the oxford measure − of capability to pay 2012 ecbi fellowships benito m üller
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ecbi. The Oxford Measure − of Capability to Pay 2012 ecbi Fellowships Benito M üller. european capacity building initiative initiative européenne de renforcement des capacités. for sustained capacity building in support of international climate change negotiations - PowerPoint PPT PresentationTRANSCRIPT
european capacity building initiative ecbiThe Oxford Measure −
of Capability to Pay2012 ecbi Fellowships
Benito Müller
european capacity building initiativeinitiative européenne de renforcem
ent des capacités ecbi
for sustained capacity building in support of international climate change negotiationspour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques
european capacity building initiative ecbi
Capability as Ability to Pay − A Taxation Model
Capability = Gross Capability minus Capability AdjustmentCk = GCk − Cak [cu : capacity unit]
taxable income = gross income minus tax allowances
Tax Liability vs Charity
Gross Capability Axioms (gdp = GDP/cap)
If gdpk = gdpm then GCk : GCm = GDPk : GDPm
If GDPk = GDPm then GCk : GCm = GDPk : GDPm
european capacity building initiative ecbi
Capability as Ability to Pay − A Taxation Model
Homogeneous World Solution (gdpk ≡ gdpm )
Gross Capability = National IncomeGCk ≈ GDPk
Oxford Gross CapabilityGross Capability = Progressively weighted National Income:OGCk = γk × GDPk, with γk = gdpk / gdpworld [cu/$]
european capacity building initiative ecbi
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
-$1,000
$1,000
$3,000
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000GDP (2009 $ PPP)
GDP ($PPP, 2009) per capita
World per capita G
DP (2009): $10’643
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000GDP and Gross Capabilities
GDP ($PPP, 2009) per capita
Gross Capability Examples
european capacity building initiative ecbi
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
-$1,000
$1,000
$3,000
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000GDP (2009 $ PPP)
GDP ($PPP, 2009) per capita$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000 Gross Capabilities
GDP ($PPP, 2009) per capita
World per capita G
DP (2009): $10’643
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
-$5,000
$5,000
$15,000
$25,000
$35,000
$45,000
$55,000
$65,000GDP and Gross Capabilities
GDP ($PPP, 2009) per capita
γEU = 3.0
γJP = 3.0
γCH = 0.6
γIN = 0.3
γUS = 4.3
Gross Capability Examples OGCk = γk × GDPk, [γk = gdpk / gdpworld ]
european capacity building initiative ecbi
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
-$1,000
$1,000
$3,000
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000GDP (2009 $ PPP)
GDP ($PPP, 2009) per capita$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000 Gross Capabilities
GDP ($PPP, 2009) per capita
Gross Capability Examples OGCk = (γk)δ × GDPk, δ ≥ 0
0
1
2
3
4
5
6
7
8
9
US (γ = 4.3)
EU; Japan (γ = 3.0)
γδ
China (γ = 0.6)
India (γ = 0.29)δ
european capacity building initiative ecbi
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
Gross Capability (δ = 0)
GDP ($PPP, 2009) per capita
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
Gross Capability (δ = 1)
GDP ($PPP, 2009) per capita
Gross Capability Examples
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
Gross Capabilities (δ = 0.8)
GDP ($PPP, 2009) per capita
OGCk = (γk)δ × GDPk, δ ≥ 0
Reference level
european capacity building initiative ecbi
Oxford Measure − Capability Adjustment
Capability = Gross Capability minus Capability AdjustmentAdjustment for what?The size of the domestic poverty problem
• Poverty Capability Adjustment PCAk
Measuring the size of the poverty problem − two dimensions:• Poverty Headcount PHk [number of poor people]
• Poverty Intensity Index: PIk [scalar]
• Global Poverty Capability Allowance Π [cu/person]• Differentiated Poverty Capability Allowance Πk = Π × PIk [cu/person]
PCAk = Πk × PHk [cu]
Multidimensional Poverty Index: MPIk [scalar]
PCAk = Π × Pk × MPIk , with Pk = population
european capacity building initiative ecbi
Oxford Measure − Global Capability Allowance ΠPoverty Capability Adjustment = Global Capability Poverty Allowance (Π) × Population × Multidimensional Poverty Index
PCAk = Π × Pk × MPIk ,
Zero Capability Allowances (ZCAk)
OCMk = OGCk − Π × Pk × MPIk
0 = OGCk − ZCAk × Pk × MPIk
Π =def 3 × ZCALDC
$0 $1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
LDCs Africa(-)
GDP ($PPP, 2009) per capita
Vanuatu
Bhutan
LDC average (ZCALDC)
3 × ZCALDC
Namibia
Swaziland
Angola
Congo
Africa(-) = Sub-Saharan w/o South Africa
Zero Capability Allowances
european capacity building initiative ecbi
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
Gross Capability (δ = 1)
GDP ($PPP, 2009) per capita
Gross and Net Capability Examples
$0 $5,000$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000
Gross Capability (δ = 0)
$0 $10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Net Capability (δ = 1; Π = 3×ZCALDC)
Reference level
european capacity building initiative ecbi
Net Capability: Sensitivity to Choice of Poverty Allowance Π
Cap
abili
ty In
tens
ity (O
CM
k /G
DP k)
Poverty Allowance Π = ZCALDC ×
LDC
1 2 3 4 5 6
92%
94%
96%
98%
100%
102%
104%
106%
0 1 2 3 4 5
-300%
-200%
-100%
0%
100%
200%
300%
400%
Slope = ̶ Poverty Intensity −(Poverty Headcount × Poverty Intensity)/GDP
−(PHk × PIk )/ × GDPk
european capacity building initiative ecbi
Oxford Measure: Capability Headroom
$0 $500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
1
10
100
1,000
GDP ($PPP, 2009) per capita
LDC aggregate
% (L
og s
cale
)
Djibouti 9%
δ = 1, Π = 3 × ZCALDC
Capability Headroom = − Capability/GDP [%] (for countries with negative capability)
Burundi 666%
european capacity building initiative ecbi
Oxford Measure − Sample Capabilities I
Non-zero C
apability
Zero Capability
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000 GDP ($PPP, 2009) per capita
Cap
abili
ty
EU
US
China
South Africa
Brazil
IndiaLDC aggr.
Russia
Saudi
JapanCanada
AustraliaSwitzerland UAE
δ = 1, Π = 3 × ZCALDC
european capacity building initiative ecbi
Oxford Measure − Sample Capabilities II
Non-zero C
apability
Zero Capability$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
GDP ($PPP, 2009) per capita
China
Ethiopia Bangladesh
PakistanNigeria
Brazil
RussiaSpain
S. Korea
Mexico
TurkeyPoland
ArgentinaS. AfricaThailand
India
LDC Aggregate
Malaysia
Saudi
Czech R.
Greece
Belgium
Sweden
Canada
Australia
Netherlands
SwitzerlandUAE
IndonesiaEgypt
UkraineColombia
Kazakhstan
Italy
Austria
UKFranceδ = 1, Π = 3 × ZCALDC
european capacity building initiative ecbiThank you!