Wealth and Welfare - Essay Example

What is the link between wealth and welfare? Traditionally it has been believed that the wealth of a countrydirectly relates to its welfare, such that if a country has a high GDP, then its citizens are likely to have a favorable welfare. From a leadership or governmental point of view, this means that the more they carry out projects that increase the GDP, the better their country’s welfare. Studies have however been in disagreement with this view. In 2004, the IMF had an economic forum in which it clearly showed that the relationship between wealth and welfare has been the other way around (IMF, 2004).

According to IMF (2004), countries with a favorable welfare for their citizens tend to generate more wealth than countries with poor welfare for their citizens. A look at the CIA’s World Fact book and the ranking of countries under global better life index, it shows that there is an indirect relationship between wealth and welfare (CIA, 2015; OECD, 2015). There are several other factors to consider when assessing a country’s wealth and welfare, but the fact remains that each is a contributing factor to the other such that a country with the highest wealth may not have the best welfare, but the range of countries ranked highest in wealth are also those within the group with the best welfare.

Do governments have a responsibility to address welfare? Going back to the IMF findings, governments should focus their efforts on addressing welfare rather than focusing more on projects that will increase the country’s wealth. Citizens with a good welfare are more likely to be proactive and contribute more towards the country’s wealth. In this perspective, I would support British Prime Minister David Cameron’s view that it is better to focus more on the people “well-being rather than purely on economic criteria” (Jordans, 2011).

ReferencesCIA. (2015). Country comparison: GDP. Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.htmlIMF. (2004). Transcript of a IMF Economic Forum. Washington, DC: International Monetary Fund.Jordans, F. (2011, June 24). USA comes up a bit short in global Better Life Index. Retrieved from usatoday: http://usatoday30.usatoday.com/money/world/2011-05-24-oecd-better-life-index_n.htmOECD. (2015). Hows life? Retrieved from OECD: http://www.

oecdbetterlifeindex.org/