In the process of determining the socalled Human Development Index (HDI) or what is referred to as a measure of well-being, the United Nations refers to at least three critical benchmarks: Per capita income, longevity and literacy.
The emphasis of HDI on income cannot be underscored. Income remains to be an important indicator of well-being or welfare given its broad implications for lifes many options for survival, growth and development, welfare enhancement and sustainability. Having access to sources or opportunities for income earning or generation is thus important to achieve a satisfactory HDI. However, beyond having access to income earning or generation sources or opportunities, there is likewise a need to ensure that income is distributed fairly well or equally among the citizens of a given country. This is because inequalities in income distribution can stand in the way of overall economic growth and development. Income inequality or the concentration of income in the hands of a few, according to Paul Krugman (a prolific economic analyst; some of his credits include Self-fulfilling Currency Crises, Currencies and Crises, Persistent Trade Effects of Large Exchange Rate Shocks, The Persistence of the US Trade Deficit, among others) fosters the formation of oligarchies with a proclivity to preserve their own wealth and power rather than to nurture societies with equal opportunities for all. Income inequality is likewise a potential tinderbox.
It is in the light of these observations that initiatives to resolve income inequality have been a key component of most development plans. As an example, the Medium-Term Philippine Development Plan, (MTPDP, 2002-2004) puts it quite succinctly as government development initiatives shall continue to address concerns on economic development, expansion and equalization of economic and social opportunities and poverty alleviation. …