut off points. For comparison, the World Bank used these intervals as its categories in its World Development Report 2000:

Problems of using GNP/capita as a poverty line

GNP/capita is a measure of average national output. There are at least two kinds of problems with this as a measure of individual incomes:

1. Problems of measurement. Non-monetized activities may be poorly estimated (eg the products of peasant agriculture) or excluded (eg domestic work maintaining the home).
2. Problems of conceptualization. GNP/capita is a simple average of output divided by number of people. So it does not say anything about the distribution of national income between rich and poor.

What we can say is that GNP/capita provides a rough estimate of average national productivity and national productivity sets bounds on average living standards.

References

World-Bank (1993). The East Asian Miracle: Economic Growth and Public Policy. Oxford, Oxford University Press.

World-Bank (2000). World Development Report 2000-1: Attacking Poverty. Washington DC: World Bank.

World Bank. (2001). World Development Indicators. Washington DC: The World Bank.