Interdependence of world markets: Economic growth and social well-being

Abstract

This paper considers the socio-economic world context in 2009 and is aimed at achieving two goals: on one hand, to carry out an economic quantitative analysis of interdependence of the world markets; on the other hand, to investigate the relationship between economic growth and social well-being. In order to reach the first aim, we use, as a starting point, Wallerstein’s World Systems Theory (1982) presenting a hierarchical but unfixed division of the world in three levels ( core, semi-periphery and periphery ); then we consider a group of 124 countries and assign each of these country to one of the three areas. The assignment has been realized by looking at the total score achieved by each country, with the addition of the partial scores based on the position occupied in three different rankings which consider three distinct economic indicators each of them has been divided by the population size (real GDP, exports and debt-external). Therefore we proceed by reaching our second goal concerning the examination of the nature of the relationship existing between the level of each country’s participation in the world economy and its social well-being. We have decided to calculate the Physical Quality of Life Index (PQLI) in order to show the level of well-being gained by each country considered. The PQLI was created by M. D. Morris (1979) to satisfy the need of constructing new indexes to overcome the limitations of economic parameters for measuring human development, which were highlighted by the social indicators movement of the 1960s and by very important works produced by Amartya Sen (1985, 1987, 1999). The construction of PQLI for each country has given us the possibility of comparing the results of the first part of our work with those coming from the second part, in order to focus on the relationship between economic growth and well-being. The results obtained have further been underlined by using a selected group of 9 countries reflecting the main trends which characterize the entire group of countries. In conclusion, the findings of this study reveal that the relationship between a high level of economic growth and an advanced degree of social well-being is not necessarily a cause/effect relationship because it may not occur in consequence of historical, cultural, social and/or political contingencies.