| Summary: | Economic development should be conceived of as the degree to which an economy has
implemented an efficient and just distribution of economic resources. The ubiquitous
measure of GDP per capita reflects a utilitarian conception of justice, where individual
utility is defined as personal income, and social welfare is the average of utilities in a
population. A more attractive conception of justice is opportunity-equalization. Here, a
two-dimensional measure of economic development is proposed, based upon viewing
individuals’ incomes as a consequence of circumstances, effort, and policy. The first dimension
is the average income level of those in the society with the most disadvantaged
circumstances, and the second dimension is the degree to which total income inequality
is due to differential effort, as opposed to differential circumstances. This pair of
numbers is computed for a set of 22 European countries. No country dominates all
others on both dimensions. The two-dimensional measure induces a partial ordering of
countries with respect to development.
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