Miserly Developments

We propose a new index called the miser index. It builds on a measure of the degree to which extreme poverty is unnecessary, but yet persists. The index is a proxy for the implicit social attitudes that allow poverty in the midst of affluence. It attaches a weight to the relative number of people below the poverty line. The weight measures the extent to which poverty is unnecessary. Multiplied by the actual number of poor people as a fraction of the total population we obtain an indication of revealed miser attitudes. We use the index to rank developing countries according to their revealed miser tendencies. We find that high poverty persists in many countries where it is inexpensive to reduce it. These miserly countries tend to be socially fractionalized, bureaucratically inefficient and politically corrupt. They provide their citizens with a low level of heath care and education. Democracy is no guarantee against such miser attitudes, and many countries with high growth tend have a miserly development. This is also true for the world as a whole where we find a dramatic rise in global miserliness over the last 30 years.