extracted text

Prof. J. T I N B E R G E N
2555 XD

DEN HAAG,

August

10,

1988

HAVIKLAAN 31

TELEFOONJSS«:«« 070 - 544630

Dear Mr. Elgar,
As agreed I inform you about the progress of my book about which we
corresponded in May (cf. yours of 24th May 1988, EE/SIH/98). The book is
almost ready and may be in your hands around October 1, 1988.
It is not a long text: around 150 pages kk double-spaced (as this
letter). It contains quite a few mathematical formulae and tables, based on
extensive computations - which illustrate the use of many empirical data.
Its main new contributions to economic literature may be summarised as
follows.
(1) In contrast to the present American government's opinion a clear
and significant relationship between armament expenditure and development
assistance made available by the industrialised Western countries.
(2) Reduction of military expenditures on the basis of new agreements
considerably raises world welfare.
(3) A variety of interpretations is proposed regarding the concept of
the optimal amounts of development assistance and security assistance. With
regard to the former it is customary to consider an amount of 0.7 per cent
of GNP of donor countries as optimal. But the origin of this figure is somewhat
mysterious. A large part of my book deals with proposals based on various
clearer starting points.
(4) Theoretically the most attractive point of view is to maximise welf§V*€
of the world population. This appears to be a very high amount, politically
completely unrealistic. I arrive at three more practical approaches.

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(5) One is to reduce the income inequality now existing in the noncommunist world to the inequality attained in the First World as a consequence
of social security systems built up in the last century.
(5) A second approach is to aim at a doubling of the income of the Third
World (as a ratio to that of the First World) in a few decades, which constitut
a perspective to the poverty-stricken continents. Both approaches have been
analysed very concretely with the aid of data and studies made for the World
Bank.
The results show that the 0.7 target is too low and should be doubled
or trebled at least.
(7) In a further analysis I also show that some differentiation of
the aid percentage between donor countries is conceivable, depending on their
own real per capita income.

As I wrote you before the idiom of my text will need editing.
If you are still interested in the book I look forward to hearing from you
about a possible contract.
With best wishes I am

Yours sincerely.

(J. Tinbergen)