I don’t have much to say about the disaster that has struck Haiti. But it does serve as a vivid reminder that Haitians have been suffering through a far deeper and more profound slow-motion disaster for decades. Every earthquake or tsunami or flood in the developing world yields tragic images. My parents are immigrants from Bangladesh, a country that most Americans know for its natural disasters.

Yet the number of people who die in these calamities pales in significance to the number who die because of broken institutions and the resulting absence of the kind of dynamic capitalist economy that we take for granted. In 2008, economists Michael Clemens and Lant Pritchett published “Income per Natural: Measuring Development as if People Mattered More Than Places,” a brilliant illustration of the damage broken institutions can do.

It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. In this new working paper, research fellow Michael Clemens and non-resident fellow Lant Pritchett create a new statistic: income per natural — the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50 percent higher than GDP per resident. For 1.1 billion people the difference exceeds 10 percent. The authors also show that poverty estimates are different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States.

The desperation on the part of would-be Haitain refugees is easy to understand. One approach, which Clemens and Pritchett strongly endorse, is to liberalize international migration flows. Communities in affluent countries resist this idea, for obvious and understandable reasons. But blanket opposition to mutually beneficial offshoring strikes me as really tough to justify, particularly when it helps strengthen market institutions.