Answer

Introduction

Correlation in statistics is applied to measure the strength of a relationship that exists between two variables. There are many types of formulas for calculating correlation coefficients. Pearson’s correlation referred herein as r has been applied to determine the correlation between the various development variables in selected countries and socioeconomic variables. The legend below has been used to explain the level of correlation relationships that exists between the countries developmental and socioeconomic indicators;

Egypt

The Arab Republic of Egypt is located in North Africa bordering Gaza Strip, Israel, the Red Sea, Gulf of Aqaba, Sudan and Libya. Among its major history sites are the Valley of Kings, Great Sphinx and the Pyramids. The country has a population of about 95 million in area of about 1,010, 408 square kilometers. According to World Bank report the country has a GDP (PPP) of US$1.396 trillion and a per capita of US3, 005. In the fiscal year 2018, the country’s real GDP grew by 5.3% while in 2017 the economy grew by 4.2% (World Bank Group, 2018).

The population is highly concentrated along the River Nile Valley and its Deltas accounting for about 99% of the population that shares about 5.5% of the country’s land. The country’s economy depends on oil and gas extraction, agriculture and tourism. The Sahara desert spreads across Egypt to Sudan. Egypt has a house of representatives with a president and a prime minister. It has a semi-unitary government that is elected every five years. The following is the correlation table for Egypt.

The population or labor force of the country is very strongly positively correlated with the GDP (constant PPP US$), GDP per capita and the human development index. However its weakly correlated with the GINI. The same case applies to Gross capital formation or investments. It’s very strongly positively correlated with the GDP (constant PPP US$), GDP per capita and the human development index. However it is moderately correlated with the GINI. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP was moderately negatively correlated with the GDP (constant PPP US$), GDP per capita but negligibly correlated with GINI and the Human Development Index (HDI). Foreign Direct investment as calculated by the net inflows of the country’s GDP is negligibly correlated with the GDP (PPP) and the GDP per capita and also weakly related to the HDI but moderately positively correlated to the GINI. Inflation is strongly correlated to all the developmental indices while school enrolment (Primary) as a measure of human capital is also strongly correlated with all the developmental indicators except the GINI that is negligibly correlated to. Government effectiveness is strongly positively correlated to all the developmental indicators except the GINI that it is weakly correlated to. Political stability is strongly positively correlated to all the developmental indicators except the GINI that it is negligibly correlated to. Regulatory quality is very strongly negatively correlated to GDP (PPP) and GDP per capita. It is strongly negatively correlated to HDI but weakly correlated to GINI. The rule of law are strongly positively correlated to the HDI and negligibly correlated to GINI they are moderately positively correlated to the GDP (PPP) and GDP per capita. Control of corruption is strongly positively correlated to all the developmental indicators except GINI that it is negligibly correlated to. Voice and accountability is strongly positively correlated to GDP and HDI while it is weakly correlated to GINI but moderately positively to GDP per capita. The country’s GDP growth and GDP per capita are strongly negatively correlated as shown on the table below.

Congo (Democratic Republic of Congo)

Democratic Republic of Congo (DRC) is located in central Africa and shares its borders with Uganda, South Sudan, Rwanda, Angola, Zambia, Burundi and Tanzania. It is one of Africa’s largest countries in terms of land size. DRC has a population of slightly more than 78 million in a total land area of 2,345,409 square kilometers. The country’s GDP (PPP) in 2017 was US$67.988 billion while it’s per capita for the same year was US$785. The country’s economy depends on mining especially cobalt and copper that accounts for about 80% of its total exports (World Bank Group, 2018).  It gained its independence from Belgium in 1960 and it currently has a unitary semi-presidential system of government with a president and prime minister heading two legislative houses the senate and the national assembly. The country is named after the Congo River which is the world’s deepest and largest in terms of river discharge.

The population or labor force of the country is very strongly positively correlated with GDP (PPP) and the human development index. However it is negligibly correlated with the GINI and GDP per capita. The same case applies slightly to Gross capital formation or investments. It’s very strongly positively correlated with the GDP (constant PPP US$) and the human development index. However it is negligibly correlated with the GINI and the GDP per capita. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP was strongly positively correlated with the GDP (constant PPP US$) and the  HDI but weakly correlated with the GDP per capita and negligibly correlate with the GINI. Foreign Direct investment as calculated by the net inflows of the country’s GDP is strongly correlated with the GDP (PPP) and HDI and moderately positively related to GDP per capita and GINI. Inflation was strongly correlated to HDI and GDP (PPP) but moderately positively correlated to GDP per capita but strongly negatively correlated to GDP (PPP) and negligibly correlated to GINI. School enrolment is very strongly positively correlated to the GDP (PPP) and HDI while it is negligibly correlated to GDP per capita and GINI. Government effectiveness is moderately correlated to all the developmental indicators except the GDP per capita that it is negligibly correlated to. Political stability is strongly positively correlated to HDI and GDP (PPP) while GINI and GDP per capita are negligibly correlated to. Regulatory quality is negligibly correlated to GINI and GDP per capita but strongly positively correlated to GDP (PPP) and HDI.  Rule of law is strongly negatively correlated to HDI and GDP (PPP) but weakly correlated to GINI and GDP per capita. Control of corruption is strongly positively correlated to the HDI and GDP (PPP) but negligibly correlated to GINI and moderately negatively correlated GDP per capita. Voice and accountability are negligibly correlated to GDP per capita and GINI while strongly positively correlated to GDP (PPP) and HDI. The country’s GDP growth and GDP per capita are weakly negatively correlated as shown on the table below.

Lebanon

The official name of Lebanon is the Lebanese Republic. The country is located in Western Asia bordering Syria, Israel and Cyprus. It is the smallest state in the Asian continent that has an estimated population of slightly more than six million and a total land mass of 10,452 square kilometers. The country’s estimated GDP (PPP) was US$91 billion and a per capita of US$20,028. The GDP growth was estimated to be 2% in 2017 (World Bank Group, 2018).  The economy is driven by tourism and the services sector. The country’s economy has been severely affected by the upsurge in Syrian refugees escaping from the war torn region country. The inflation has increased to 4.5% while the national debt has increased tremendously.

The country has a parliamentary democracy that also includes confessionalism where high ranking government positions are shared according to various religious faith inclinations in the country.

The population or labor force of the country is very strongly positively correlated with GDP (PPP) and GDP per capita. However it is negligibly correlated with the GINI and HDI. The same case applies slightly to Gross capital formation or investments. It’s very strongly positively correlated with the GDP (constant PPP US$) and GDP per capita. However it is negligibly correlated with the GINI and moderately with HDI. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP was strongly positively correlated with the GDP (constant PPP US$) and GDP per capita but negligibly correlate with the GINI and weakly positively to HDI. Foreign Direct investment as calculated by the net inflows of the country’s GDP. It is moderately positively correlated with the GDP (PPP) and GDP per capita while it is negligibly correlated to HDI and GINI. Inflation was strongly correlated to GDP per capita and GDP (PPP) but moderately positively correlated HDI and weakly positively to GINI. School enrolment is very strongly negatively correlated to the GDP (PPP) and GDP per capita but negligibly to GINI and HDI. Government effectiveness is moderately correlated HDI but strongly negatively to GDP per capita and GDP (PPP) while it is negligible to GINI.  Political stability is strongly negatively correlated to GDP per capita and GDP (PPP) while it is negligible to GINI and HDI.  Regulatory quality is negligibly correlated to GINI but strongly positively GDP per capita GDP (PPP) weakly positively correlated to HDI.  Rule of law is very strongly negatively correlated to GDP per capita and GDP (PPP) but negligibly correlated to GINI and HDI. Control of corruption is very strongly negatively correlated to the GDP per capita and GDP (PPP) but negligibly correlated to GINI and HDI. Voice and accountability are negligibly correlated to HDI and GINI while weakly positively correlated to GDP (PPP) and GDP per capita. The country’s GDP growth and GDP per capita are negligibly correlated as shown on the table below.

Austria

The Republic of Austria has a population of about nine million inhabitants located in Central Europe. The country borders Germany, Czech Republic, Italy, Slovenia, Slovakia, Switzerland and Hungary. Austria covers a total land area of 83,879 square kilometers. It has a social market that is well developed with a highly industrialized market economy with German as its major trading partner. Tourism accounts for about 10% of its total GDP with an average GDP growth rate.

It has a parliamentary democracy with federated states that make up the Austria’s Federal Republic. The federal council is the upper house while the lower house is the national council. The country’s president is the head of the federal government Austria is one of the world’s richest countries.

The population or labor force of the country is very strongly positively correlated with all the developmental indicators.  The same case applies to Gross capital formation or investments. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP was negligibly correlated with all the Developmental indicators except GINI that it was weakly correlated to. The same applied to Foreign Direct investment. Inflation was weakly correlated to all the developmental indices except GINI that was negligibly correlated to. School enrolment (Primary) as a measure of human capital is strongly negatively correlated to all the developmental indicators. Government effectiveness is very strongly positively correlated to all the developmental indicators the same case with Political stability. Regulatory quality is very strongly negatively correlated to GDP (PPP) and GDP per capita. It is strongly negatively correlated to HDI but weakly correlated to GINI. The rule of law is strongly positively correlated to all the developmental indicators except the GINI that it is very strongly correlated to. Control of corruption is very strongly positively correlated to all the developmental indicators except HDI that it is strongly positively correlated to. Voice and accountability is weakly negatively correlated to all the developmental indicators except GINI that is negligibly correlated to.  The country’s GDP growth and GDP per capita are moderately negatively correlated as shown on the table below.

Kazakhstan

Kazakhstan is the ninth largest country in the world and also the world’s largest landlocked country with an estimated area of 2,724,900 Sq. Kilometers. It borders Russia, Kyrgyzstan, China, Turkmenistan and Uzbekistan and also parts of the Caspian Sea. It has a population of about 18.3 million who depend on the country’s large mineral resources that also include oil and gas extraction. Kazakhstan has very large mineral reserves like Uranium, Copper, Gold, Diamond, Coal, Iron, Lead and Chromium. The country had a Gross Domestic Product (GDP), current of US$158.2 billion in 2017 and a GDP per capita of US$8,792 in the same year (World Bank Group, 2018). The country controls about 60% of the Central Asian economy (Zarakhovich, 2006). It earned its independence after the Soviet Union was dissolved in 1991. The country has a unitary president and a prime minister with the Senate as the upper house and Mazhills as the lower house.

mas

The population or labor force of the country is very strongly positively correlated with the GDP (constant PPP US$), GDP per capita and the human development index. However it is weakly correlated with the GINI. The same case applies to Gross capital formation or investments. It’s very strongly positively correlated with the GDP (constant PPP US$), GDP per capita and the human development index. However it is strongly positively correlated with the GINI. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP is also negligibly correlated with the GDP (constant PPP US$), GDP per capita and the Human Development Index (HDI). However it is weakly positively correlated to GINI. Foreign Direct investment as calculated by the net inflows of the country’s GDP is strongly positively correlated with the GDP (PPP) and the GDP per capita and the HDI however it is moderately positively correlated to the GINI. Inflation is strongly negatively correlated to HDI but moderately correlated to GDP (PPP) and GDP per capita but negligibly to GINI. Government effectiveness is strongly positively correlated to all the developmental indicators except the GINI that it is moderately positively correlated to. Political stability is strongly positively correlated to all the developmental indicators except the HDI that it is very strongly correlated to. Regulatory quality is very strongly negatively correlated to GDP (PPP) and GDP per capita. It is strongly negatively correlated to HDI but negligibly correlated to GINI. The rule of law are very strongly positively correlated to the HDI and strongly positively correlated GINI, GDP (PPP) and GDP per capita. Control of corruption is strongly positively correlated to all the developmental indicators. Voice and accountability is strongly positively correlated to GDP (PPP), GDP per capita and GINI while it is very strongly correlated to HDI. The country’s GDP growth and GDP per capita are negligibly correlated as shown on the table below.

Rwanda

Rwanda is one of the smallest countries in Central and Eastern Africa. It borders Tanzania, Uganda, Democratic republic of Congo and Burundi. It is a landlocked country that is located few degrees to the southern part of the Equator. It is one of Africa’s great lakes countries with an economy that mostly depend on subsistence agriculture and tourism. The country has a population of 11.26 million in an area of about 26,338 square kilometers. The country is still recovering from the genocide that took place in 1994 that almost crumbled the country’s economy. In 2017 the GDP was 24.717 billion while its GDP per capita was US$2,090 (World Bank Group, 2018). The country has a bicameral parliament that has a majority of women making it the only country in the world currently that has a gender imbalance favoring women in a high legislative assembly. 

The population or labor force of the country is very strongly positively correlated with the GDP (constant PPP US$), GDP per capita and the human development index. However it is negligibly correlated with the GINI. The same case applies to Gross capital formation or investments and the international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP. Foreign Direct investment as calculated by the net inflows of the country’s GDP is weakly positively correlated with the GDP (PPP), HDI and the GDP per capita but negligibly correlated to the GINI. Inflation is negligibly correlated to all the developmental indicators. Government effectiveness is strongly positively correlated to GDP (PPP) and GDP per capita however it is very strongly positively correlated to HDI and negligibly to GINI. Political stability is strongly positively correlated to all the developmental indicators except the GINI that it is moderately positively correlated. Regulatory quality is very strongly negatively correlated to GDP (PPP) and GDP per capita. It is strongly negatively correlated to HDI but negligibly correlated to GINI. The rule of law is strongly positively correlated to the HDI and GDP (PPP) but moderately to GDP per capita negligibly to GINI.  Control of corruption is strongly positively correlated to all the developmental indicators except GINI that it is negligibly correlated to. Voice and accountability is strongly positively correlated to GDP (PPP), GDP per capita and weakly to GINI while it is very strongly correlated to HDI. The country’s GDP growth and GDP per capita are negligibly correlated as shown on the table below.

Paraguay

The Republic of Paraguay is a landlocked country that is in South America. It borders Brazil and Bolivia with Paraguay River splitting the country between the South and North. The country located at the center of South America and at times due to the country’s central position in the continent it is referred to as the heart of the continent (South America). It has a population of about 7.33 million in an area of 406,752 square kilometers.

According to 2018 estimates the country has a GDP (PPP) of US$41.851 billion and a per capita of US$5,933. The country’s economy had an average growth of 4.5% between the years 2004 to 2017 (World Bank Group, 2018).  It exports electric power to Argentina, Brazil and Uruguay from its excess hydroelectric power that is generated from two major projects. Paraguay is among the top producers of soybean, corn, stevia, wheat, beef and tung oil. Paraguay got its independence in 1811 from Spain. It has a lower and upper house but the country has suffered from misrule and dictatorship that stagnated the country’s economy for many years.

The population or labor force of the country is very strongly positively correlated with the GDP per capita and the human development index. However, it is negligibly correlated with the GINI moderately positively to GDP (constant PPP US$). The same case applies to Gross capital formation or investments. It is very strongly correlated to GDP per capita and HDI and strongly to GDP (PPP) but weakly to GINI. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP is strongly negatively correlated to GDP (PPP) but moderately to GDP per capita. It is weakly negatively correlated to HDI and negligibly to GINI.  Foreign Direct investment as calculated by the net inflows of the country’s GDP is negligibly correlated to the GINI, HDI and the GDP per capita but weakly positively correlated to the GDP (PPP). Inflation is strongly negatively correlated to GDP per capita and HDI but moderately to GDP and GINI. Government effectiveness is strongly positively correlated to GDP (PPP) and GINI however it is very strongly positively correlated to HDI and weakly to GDP (per capita). Political stability is strongly positively correlated to HDI and GDP per capita but weakly to GINI and negligibly to GDP (PPP). Regulatory quality is very strongly negatively correlated to GDP per capita and strongly negatively correlated to HDI. It is moderately negatively correlated to GDP but negligibly correlated to GINI. The rule of law is strongly positively correlated to the HDI, GINI and GDP per capita but negligibly to GDP (PPP). Control of corruption is strongly positively correlated to HDI and GDP per capita but moderately to GINI and negligibly to GDP (PPP). Voice and accountability is strongly positively correlated to GINI, GDP per capita and very strongly to HDI but moderately to GDP (PPP).The country’s GDP growth and GDP per capita are strongly positively correlated as shown on the table below.

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Germany

The Federal Republic of Germany is located in Western and Central Europe bordering Denmark, Poland, Austria, France, Belgium, Netherlands and Switzerland. Germany has a total land surface of 357,386 square kilometers with sixteen constituent states and a total population of 83 million people. Germany had a GDP per capita of 50, 841 in 2017 while it’s GDP (PPP) amounted to US$ 4.373 trillion. The country has a bicameral parliament with Bundesrat as the upper house and Bundestag as the lower house.

The population or labor force of the country is very strongly positively correlated with all the developmental indicators except the GINI which is weakly positively related.  The same case applies to Gross capital formation or investments only that they are weakly correlated except the GINI that is strongly correlated. The international trade openness as measured by the country’s rate of exports goods or services as a percentage of the GDP is very strongly correlated with all the Developmental indicators except GINI that it was moderately correlated to. The Foreign Direct investment is negligibly correlated to all the developmental indicators except the GINI that it is weakly negatively correlated to. Inflation was negligibly correlated to all the developmental indicators. School enrolment (Primary) as a measure of human capital is strongly negatively correlated to all the developmental indicators except the GINI that is negligibly correlated to. Government effectiveness is very strongly negatively correlated to all the developmental indicators except the GINI that is weakly correlated the same position apply to Political stability except the GINI is negligibly correlated. Regulatory quality is very strongly positively correlated to GDP (PPP), HDI and GDP per capita while GINI is moderately correlated. The rule of law is strongly positively correlated to all the developmental indicators except the GINI that it is negligibly correlated to. Control of corruption is very strongly negatively correlated to all the developmental indicators except GINI that it is strongly positively correlated to. Voice and accountability is weakly negatively correlated to GDP (PPP) and GDP per capita while the HDI is moderately correlated however GINI is negligibly correlated. The country’s GDP growth and GDP per capita are negligibly correlated as shown on the table below.

     The relationship between developmental indicators and socioeconomic variables for the eight countries differ between the countries with the highest GDP per capita and the lowest. The countries with the lowest GDP per capita like Rwanda and Congo have relatively inconsistent correlations between socioeconomic indices and developmental indicators. Their GINI’s are largely inconsistent and negligible compared with countries that have high GDP per capita. Countries that have consistently very strong correlation in population/labor force and developmental indicators are associated with high development like Germany and Austria while countries that have inconsistently strong correlation between population/labor force and developmental indicators are associated with low development like Congo and Rwanda. Developed countries also have consistently strong positive correlation between the rule of law and developmental indicators. These findings are consistent with development theories in economics like the convergent theory.  Development theories posit that economic development takes place whenever poverty, unemployment and inequality issues have been reduced, controlled or eliminated. Positive correlation occurs when correlation is towards the same direction and which would in future reduce the margin between the rich nations and the poor nation’s disparities in economic growth. For example, most population/labor force rates in developed countries are highly correlated to the high GDP per capita unlike political stability that is negatively associated with government effectiveness. That is, the more developed countries advance economically the more stable they are politically and the more they are catching up with developed nations. The higher the GDP (PPP) the more the country gains political stability.  However, the rule of law is weakly correlated to the GDP per capita and the GDP (PPP) for developing countries like Congo that mostly have bad political leadership or weak democracies. Such countries have military dictatorships with unstable political systems. According to Brett (2009) development theories are hinged on economic growth and have their roots in the theories of contemporary classical economists such as Adam Smith who supported state intervention as a tool to national prosperity (Harris, 2013). From the correlation analysis it is certain that countries that have a very strong rule of law also have high GDP (PPP) whereas those with negative correlation or weak rule of law have weak economies.  However, the developing countries share almost equal correlation between GDP (PPP) and GDP per capita with labor force and investments (Gross Capital Formation). The correlations between these two socioeconomic and economic development indicators are almost equal. It means that with time the economies of the least developed nations and those of developed nations would converge as the rate of economic investment of countries like Germany that have not been as high as before in fact for Germany’s investment is weakly correlated with both the GDP (PPP) and the GDP per capita. According to the weak correlations between GDP per capital and capital growth, investment growth in Germany complies with economics principles of diminishing marginal returns (Chatz, n, d). With the  exceptional countries like Congo that have weak correlation between the two socioeconomic indicators and development indicators have been affected by negligible GINIs’ that indicate very large economic disparities between the poor and the rich in that country besides the negligible correlation between control of control of corruption and the nation’s GINI hence strong positive correlation with political stability. The scenario above with the exception of Congo confirms the convergence theory that the least developed countries will in future converge with developed economies in terms of economic development. Convergence in economics occurs when nations with comparatively lower GDP per capita, mostly developing countries catch up with nations that have higher GDP per capita.