1. When can we say than one society is better than another ? Nicolas Gravel (CSH -Delhi & IDEP-GREQAM (Marseille, France)

2. « The importance of the formal results lies ultimately in their relevance to normal communication, and to things that people argue about and fight for » Amartya K. Sen

3. What are the things that people argue about and fight for ? People argue about and fight for the defense of their private interest (much too often perhaps) People argue about and fight for the construction of a « better » world A better world = a world with less suffering, less exploitation, more…justice

4. What are the things that people argue about and fight for ? People argue about and fight for the defense of their private interest (much too often perhaps) People argue about and fight for the construction of a « better » world A better world = a world with less suffering, less exploitation, more…justice

5. What are the things that people argue about and fight for ? People argue about and fight for the defense of their private interest (much too often perhaps) People argue about and fight for the construction of a « better » world A better world = a world with less suffering, less exploitation, more…justice

6. What are the things that people argue about and fight for ? People argue about and fight for the defense of their private interest (much too often perhaps) People argue about and fight for the construction of a « better » world A better world = a world with less suffering, less exploitation, more…justice

7. What are the things that people argue about and fight for ? People argue about and fight for the defense of their private interest (much too often perhaps) People argue about and fight for the construction of a « better » world A better world = a world with less suffering, less exploitation, more…justice

8. « Justice is the first virtue of social institutions, as truth is of systems of thought. A theory however elegant and economical must be rejected or revised if it is untrue; likewise laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust. » John Rawls

9. But what is justice ? When can we say that a particular social arrangement is « just » and another « unjust » ? When can we say that a social institution is more just than another ?

10. Purpose of the talk To present answers proposed by economists to answer these questions More specifically, to present methods used by economists to compare societies on the basis of their performance in achieving justice Methods discussed here are robust

11. Comparing societies ? Comparing two different societies at a given moment (is France more just than the US ?) Comparing a given society at different points of time (is India better now than fifteen years ago ?) Comparing a society after a tax reform with the same society without the tax reform etc.

12. Comparing societies ? Society = A list of individuals Approaches focus on specific attributes of these individuals Attributes: Income, health, education, access to public good, etc. Comparing societies amount to comparing distributions of these attributes across individuals

13. Robust methods of normative appraisal ? Method: we want it to be routinely and « easily » implementable Based on explicit ethical principles Robustness: ethical principles that justify the methods are widely acceptable Price to pay for robustness: Incompleteness. The methods may fail to provide a firm answer to the questions above.

14. Comparing societies: some examples Comparing 12 OECD countries (+ India) based on their distribution of disposable income and some public goods Sample of some 20 000 households in each country Disposable income: income available after all taxes and social security contributions have been paid and all transfers payment have been received Incomes are made comparable across households by equivalence scale adjustment Incomes are made comparable across countries by adjusting for purchasing power differences

15. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

16. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

17. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

18. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

19. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

20. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

21. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

22. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

23. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

24. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

25. AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735

27. What are these data saying on justice ? Except for the 10% poorest, americans in every income group have larger income than French, swedish and German. Does that mean that US is a « better » society than UK, France, or Sweden ? Americans in every income group have larger income than British, Australians, Italians, spanish and Indians. Does that mean that US is a better society than UK, Australia, Italy, Spain or India ? It would seem so if income was the only relevant attribute. But is that so ?

28. Another attribute: regional infant mortality Infant mortality (number of children who die before the age of one per thousand births) is a good indicator of the overall working of the medical system of the region where individuals live How do countries compare in terms of the different infant mortality rate that they offer to their citizens on the basis of their place of residence ?

33. Other attribute: average class size in public schools How do the countries compare in terms of the distribution of the class sizes at public school ? Class size: a good indicator of the school quality

35. General principles that can be derived from these comparisons Countries differ by the total amount of each attribute they allocate to their citizens :« size of the cake » They also differ by the way they share this cake Less obviously, they also differ by the way they correlate the attribute between people between the different attributes

36. 2 cakes of different sizes: US & Sweden US Sweden

37. Sharing the US cake

38. Sharing the Swedish cake

39. Our ethical principles will consider that: For a given distribution, a larger cake is better than a smaller one Given the size, a « more equal » distribution of the cake is better than a less equal one. Given sizes and distributions, less correlation between cakes is better

40. What is justice ? A welfarist answer (1) Welfarism: The only thing that matters for evaluating a society is the distribution of welfare – happiness - between individuals A just society is a society that maximises a function of individual happiness Philosophical foundations: Hume, Bentham, Beccaria

41. What is justice ? A welfarist answer (2) Fundamental assumption: individual happiness can be measured and compared We don’t need to know how to measure happiness but we have to accept the idea that we can measure it in a meaningful way. Individual welfare is assumed to depend upon the individual attributes The relationship between welfare and attributes is assumed to satisfy basic properties

42. Specifically, we assume: Happiness is increasing with respect to each attribute (more income makes people happier, so does more health, smaller class sizes, etc.) The extra pleasure brought about by an extra unit of an attribute decreases with the level of the attribute (a rich individual gets less extra pleasure from an additional rupee than an otherwise identical poorer individual) The rate of increase in happiness with respect to a particular attribute is decreasing with respect to every other attribute

43. Which function of individual happiness should we maximize ? Classical Utilitarianism (Bentham): the sum Modern view point: a function that exhibits some aversion with respect to happiness- inequality Extreme form of aversion toward happiness- inequality (John Rawls): Maxi-Min, we should focus only on the welfare of the less happy person in the society.

44. Contrasting Maxi-min and Utilitarianism

46. sum of income is larger in US than in UK and in UK than in France

47. Contrasting Maxi-min and Utilitarianism sum of income is larger in US than in UK and in UK than in France but the poorest individual is richer in France than in the US or in the UK

48. To sum up, for welfarism: 1: A society = a list of combinations of observable attributes (one such combination for every individual) 2: Each combination of attributes is transformed into (unobservable) happiness 3: Societies are compared on the basis of their distributions of happiness

49. Society A is better than society B if the distribution of happiness in A is considered better than that in B by any function that exhibits aversion to happiness-inequality, under the assumption that the relationship between unobservable individual happiness and obervable individual attributes satisfies the above properties (Welfarist dominance)

50. When can we say that one society is better than another ? (the one attribute case) n individuals identical in every respect other than the considered attribute (income) y = (y 1,…,y n ) an income distribution Q: When are we « sure » that y is « more just » than z ?

51. Anwer no 1: Mana and Robin Hood When y has been obtained from z by giving mana to some, or all, the individuals When y has been obtained from z by a finite sequence of bilateral (Robin Hood) transfers, each transfer taking place between a donator that is richer than the recipient, and each transfer being insufficient to reverse the ranking of the donator and the recipient. When y has been obtained from z by both manas and Robin Hood transfers

52. Mana ?

54. Robin Hood and Mana ?

62. Answer no 2: Poverty dominance Important issue: poverty How do we define poverty ? Basic principle: You define a (poverty) line that partition the population into 2 groups: poor and rich

63. 2 measures of poverty 1) Headcount: Count the number (or the fraction) of people below the line 2) poverty gap: Calculate the minimal amount of money needed to eliminate poverty as defined by the line

64. Contrasting headcount and poverty gap AustraliaAustriaCanadaFranceGermanyItalyPortugalSpainswedenSwitz.UKUSAIndia 473368154285617058553554254627475808867948985403789 92371073089779555100126575460254079056146158598110251019 1179512850119351179312024805961107045105401733410883146871168 1458014725143381344113229943875498646119821980613337181421309 173771658816839150921485710933866610113133712204415854215811462 2045618665194941696616614126291002811656147232455418579252061649 2420320921223821916918376147691141513639161472769621574293871859 2846724042259552238221221173421393016535181403209525188348192167 3459228069309582683425201207431811320968210913825430190433732694 5453738539444574017539217311743204735457308186184949022790304735 Line = 9 600 There are 2 poor in France and 1 poor in germany but poverty gap in Germany is 3745 while it is only 3475 in France

65. Poverty dominance Problem with poverty measurement: how do we draw the line ? Criterion: society A is better than society B if, no matter how the line is drawn, poverty is lower in A than in B for the poverty gap (poverty gap dominance)

66. Answer no 3: Lorenz dominance Lorenz dominance criterion: Society A is better than society B if the total income held by individuals below a certain rank is higher in A than in B no matter what the rank is. Easy to see with Lorenz curves. Let us draw Lorenz curves with our data.

68. Cool! the 3 answers are all equivalent to the welfarist dominance answer It is equivalent to say : society A is more just than society B for any welfarist ethics One can go from B to A by a finite sequence of Robin Hood transfers and/or mana Poverty gap in A is lower than in B for all poverty lines Lorenz curve in A is everywhere above that in B.

69. This result is a beautiful one Comes from mathematics: Hardy, Littlewood & Polya (1936), Berge (1959), Adapted to economics by Kolm (1966;1969), Dasgupta, Sen and Starett (1973) and Sen (1973) It provides a solid justification for the use of Lorenz curves

70. Lorenz dominance chart SwitzerlandUS UK Australia Canada Austria FranceGermany Sweden Italy Spain Portugal India

71. Methodology can be extended to many attributes Same welfarist ethics Suitable generalization of poverty notions (poverty in several dimensions) No Lorenz curves New issue: Correlation between attributes

72. Aversion to correlation ? Literacy rate (%) Income (rupees/month) 400 700 40 70 500 60 50 600 a red society

73. Aversion to correlation ? Literacy rate (%) Income (rupees/month) 400 700 40 70 500 60 50 600 a red society and a white society

74. Aversion to correlation ? Literacy rate (%) Income (rupees/month) 400 700 40 70 500 60 50 600 a red society and a white society white society is more just

75. Bidimensional dominance chart Switzerland US UK AustraliaCanada Austria France Germany Sweden Italy Spain Portugal India