Spatial
Inequality and Development
Overview of UNU-WIDER Project
Ravi Kanbur and Anthony J. Venables -
September, 2005
The UNU-Wider project on ‘Spatial disparities in development’, directed by Ravi Kanbur and Anthony J. Venables,
has analyzed evidence on the extent of spatial inequalities in over 50 developing countries.
The peer reviewed papers published under the auspices of the project find that spatial inequalities
are high, with disparities between rural and urban areas, and also between geographically advantaged
and disadvantaged regions. In many countries such disparities are increasing, partly as a consequence of
the uneven impact of trade openness and globalization. While there are efficiency gains from the
concentration of economic activity in urban centers and in coastal districts, the associated regional
inequalities are a major contributor to overall inequality. They are particularly worrying if they align
with political or ethnic divisions. The broad outline of appropriate policy for managing high and
rising spatial disparities is also clear. The case for policy interventions to ensure a more spatially
equitable allocation of infrastructure and public services, and for policies to ensure freer migration,
has been made powerfully in the papers in this project.
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SPATIAL INEQUALITY IN
CHINA |
Fifty years of regional inequality in China:
a journey through central planning, reform and
openness
Ravi
Kanbur and Xiaobo Zhang
August 2004
This paper constructs and analyses a long-run time-series for regional inequality in
China from the Communist Revolution to the present. There have been three peaks of
inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the
Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and
global integration in the late 1990s. Econometric analysis establishes that regional
inequality is explained in the different phases by three key policy variables; the ratio of
heavy industry to gross output value, the degree of decentralization, and the degree of
openness.
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Divergent Means and Convergent Inequality of Incomes among the Provinces and
Cities of Urban China
John Knight, Shi Li and Renwei
Zhao
August 2004
Two precisely comparable national household surveys relating to 1988 and 1995 are
used to analyse changes in the inequality of income in urban China. Over those seven
years province mean income per capita grew rapidly but diverged across provinces,
whereas intra-province income inequality grew rapidly but converged across provinces.
The reasons for these trends are explored by means of various forms of decomposition
analysis. Comparisons are also made between the coastal provinces and the inland
provinces. The decompositions show the central role of wages, and within wages profitrelated
bonuses, together with the immobility of labour across provinces, in explaining
mean income divergence. The timing of economic reforms helps to explain the
convergence of intra-province income inequality. Policy conclusions are drawn.
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Income
Inequality in Rural China: Regression-based Decomposition Using
Household Data
Guanghua Wan and Zhangyue Zhou
August 2004
A considerable literature exists on the measurement of income inequality in China and
its increasing trend. Much less is known, however, about the driving forces of this trend
and their quantitative contributions. Conventional decompositions, by factor
components or by population subgroups, only provide limited information on the
determinants of income inequality. This paper represents an early attempt to apply the
regression-based decomposition framework to the study of inequality accounting in
rural China, using household level data. It is found that geography has been the
dominant factor but is becoming less important in explaining total inequality. Capital
input emerges as a most significant determinant of income inequality. Farming structure
is more important than labour and other inputs in contributing to income inequality
across households.
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Externalities
in Rural Development: Evidence for China
Martin Ravallion -
July 2003
The paper tests for external effects of local economic activity on consumption and income
growth at the farm household level using panel data from four provinces of post-reform
rural China. The tests allow for nonstationary fixed effects in the consumption growth
process. Evidence is found of geographic externalities, stemming from spillover effects of
the level and composition of local economic activity and private returns to local human and
physical infrastructure endowments. The results suggest an explanation for rural
underdevelopment arising from underinvestment in certain externality-generating
activities, of which agricultural development emerges as the most important.
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INEQUALITY AND CONFLICT |
Spatial-horizontal inequality and the Maoist
insurgency in Nepal
Mansoob Murshed and Scott
Gates
July 2004
The Maoist insurgency in Nepal is one of the highest intensity internal conflicts in
recent times. Investigation into the causes of the conflict would suggest that grievance
rather than greed is the main motivating force. The concept of horizontal or inter-group
inequality, with both an ethnic and caste dimension, is highly relevant in explaining the
Nepalese civil war. There is also a spatial aspect to the conflict, which is most intense in
the most disadvantaged areas in terms of human development indicators and land
holdings. Using the intensity of conflict (fatalities) as the dependent variable and HDI
indicators and landlessness as explanatory variables, we find that the intensity of
conflict across the districts of Nepal is significantly explained by the degree of
inequalities.
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Aspiration to inequality: regional disparity
and centre-regional conflicts in Indonesia
Mohammad Tadjoeddin, Widjajanti Suharyo and Satish
Mishra
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POVERTY AND INEQUALITY IN
INDIA |
What has luck got to do with it? A
regional analysis of poverty and agricultural growth in
India
Richard Palmer-Jones and Kunal Sen
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Decomposing Spatial Differences in Poverty in India
Shatakshee Dhongde
August 2004
Over the last decade, India has been one of the fastest growing economies, and has
experienced considerable decline in overall income poverty. However, in a vast country
like India, poverty levels vary significantly across the different states. In this paper, we
analyze the differences between poverty at the state and national level, separately for the
rural and urban sector, in the year 1999-2000. Instead of following the usual practice of
decomposing the changes in poverty over time, we decompose the changes in poverty
across regions. Such decomposition reveals that differences in state and national poverty
levels were largely explained by differences in the state and national mean income
levels. Differences in the state and national distributions of income were less important
in explaining spatial differences in poverty. An important policy implication of our
results is that states with extremely high levels of poverty would have reduced...
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Unequal fiscal capacities across Indian
states: how corrective is the fiscal transfer
mechanism?
Pinaki Chakraborty
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| POVERTY IN
ASIA |
Commune-level estimation of poverty measures
and its application in Cambodia
Tomoki Fujii
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Poverty mapping with aggregate census data:
what is the loss in precision
Nicholas Minot and Bob Baulch
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| LOCATION AND MIGRATION |
The Industrial
Location in Post-Reform India:Patterns of Inter-regional Divergence
and Intra-regional Convergence
Sanjoy Chakravorty - 2003
Where do new industrial investments locate, and what factors drive
the industrial location decisions? Do these investments follow the
model of ‘divergence followed by convergence’ suggested by the
cumulative causation, agglomeration economies, and transportcosts
approaches? These questions are examined with district-level
data from India for the pre- and post-reform periods using: first,
tables and maps of concentration and clustering, aggregated for
all industry and disaggregated into five sectors (Heavy Industries,
Chemicals and Petroleum, Textiles, Agribusiness, and Utilities),
and second, logistic and OLS/Heckman selection regression
models for these six elements. The data provide solid evidence both
of inter-regional divergence and intra-regional convergence, and
suggest that ‘concentrated decentralisation’ is the appropriate
framework for understanding industrial location in post-reform
India.
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China's telecommunications universal service
in a competitive environment
Mingzhi Li and Liangshu Qi
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The effects of migration on interregional
differentials in consumer behaviour:evidence from the Baise district, Guangxi
Chen Zhao, Lu Ming and Pan Hui
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| TRADE AND
INEQUALITY |
International
Trade, Location and Wage Inequality in China
Songhua Lin -
September 2003
Models of economic geography predict that transportation costs directly affect demand
for goods and the supply of intermediate inputs. One of the reasons that international
trade is concentrated in the coastal provinces of China is that they have lower
transportation costs in transporting goods to other countries than do provinces in the
interior. This paper examines the relationship between the provincial wage rate and each
province’s access to international markets, and to suppliers of intermediate inputs. A
gravity equation is first estimated to construct these ‘market access’ and ‘supplier
access’ variables. In the second stage, the effect of market access and supplier access on
the wage rate is estimated. It is found that about one quarter of the provincial wage
differences in the coastal provinces and 15 per cent of the wage differences in the
interior provinces can be explained by these economic geography variables.
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Trade Liberalisation and Spatial Inequality:
Methodological Innovations in Vietnamese
Perspective
Henning Jensen and Finn Tarp
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Regional disparity and economic growth in China The impact of
labor market distortions
Fang Cai, Dewen Wang and Yang Du
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| SPATIAL INEQUALITY IN
ASIA |
Is spatial inequality increasing in the
Philippines?
Arsenio Balisacan and Nobuhiko Fuwa
February 28, 2003
The Philippines has been long known for its high level of inequality in income and
wealth distribution. A widely held view on the inequality in the Philippines is that
development policy has favored the island of Luzon and discriminated against peripheral
islands (provinces) of Visayas and (especially) Mindanao. Moreover, the poor performance of
the Philippine economy over the last three decades has been attributed partly to the relatively
large variation in access to infrastructure and social services between the major urban centers
and rural areas. Spatial
variation in certain summary measures of human development is also evident (UNDP 1996,
2000).
If indeed spatial income disparities are at the core of the poverty and inequality
problem in the Philippines, then policy reforms aimed at reducing these disparities have to be
central elements of the country's poverty reduction program. This may also promote...
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Bangalore: Divided City under the Impact of Globalization
Christoph Dittrich
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SPATIAL INEQUALITY IN
FSU |
Regional dimensions of poverty in Russia.
Is it geography or economics that matter?
Stanislav Kolenikov and Tony
Shorrocks
July 10, 2001
This paper analyses poverty in the regions of Russia from the point of view of
economic, social, and demographic factors distinguishing each of the regions. A (nonlinear)
regression model is proposed for the poverty indicators that links the latter to
the above factors via mean income and inequality taken as the \fundamental" variables
characterizing income distribution as a whole. The application of a novel method
of factor decomposition, Shapley-Owen-Shorrocks technique, as well as a number of
regression diagnostic tools, is demonstrated.
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Spatial inequality and development in Central
Asia
Kathryn Anderson
and Richard
Pomfret
June 2004
This paper focuses on inequality in living standards across oblasts and regions within
Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. Regional
inequality is an important area of research and policy development. Inequality in
income and consumption are logical outcomes in a market-based economic system. If
inequality within countries exists because of barriers to competition, then inequality can
foment internal tension, and economic and social development within countries is
negatively affected. We examine Living Standards Measurement data from Tajikistan,
Kyrgystan, and Kazakhstan and additional survey data from Uzbekistan. We find that
the most important explanations for the variation in expenditures per capita in the region
are household location, household composition, and education. We find large variation
in per capita expenditure by location within each country, and the differences go beyond
the simple rural-urban distinction. Family structure is also important, and in all...
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WIDER Project on Spatial Disparities in Human
Development
Papers
selected for the conference will be considered for a special issue of a
leading English language Asian journal, to be edited by Ravi
Kanbur (Cornell
University), Tony Venables (London School of Economics) and Guanghua Wan
(WIDER). |
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From WIDER
Spatial Disparities in Human Development
Project name/title:
Spatial Disparities in Human Development
Year: 2002
Theme: Poverty, Inequality and Well-being
Abstract:
Many developing and transition countries have considerable regional
variation in average household income, poverty, and in health and
educational status. National human development indicators can therefore
mislead policy-makers when large regional disparities exist. This project
will investigate the size and determinants of regional disparities in a
representative selection of countries. It will use indicators such as
poverty incidence and depth, within-region income inequality, human
development, and gender indicators to better understand why some regions
fall behind in the development process.
Director:Guanghua
Wan
Senior Research Fellow
Ravi
Kanbur
Project co-director
Anthony
J. Venables
Project co-director
Assistant:Lorraine
Telfer-Taivainen
Secretary to the Director
Project Meetings:
29
May 2003 Project meeting on Spatial Inequality and
Development
Conferences:
28
March 2003 WIDER Conference on Spatial Inequality in Asia
1
November 2002 WIDER Conference on Spatial Inequality in Latin
America
21
September 2002 WIDER Conference on Spatial Inequality in
Africa
28
June 2002 Cornell - LSE - WIDER Development Conference on
Spatial Inequality and Development
Publications:
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Adverse
Geography and Differences in Welfare in Peru
Javier Escobal and Máximo Torero
October 2003
In Peru, a country with an astonishing variety of different ecological areas, with 84
different climate zones and landscapes, with rainforests, high mountain ranges and dry
deserts, the geographical context may not be all that matters, but it could be very
significant in explaining regional variations in income and poverty. The major question
this paper tries to answer is: what role do geographic variables, both natural and manmade,
play in explaining per capita expenditure differentials across regions within Peru?
How have these influences changed over time, through what channels have they been
transmitted, and has access to private and public assets compensated for the effects of
an adverse geography?
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An
Inquiry into Cities and Their Role in Subnational Economic Growth in
South Africa
W.A. Naudé and W.F. Krugell - 2003
South Africa is characterised by significant inequality in spatial
economic activity. Whether future growth and development on a
sub-national level in South Africa will be such as to reduce this
inequality may depend on the economic growth and development of South
Africa's largest cities. Our local economic growth empirics show some
indications of conditional convergence in output between poorer
towns, as well as overall between all cities and towns. Between 1990
and 2000 some limited sigma convergence was found, but this was
driven by declines in the standard deviation of per capita income
amongst the poorest quintile of towns. An estimate of conditional
beta convergence of 1.2% over the period 1990 to 2000 confirms that
overall convergence has been taking place. From an estimation of the
determinants of economic growth on a local level, using a dataset on
353 local areas in South Africa between 1990 and 2000, we found the
most significant determinants to be stocks of human capital and
distance from harbours and markets. Human capital's effect on
economic growth was strongly associated with the presence of large
cities, as one would predict from endogenous growth theory.
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Microsimulation, CGE and Macro
Modelling for Transition
and Developing Economies
James B. Davies -
June 2004
Alternative approaches to modelling distributional and welfare effects of changes in
policy and the economic environment in developing and transition countries are
surveyed. Microsimulations range from pure accounting approaches to models with
behavioural equations based on econometric estimates and various dynamic models.
Microsimulation accounting models are key to analysing the impact effects of tax and
benefit changes and are becoming widespread. Computable general equilibrium (CGE)
modelling endogenizes price changes and changes in industry and labour market
structure. An essential CGE input is a social accounting matrix (SAM), which can be
used to do simple multiplier analyses. A wide range of macroeconomic models have
also been used in developing countries, endogenizing variables like interest rates and
exchange rates.
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Are
Neighbours Equal? Estimating Local Inequality in Three Developing
Countries
Chris Elbers, Peter Lanjouw,
Johan Mistiaen, Berk Özler
and Ken Simler
July 2003
Based on a statistical procedure that combines household survey data with population
census data, this paper presents estimates of inequality for three developing countries ( Ecuador, Madagascar and Mozambique )
at a level of disaggregation far below that allowed by household surveys alone. We show that
while the share of within-community inequality in overall inequality is high, this does not
necessarily imply that all communities in a given country are as unequal as the country as a
whole. In fact, in all three countries there is considerable variation in inequality across
communities. We also show that economic inequality is strongly correlated with
geography, even after controlling for basic demographic and economic conditions.
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Changes
in Spatial Income Inequality in the Philippines: An Exploratory Analysis
Arsenio M. Balisacan and Nobuhiko Fuwa
May 2004
The purpose of this paper is to establish some basic facts about income inequality in the
Philippines, with a special focus on the importance of spatial income inequality. Despite
major fluctuations in macroeconomic performances, income inequality remained
relatively stable during the years 1985-2000. Spatial inequality accounts for a sizable
but not overwhelming portion of the national-level income inequality, and the relative
importance of spatial inequality was declining over time. We also find that mean
income levels across provinces were converging at a much faster rate than those
observed in currently developed countries.
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Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth across
Indian States
Sanghamitra Bandyopadhyay -
November 2003
This paper documents the convergence of incomes across Indian states over the period
1965 to 1998. It departs from traditional analyses of convergence by tracking the
evolution of the entire income distribution, instead of standard regression and time
series analyses. The findings reveal twin-peaks dynamics—the existence of two income
convergence clubs, one at 50 per cent, another at 125 per cent of the national average
income. Income disparities across states seem to have declined over the 1960s, only to
increase over the subsequent three decades. The observed polarization is strongly
explained by the disparate distribution of infrastructure, and that of education, and to an
extent by a number of macroeconomic indicators; that of capital expenditure and fiscal
deficits.
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Crime,
Isolation, and Law Enforcement
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A
Decomposition Analysis of Regional Poverty in Russia
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Economic
Polarization Through Trade: Trade Liberalization and Regional Growth in
Mexico
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How
Responsive is Poverty to Growth? A Regional Analysis of Poverty,
Inequality, and Growth in Indonesia, 1984-99
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Industrial Location and Spatial Inequality: Theory and Evidence from India
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Longevity
in Russia's Regions: Do Poverty and Low Public Health Spending Kill?
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Love
Thy Neighbour? Evidence from Ethnic Discrimination in Information
Sharing within Villages
Mattia Romani - 2003
CSAE, University of Oxford
There is increasing evidence to suggest that a fundamental source
of information for farmers on how to access and use new
agricultural technologies comes from interacting with
their neighbours. Economic research on adoption of
innovations in a rural context has only partially
addressed the issue of how the social structure of a
village can affect adoption and the final impact on productivity
of farmers. This paper investigates the role of proximity
interpreted not only in geographical terms but also along
the line of ethnic similarities among neighbours (what we
define as ‘social proximity’). We use a panel dataset
collected in Côte d'Ivoire to define the probability of
accessing the knowledge network. The main results
indicate that farmers from ethnic minorities are less
likely to access, and benefit less from, extension
services. However, they seem to try to re-equalise their
condition by putting more effort than dominant ethnic group
neighbours in sharing information among themselves.
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Human Well-being:
Concepts and Conceptualizations
Des Gasper - April 2004
Economic measures of income have ignored large areas of human well-being and are
poor measures of well-being in the areas to which they attend. Despite increased
recognition of those distortions, ‘GNP per capita continues to be regarded as the
quintessential indicator of a country’s living standard’ (Partha Dasgupta). Well-being
seems to have intuitive plausibility as a concept, but in practice we encounter a
bewilderingly diverse family of concepts and approaches, partly reflecting different
contexts, purposes, and foci of attention. Is there a unifying framework that yet respects
the complexity and diversity of well-being? This paper presents an imperfect
comparative and integrative framework that builds on the contributions by Sen and
others. We move toward the framework gradually, since well-being concepts are in fact
complex entitities which reflect pictures of personhood and of science. Insight grows
through surveying a wide range of relevant experience and views, before risking
blinkering one’s vision in a framework. The paper then uses the framework to examine
conceptualizations of human well-being, by Dasgupta, Sen, Nussbaum, Doyal and
Gough, and Alkire.
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Conceptual and Measurement Issues
in Poverty Analysis
Erik Thorbecke
February 2004
The objective of this paper is to review a number of issues related to poverty, while
taking stock of the ongoing research. Most of the remaining unresolved issues in
poverty analysis are related directly or indirectly to the dynamics of poverty. Before the
development community can become more successful in designing and implementing
poverty-alleviation strategies, within the context of growth, we need to understand
better the conditions under which some households remain permanently (chronically)
poor and how others move in and out of poverty. In what follows we review the state of
the art under a number of interrelated headings: (1) Chronic vs. transient poverty;
(2) Poverty and vulnerability; (3) The determination of the poverty line across time and
countries; (4) The quantitative vs. qualitative approach to poverty measurement; and
(5) Growth, inequality and poverty.
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Spatial
Inequality for Manufacturing Wages in Five African Countries
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UNU-WIDER
Special Issue: Spatial Inequality and Development
Urban-Rural
Inequality in Living Standards in Africa
WIDER
Special Issue: Spatial Inequality and Development in Asia
WIDER
Special Issue: Spatial Issues in Africa
WIDER
Special Issue: Symposium on Spatial Inequality in Latin America
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