1. Why are some countries rich/poor? How can we reduce poverty? What about Capitalism?

2. Joke of the Evening

5. Why are some countries rich/poor? How can we reduce poverty? What about Capitalism?

13. The Wealth of Nations

18. Economics for Leaders Area 10001500170018201900195220032008 Western Europe $427 $772 $997 $1,202 $2,892 $4,963 $19,912 21,672 USA 527 1,257 4,091 10,316 29,037 31,178 India 550 533 599 629 2,160 2,975 China 450 600 600 600 545 537 4,609 6,725 Africa 425 414 421 420 601 928 1,549 1,780 World 450 566 615 667 1,262 2,260 6,477 7,614 Real Gross Domestic Product Per Capita (1990 $) Sources: Development Centre Studies The World Economy: Historical Statistics, Maddison 2003. World Population, GDP and Per Capita GDP, 1-2003 AD, Maddison, 2007, http://www.ggdc.net/maddison/ and http://www.ggdc.net/MADDISON/oriindex.htm for 2008 data http://www.ggdc.net/maddison/http://www.ggdc.net/MADDISON/oriindex.htm

20. Source: World Bank Poverty Data www.worldbank.orgwww.worldbank.org

21. The number of extreme poor has declined by 740 million since 1981 What factors contributed to this decline? Poverty Fact

23. Source: World Bank Poverty and Inequality Database http://databank.worldbank.org/Data/Views/Reports/TableView.aspx (April 30, 2012) http://databank.worldbank.org/Data/Views/Reports/TableView.aspx Economic Growth offers a way out!

25. Economics for Leaders

26. Source: World Bank Poverty and Inequality Database http://databank.worldbank.org/Data/Views/Reports/TableView.aspx (April 30, 2012) http://databank.worldbank.org/Data/Views/Reports/TableView.aspx Some Good News in Africa

27. Institutions Matter Rule of Law Private Property Rights Open, Competitive Markets Entrepreneurship and Innovation Let’s define CAPITALISM as having the RIGHT INSTITUTIONS in place.

30. Economics for Leaders Institutions Shape Incentives Nobel Prize in Economics 1993 Douglass North

31. Institutional Variation

32. Economics for Leaders 32 Measurement: Fraser Institute Economic Freedom: Size of government and taxation Protection of private property and the rule of law Soundness of money Trade regulation and tariffs Regulation of business, labor and capital markets

33. Economics for Leaders 33 Background: Economic Freedom Project  25 year project  Transparency is a highly valued part of the project  Based entirely on third party data from World Bank, International Monetary Fund (IMF), Global Competitiveness Report, etc. (based on both objective and survey data)  They rank 144 countries representing 95% of the world’s population according to the extent to which they permit their citizens to be economically free

34. Economics for Leaders World Average Economic Freedom Over Time Source: The Fraser Institute, 2012

35. Economics for Leaders Per Capita Income and Economic Freedom Quartile Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013 Most Free ……………. Least Free

36. Economics for Leaders Growth in Developing Nations Per Capita and Economic Freedom Quartile Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013. Most Free ……………. Least Free %

37. Economics for Leaders Income Share of the Poorest 10% and Economic Freedom Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013. Most Free ……………. Least Free

38. Economics for Leaders Income of the Poorest 10% and Economic Freedom Sources: The Fraser Institute; The World Bank, World Development Indicators, 2012. Most Free ……………. Least Free

39. Economics for Leaders

40. Consider the “slice of pie” Source: World Development Indicators, 2011.

41. Economics for Leaders Economic Freedom and Poverty

42. Economics for Leaders Life Expectancy at Birth and Economic Freedom Quartiles Sources: The Fraser Institute; The World Bank, World Development Indicators, 2013. Most Free ……………. Least Free

43. Economics for Leaders Economic Freedom and Quality of Health Care, 2009

44. Economics for Leaders Literacy & Economic Freedom Quartiles (% of population) Male Female Most Free ……………. Least Free Sources: The Fraser Institute; World Development Indicators 2013

45. Economics for Leaders Economic Freedom and Educational Quality, 2009

46. Economics for Leaders Economic Freedom and Political Rights Low scores indicate high level of rights Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2013, available at http://www.freedomhouse.org/. Most Free ……………. Least Free

47. Economics for Leaders Economic Freedom and Civil Rights Low scores indicate high level of rights Most Free ……………. Least Free Sources: The Fraser Institute; Freedom House, Freedom in the World Country Ratings, 2013, available at http://www.freedomhouse.org/.

48. Economics for Leaders Economic Freedom and Corruption High scores indicate low corruption Sources: The Fraser Institute; Transparency International, Corruption Perceptions Index, 2012 available at http://www.transparency.org. Most Free ……………. Least Free

49. Economics for Leaders Overall Economic Freedom Index and the Bottom 10 Source: The Fraser Institute, 2012

57. Economics for Leaders The Big Picture Until the 1750’s extreme poverty was the standard for all of human history. Since 1750 economic growth has lifted large sections of humanity to levels of wealth unheard of previously. The engine of economic growth is reducing poverty rates worldwide. Capitalism consists of institutions that help promote economic growth.

59. Economics for Leaders Consumer durables Available to % of non-poor people in U.S. population Available to % of poor people in U.S. population Refrigerator99.498.5 Stove99.197.0 Color television99.197.4 Telephone91.979.8 Washing machine86.268.7 Clothes dryer83.861.2 Microwave97.191.2 Dishwasher67.536.7 Freezer38.125.1 VCR93.383.6 Air conditioner86.678.8 Personal computer70.242.4 Source: U.S. Census Bureau, Survey of Income and Program Participation, 2004 Panel, Wave 5 Internet Release date: November, 2009.

69. Economics for Leaders Hans Rosling 200 Countries 200 Years, 4 minutes http://www.youtube.com/watch?v=jbkSRLYSojo

70. What is Challenge Week? Live on two dollars a day and follow other RULES for a week, and record your experiences for others to read. Fundraise for economic development as you abstain from purchasing goods. Why Participate Begin to understand firsthand the hardship that half the world's population endures. Nurture a new respect for impoverished persons. Participants have many reactions throughout Challenge Week as demonstrated in these blog entries from past years. Students face additional, unexpected obstacles and struggle with the emotional discomforts of "playing poverty." http://www.twodollarchallenge.org/ The Two Dollar Challenge