In this study entitled "Constructing a Social Welfare Function under Poverty and Inequality with Application to Developing Countries"; prepared by Nyiwul Linus Mabughi under the supervision of Dr. Tarek Selim (The American University in Cairo), we provide a post-Sen theoretical conceptualization of a social welfare function and application to developing countries. In the methodology, we undertake a decomposition of efficiency and distribution aspects of welfare and examine the sensitivity of the various elements of the social welfare formulation. We develop a new social welfare .. function based on different ec9nomic development elements. These elements include per capita income (PPP), total expenditures needed to eradicate poverty, gender development, income inequality and a set of social entitlements. The newly devised social welfare function is applied to 79 developing countries. The core findings indicate that income alone cannot fully explain changes in social welfare; it only explains about half of the changes in welfare in the spectrum of developing countries considered. On the other hand, there is a maximum limit to improvements in social welfare even if the poverty problem is completely solved. Social welfare is highly sensitive to gender development due to positive externalities to younger generations and participation. Inequality reduces welfare especially if it is initially low. Among the set of social entitlements considered in this study, access to improved water sources was found to be the most sensitive resource to welfare in terms of resource scarcity. However, in terms of resource exhaustion, life expectancy was found to be the most sensitive. Overall, the importance of efficiency increases at the expense of distributive issues.
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MA in Economics
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Adel A. Beshar
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(2004).Constructing a social welfare function under poverty and inequality with application to developing countries [Thesis, the American University in Cairo]. AUC Knowledge Fountain.
Mabughi, Nyiwul Linus. Constructing a social welfare function under poverty and inequality with application to developing countries. 2004. American University in Cairo, Thesis. AUC Knowledge Fountain.
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