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The political economy of development
This academic site promotes excellence in teaching and researching economics and development, and the advancing of describing, understanding, explaining and theorizing.
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On economic inequality
Related themes:
- Inequality/social exclusion
- Poverty
- Informal sector

- Microfinance
- Aid
- PRSP
- U.S. economic inequality, poverty, social exclusion and corruption
- Economic inequality, poverty, and social exclusion in Latin America
- Economic Inequality, Poverty, Social Exclusion and Corruption in China
Background papers prepared for World Development Report 2006: equity and development

Claessens, Stijn and Enrico Perotti. 2005.
The Links between Finance and Inequality: Chanels and Evidence.
Much attention has recently been given to whether market reforms reduce or increase inequality. Inequality often reflects unequal access to productive opportunities and recent evidence has highlighted the presence of onerous barriers to entry, especially in developing countries. This paper focuses on the relationships between inequality and finance. In principle, a better financial system can help overcome barriers, and thereby increase economic growth and reduce inequality. Indeed, a more developed, that is deeper, financial sector has been shown to aid economic growth. Financial reform will only reduce inequality, however, if it improves access for more individuals with growth opportunities. Reforms thus need to broaden, not just deepen financial systems. At the same, as recent theoretical and empirical work has shown, ex ante inequality can hinder welfare enhancing reforms. Concentrated economic and political powers will likely block financial (and other) reforms, or manipulate their design and/or implementation, so that the benefits reach fewer individuals. Also, by design or implementation, financial reforms can lead risks to be allocated unfairly and costs to be socialized, especially around financial crises, further worsening inequality. Furthermore, reforms that do not provide gains for many may be followed by a political backlash that may make even valuable financial sector reforms not sustainable.
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Decker, Klaus, Caroline Sage and Milena Stefanova. 2005.
Law or Justice: Building Equitable Legal Institutions.
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Hoff, Karla. 2004.
What Can Economists Explain by Taking into Account People's Perceptions of Fairness? Punishing Cheats, Bargaining Impasse, and Self-Perpetuating Inequalities.
There is a standard hypothesis in economics, the rational self-interest hypothesis, which is based on a radically simplified view of human nature. In this view, individuals are exclusively motivated by their material self-interest and unboundedly rational in the pursuit of it. This hypothesis provides accurate predictions for competitive markets with standardized goods. However, much economic activity occurs outside of such markets—in markets with a small number of traders, within firms...
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Pinglé, Vibha. 2005.
Faith, Equity, and Development.
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Rao, Vijayendra. 2004
Symbolic Public Goods and the Coordination of Collective Action: A Comparison of Local Development in India and Indonesia.
Most economists think of common property as physical – a plot of land, a body of water, a forest – and as bounded within geographic space. In this paper, building on work in social theory, I argue that common property can also be social – defined within symbolic space.2 People can be bound by well defined social circles, creating agglomerations that have characteristics similar to common property. I call these circles and agglomerations “symbolic public goods” and make the case that such constructs are central to understanding collective action...
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Ravallion, Martin. 2005
Inequality is Bad for the Poor.
It has been argued that inequality should be of little concern in poor countries on the grounds that: (i) absolute poverty in terms of consumption (or income) is the overriding issue in poor countries, and (ii) the only thing that really matters to reducing absolute income poverty is the rate of economic growth. This article takes (i) as given but questions (ii). It is argued that there are a number of ways in which the extent of inequality in a society, and how it evolves over time, influences the extent of poverty today and the prospects for rapid poverty reduction in the future.
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Chirayath, Leila, Caroline Sage and Michael Woolcock. 2005
Customary Law and Policy Reform: Engaging with the Plurality of Justice Systems.
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The following papers were prepared in collaboration with the U. K. Department for International Development (DfID) and the World Bank's Social Development Department (see the November 15, 2004 Seminar on Promoting Equity in Development, under Consultations).

Andersson, Martin and Christer Gunnarsson. 2004
Egalitarianism in the Process of Modern Economic Growth: The Case of Sweden.
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Barrientos, Armando. 2004
Cash Transfers for Older People Reduce Poverty and Inequality.
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Black, Richard, Claudia Natali and Jessica Skinner, 2005
Migration and Inequality.
Introduction International migration is a powerful symbol of global inequality, whether in terms of wages, labour market opportunities, or lifestyles. Millions of workers and their families move each year across borders and across continents, seeking to reduce what they see as the gap between their own position and that of people in other, wealthier, places. In turn, there is a growing consensus in the development field that migration represents an important livelihood diversification strategy for many in the world’s poorest nations. This includes not only international migration, but also permanent, temporary and seasonal migrations within poorer countries, a phenomenon of considerable importance across much of Africa, Asia and Latin America.
Yet it is also clear that migration - and perhaps especially international migration - is an activity that carries significant risks and costs. As such, although migration is certainly rooted, at least in part, in income and wealth inequalities between sending and receiving areas, it does not necessarily reduce inequality in the way intended by many migrants. Much depends on the distribution of these costs and benefits, both within and between sending and receiving countries and regions. Also important in terms of the aggregate impact of migration on sending societies is the selectivity of migration itself. Clearly if most migrants were to come from the poorest sections of society, and they were to achieve net gains from migration, this would act to reduce economic inequality at least, all other things being equal. But migrants are not always the poorest, they do not always gain, and other factors are not equal.
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Boix, Carles. 2004
Spain: Development, Democracy and Equity.
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de Haan, Arjan. 2004
Disparities within India's Poorest Regions: Why Do the Same Institutions Work Differently in Different Places?
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Deshpande, Ashwini. 2005.
Affirmative Action in India and the United States.
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Lucero, Jose Antonio. 2004.
Indigenous Political Voice and the Struggle for Recognition in Ecuador and Bolivia.
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Gacitúa Marió, Estanislao and Michael Woolcock, with Marisa von Bulow. 2005
Assessing Social Exclusion and Mobility in Brazil.
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Moncrieffe, Joy M. 2004.
Beyond Categories: Power, Recognition and the Conditions for Equity.
The World Development Report (WDR) 2006 will reflect some important shifts in popular thinking about the relationship between inequality, growth and poverty. First, it will refute the Kuznetsian position that inequality has an invariably positive role and will, instead, assert that high levels of inequality can curtail the potential poverty-reducing impact of growth; conversely, where there is low or falling inequality, lower income groups will have a larger share of any increase in national income (Naschold 2002). Second, following Sen (1993; 1999) and others, the WDR will stress the importance of equity, arguing that poverty reflects deprivation in income and consumption, as well as in capabilities, such as health, education and civil liberties. It will maintain that individuals have differing levels of advantage, which, in addition to income, could be understood as their capability and freedom to make choices, and to convert their incomes into well-being—by establishing personal goals and having realistic means of attaining them. Therefore, it will attempt to define those policies and institutional arrangements that will supply the assets— political, social and economic—and opportunities that people in poverty need to transform their lives...
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Ross, Michael. 2004.
Mineral Wealth and Equitable Development.
In theory, new mineral wealth should offer governments a chance to boost economic growth and reduce inequality. In practice, it often leads to economic stagnation, civil conflict, and heightened inequality. To avoid these problems, governments must navigate a complex series of economic, social, and political challenges. One of the most difficult challenges is deciding how to deal equitably with the regional or local communities where the extraction occurs. Both the central government and local communities typically claim ownership of the resources, dispute the other side’s claims, and have some ability to slow or block projects they dislike. Mineral firms are often caught between the two sides. When these disputes can be resolved, mineral development can proceed; when they cannot – as in Bolivia, Sudan, Indonesia, and Papua New Guinea – the result may be political unrest and violent conflict. This paper explores the problems and opportunities that governments, firms, and local communities face when they must divide the costs and benefits of a mineral development project. It makes four central arguments:
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Sabates-Wheeler, Rachel. 2005
Asset Inequality and Agricultural Growth: How Are Patterns of Asset Inequality Established and Reproduced?
The purpose of this study is to explore the relationship between distributions of asset inequality, how these distributions are created and maintained, and agricultural growth. We intend to investigate what policies and institutions tend to promote equally shared growth. The motivating question that guides our study is: How does differential access to productive assets in the agricultural sector, at various levels (regional, community and household), effect inequalities in agricultural outcomes in terms of productivity and poverty? The dominant discourse on agricultural productivity and distribution has been largely technocratic, focusing on input-output relationships, defined and measured with a yardstick specific to the discipline of economics. We review certain strands of this literature in depth. A less well-known strand of literature emphasises the social and political constructions and reproductions of a variety of inequalities. While this is a relatively small literature we use it to broaden our understanding of the processes and institutions that link inequality and productivity. Furthermore, we use Ethiopian agriculture as a case study to highlight the persistent nature of inequality as causally related to historical choices and path dependency. Rather than unidirectional causalities, what we observe is a complex system whereby inequality affects growth which in turn reinforces processes that exacerbate and reproduce inequalities.
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Shepherd, Andrew and E. Gyimah-Boadi, with Sulley Gariba, Sophie Plagerson and Abdul Wahab Musa. 2004
Bridging the North South Divide in Ghana.
The intractability of regional inequality in Ghana Regional inequality is significant: average per capita incomes are 2-4 times lower than elsewhere in the country, and, while inter-regional income inequality accounts for only about 1/5 of total inequality in Ghana, it increased during the 1990s, and it could be anticipated that this trend will have continued into the new millennium. The incidence of poverty fell little in the north (and the average depth of poverty increased), while it fell moderately in much (but not all) of the south during the 1990s. Part of the reason may be the north’s dependence on ‘ food crop farming’, an occupation which did not benefit from the liberalised economy of the 1980s and 1990s. There have been disproportionately few investment projects in the northern regions in the early part of this decade, confirming the likelihood that there will be little growth-induced reduction of north-south inequality or poverty in the north.
From Journal of World Systems Research, Vol 12 N. 1 2006
A. Heshmati
The World Distribution of Income and Income Inequality: A Review of the Economics Literature
This review covers a range of measures and methods frequently employed in the empirical analysis of global income inequality and global income distribution. Different determinant factors along with the quantification of their impacts and empirical results from different case studies are presented. A number of issues crucial to the study of global income inequality are also addressed. These are the concepts, measurement and decomposition of inequality, the world distribution of income and inequality measured at different levels of aggregation: global, international and intra-national. We analyze income at each of these levels, discuss the benefits and limitations of each approach and present empirical results found in the literature and compare them with those based on the World Income Inequality Database. Research on world income inequality supports increased awareness of the problem, its measurement and quantification, the identification of causal factors and policy measures that affect global income inequality.
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United Nations Department of Economic and Social Affairs
Report on the World Social Situation 2005:

The Inequality Predicament
Focusing exclusively on economic growth and income generation as a development strategy is perilous as it leads to the accumulation of wealth by a few and deepens the poverty of many.
From Finance and Development - December 2005
The inequality trap
F.H.G. Ferreira and M. Walton
Market failures, inequalities, and investment inefficiency. In a world in which markets worked perfectly, investment decisions would have little to do with the income, wealth, or social status of the decision maker. However, for various reasons—mainly economic, but also political—markets are not perfect.
R. Jolly - 2005
Global inequality in historical perspective
Many of us have been astounded at the increases in inequality over the very long run – the increases in inequalities among households or individuals over most of the last two centuries within countries of most regions and between the groups of richer and poorer countries. Notwithstanding the improvements in some indicators of global inequality in the last two decades due to the impressive expansion of China and India, indicators of inequalities in recent years are all much higher than they appeared a hundred or two hundred years ago. All these trends are indicated by the rise in gini coefficients between 1820 and the 1990s and by the increases in the gaps in per capita income between the highest and lowest income groups.
M. Jantti and S. Sandstrom - 2005
Trends in income inequaliy: a critical examination of the evidence in WIID2
This paper examines changes across time in within-country inequality using the most recent, and we would argue, the most appropriate data at hand, the updated World Income Inequality Database (WIID2). We attempt to find whether it is possible to find robust evidence on inequality trends. Our empirical approach is to use so-called mixed-effects models with quintile groups means as the dependent variable, observed covariates as explanatory variables and allow for (at the most detailed level) country-specific intercepts and trends. This statistical framework allows us to assess in a structured fashion the actual patterns of inequality change across the world and to start to examine if these changes can be accounted for by readily observable economic and demographic factors.
From The Institute for the Study of Labor, Bonn
The World Distribution of Income and Income inequality
A. Heshmati, August 2004
"...world inequality has declined due to the faster growth in India and China than the world economy but at the cost of an increased within-country inequality. The total inequality is driven by a rise in inequality between countries affecting the evolution of world income inequality. Considering the global trends in income inequality results based on the WIID database shows that inequality is volatile prior to 1970 and more stable and increasing post 1986..."
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From The Institute for the Study of Labor, Bonn
Continental and sub-continental income inequality
A. Heshmati, August 2004
The regions based on available studies include Eastern Europe and former USSR, Scandinavian, Western Europe, OECD countries, small and medium sized developing countries, sub- Saharan Africa, Latin America, East Asia, South Asia, South-East Asia and Pacific.
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From The Institute for the Study of Labor, Bonn
Regional income inequality in selected large countries
A Heshmati, September 2004
The countries considered here cover transition (China and Russia), developing (India) and industrialised (USA) countries. Empirical results from the literature is further complemented and compared with those obtained from the WIID data covering post 1950s.
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Jean-Ives Duclos and Q. Wodon
What is "pro-poor"?
Université Laval, Quebec - 2004
Hong-Ghi Min
Inequality, the Price of Nontradables, and the Real Exchange Rate: Theory and Cross-Country Evidence
Poverty Reduction Group - World Bank - 2002
This paper provides theoretical and empirical evidence of a negative association between income inequality and real exchange rates. First, we build a theoretical model showing the transmission mechanism from inequality to real exchange rates. Second, we demonstrate that the theoretical argument have empirical support using cross-country data. The magnitude of association is large, significant, and robust to alternative specifications of the reduced form model and estimation methodologies. Those findings provide empirical support for PRSP since this study indicates that “equity-based growth” and “export-drive” are compatible policies. However, the robustly negative relationship between real exchange rates and inequality does not imply that dramatic redistributive policies will automatically bring real depreciation of the domestic currency, improve the external balance, and accelerate economic growth.
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Xin Meng, Xiaodong Gong and Youjuan Wang
Impact of Income Growth and Economic Reform on Nutrition Intake in Urban China: 1986-2000
From The Institute for the Study of Labor, Bonn - 2004
This paper investigates how estimates of the extent and trend of income poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning key parameters that influence the poverty line and estimated consumption levels. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors, alternative estimates of true per capita private incomes, alternative estimates of the share of income assumed to be consumed by the lower income groups, and alternative consumer price indices. We find that regardless of the assumptions we make within a reasonable range, a remarkable reduction in consumption poverty occurred in China during the 1990s. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. China’s record of reducing aggregate deprivations is encouraging, but must be interpreted with care, especially in view of some recent evidence concerning possible increases in consumption poverty (especially in urban areas) and worsening nutrition.
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Xin Meng, R. Gregory and Youjuan Wang
Poverty, Inequality, and Growth in Urban China, 1986-2000
From The Institute for the Study of Labor, Bonn - 2005
Although urban China has experienced spectacular income growth over the last two decades, increases in inequality, reduction in social welfare provision, deregulation of grain prices, and increases in income uncertainty in the 1990s have increased urban poverty. Using a large repeated cross-section household survey data from 1986 to 2000, this study maps out the change in income, inequality, and poverty over the 15 year period and investigates the determinants of poverty. It is found that the increase in the poverty rate in the 1990s is associated with the increase in the relative food price, and the need to spend on education, housing and medical care which were previously paid by the state. In addition, the increase in the saving rate of the poor due to an increase in income uncertainty contributes significantly to the increase in poverty measured in terms of expenditure. Even though income growth reduces poverty, the radical reform measures implemented in the 1990s have sufficiently offset this gain that urban poverty is higher in 2000 than in 1986.
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Sanjay G. Reddy and Camelia Minoiu
Chinese Poverty:
Assessing the Impact of Alternative Assumptions

Dept. of Economics, Barnard College, Columbia University and University Center for Human Values, Princeton University - 2005
This paper investigates how estimates of the extent and trend of income poverty in China between 1990 and 2001 vary as a result of alternative plausible assumptions concerning key parameters that influence the poverty line and estimated consumption levels. Our methodology focuses on the following sources of variation: alternative purchasing power parity conversion factors, alternative estimates of true per capita private incomes, alternative estimates of the share of income assumed to be consumed by the lower income groups, and alternative consumer price indices. We find that regardless of the assumptions we make within a reasonable range, a remarkable reduction in consumption poverty occurred in China during the 1990s. However, estimates of the extent of Chinese poverty in any year are greatly influenced by the assumptions made. China’s record of reducing aggregate deprivations is encouraging, but must be interpreted with care, especially in view of some recent evidence concerning possible increases in consumption poverty (especially in urban areas) and worsening nutrition.
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H. Kempf and S. Rossignol
Is Inequality Harmful for the Environment in a Growing Economy?
Université Paris-1 Panthéon Sorbonne - 2005
In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth.
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M. Lübker
Globalization and perceptions of social inequality
International Labour Office - 2004
Past decades have coincided with increasing inequality within a majority countries, and at the same time nation states have been under increasing pressure to reduce government interventions, a trend that has reduced their ability to apply redistributive policies. In addition many of the poorest countries have not gained from the potential benefits of globalization and fallen back further, increasing the gap between the poorest and the richest nations
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H. Jeong and R. M. Townsend
Growth and Inequality: Model Evaluation Based on an Estimation-Calibration Strategy
University of Southern California - 2003
R. Bénabou and J. Tirole
Belief in a Just World and Redistributive Politics
Princeton University and MIT - 2004
H. Rapoport and F. Docquier
The Economics of Migrants’ Remittances
From The Institute for the Study of Labor, Bonn - 2005
H. Jeong
Assessment of Relationship between Growth and Inequality: Micro Evidence from Thailand
University of Southern California - 2005
Anton Korinek, Johan A. Mistiaen, and Martin Ravallion
Survey Nonresponse and the Distribution of Income
World Bank Research Papers - 2005
Branko Milanovic and Lyn Squire
Does tariff liberalization increase wage inequality?
Some empirical evidence

World Bank Policy Research Working Papers - 2005
Moses Shayo
Nation, Class and Redistribution: Applying Social Identity Research to Political Economy.
Princeton University - 2005
Alberto Alesina and George-Marios Angeletos
Corruption, Inequality and Fairness
Massachusetts Institute of Technology - 2005
AbdelRahmen El Lahga
Comparing Wealth Polarization Over Time and Across Countries in Africa
Institut Superieur de Gestion, Tunisia - 2005
D. Checchi and C. Garcia-Penalosa
Labour Market Institutions and the Personal Distribution of Income in the OECD
Università degli Studi di Milano - IZA - CNRS - 2005
Diego Winkelried
Income Distribution and the Size of the Informal Sector.
St John’s College, University of Cambridge - 2005
Keiji Saito
A fallacy of wage differentials:
wage ratio in distribution

Graduate School of Economics, The University of Tokyo - 2005
Santiago Budría and Pedro Telhado Pereira
Educational Qualifications and Wage Inequality:
Evidence for Europe

From The Institute for the Study of Labor, Bonn - 2005
Herwig Immervoll, Horacio Levy, Christine Lietz, Daniela Mantovani, Cathal O‘Donoghue, Holly Sutherland and Gerlinde Verbist
Household Incomes and Redistribution in the European Union:
Quantifying the Equalising Properties of Taxes and Benefits

From the Institute for the Study of Labor, Bonn - 2005
A B Atkinson and Andrew Leigh
The Distribution of Top Incomes in New Zealand
The Australian National University - 2005
Branco Milanovic
Global income inequality: what it is and why it matters?
World Bank papers - 2005
Global inequality is a relatively recent topic. The first calculations of inequality across world citizens were done in the early 1980s.2 This is because in order to calculate global inequality, one needs to have data on (within-)national income distributions for most of the countries in the world, or at least for most of the populous and rich countries. But it is only from the early- to mid-1980s that such data became available for China, 3 Soviet Union and its constituent republics and large parts of Africa. Before we move to an analysis of global inequality, however it is useful to set the stage by delineating what topics we shall be concerned with and what not...

Ales Bulir
Income Inequality: Does Inflation Matter?
IMF Staff Papers - 2001
J. Humberto Lopez and Luis Servén
The World Bank
A Normal Relationship? Poverty, Growth, and Inequality
The World Bank - 2006
Era Dabla-Norris and Paul Wade
Rent seeking and endogeneous economic inequality
IMF working paper - 2001
E.F. Fama and K. R. French
Value versus growth: the international evidence
Draft August 1997

J. Flemming and J. Micklewright, 1999
Income Distribution, Economic Systems and Transition
We consider the differences in income distribution between market and planned economies in two ways. First, using benchmarks from the OECD area we review evidence from the countries of Central and Eastern Europe and the former Soviet Union during the socialist period. Second, we look at the transitions currently being made by the latter. In each case we review available data and the problems they present before considering in turn (i) the distribution of earnings of full-time employees, (ii) the distribution of individuals’ per capita household incomes, and (iii) the ways in which the picture is altered by non-wage benefits from work, price subsidies and social incomes in kind. For the socialist period we are able to consider long series of data, often covering several decades, and we can thus show the changes in the picture of distribution under the socialist system. We also emphasize the diversity across the countries concerned. For the period of transition, itself incomplete, the series are inevitably shorter but we are able to avoid basing conclusions on evidence drawn from single years. The picture during transition, like that under socialism, is varied. Russia has experienced very sharp increases in measured inequality to well above the top of the OECD range. The Czech Republic, Hungary and Poland have seen more modest rises. We note the lack of a satisfactory analytic framework in the literature that encompasses enough features of the transition, a framework which would help interpretation of the evidence.
International Monetary Fund
Fiscal Affairs Department - December 1998
Fundamental determinants of inequality and the role of the government
By V. Tanzi
This paper discusses the fundamental determinants of inequality. These are identified as world or market forces, social norms, ownership of real and human capital, and the role of government. The change in the relative role of these factors in determining inequality during economic development is analyzed.



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World indicators on the environment
World Energy Statistics - Time Series
Economic inequality

Dikhanov, Yuri. 2005.
Trends in Global Income Distribution 1970–2015
The paper studies recent trends in the global income distribution. The 1970-2000 estimates are supplemented with two 2015 scenarios: (a) distribution-neural growth (national distributions kept constant) and (b) pro-poor growth (the poor’s income grows at twice the average rate until 2015). The scenarios are based on historical 1990-2002 trends in GDP growth and UN population projections for 2015. In addition, two more simulations are presented: (c) transfers to the poor in 2000, and (d) distribution-neutral growth during 1970-2000. Scenario (c) examines the alleviation of poverty through targeted transfers occurring at one time, and scenario (d) studies effects of changes in national distributions on global poverty. Annex II discusses various inequality measures and shows difficulties of using the Gini coefficient for decomposing inequality.
Goodman, Alissa. 2005.
The Links between Income Distribution and Poverty Reduction in Britain
The 1980s was a period of rapidly increasing income inequality in Britain, accompanied by growing numbers of individuals falling into relative income poverty. While child poverty rates - in at least the two previous decades - had been very similar to those of the rest of the population, it was over this same period that a pronounced gap began to emerge: overall poverty rates were rising but child poverty rates were increasing by an even greater amount.
Throughout the early 1990s when the growth in inequality halted, the relative position of families in the income distribution did improve, although by the time Labour came to power in 1997, child poverty still remained significantly higher than for many other population groups, and than that experienced throughout the 1960s and 1970s.
Samman, Emma. 2005a.
Openness and Growth: An Empirical Investigation
In a recent and influential study, Trade, growth and poverty, Dollar and Kraay (2001) advance the argument that trade liberalization improves the growth prospects of poor countries. They demonstrate this point principally using multiple regression analysis with data for 100 countries, through which the share of trade in an economy is shown to have had a statistically significant positive effect on income growth in the 1980s and 1990s. On the basis of this analysis, they assert that developing countries should enact more liberal trade policies to foster growth and reduce poverty.
This paper finds several errors in the conceptual logic and methodology underlying the DK study. First, it argues that the authors employ selective evidence in support of their view while overlooking their data that is open to alternative interpretations. Next, it argues that their reliance on the share of trade in GDP as an indicator of trade liberalization is highly misleading. Third, the failure to carefully consider selection bias in the descriptive analysis further distorts the results. Finally, the regression analysis contains several problems relating to the data used and specification.
———. 2005c.
Wealth for the Few, Poverty for the Many: The Resource Curse—Examples of Poor Governance/Corporate Mismanagement Wasting Natural Resource Wealth.
The Grasberg mine – Irian Jaya
U.S company Freeport McMoran hit the headlines in the mid 1990s accused of serious human rights and environmental violations in its Grasberg mine in Irian Jaya. In its annual report, Freeport acknowledges responsibility for dumping over 125,000 tons of potentially toxic tailings into the rivers of Irian Jaya every day. The mine was the world’s largest gold mine and the third largest copper mine in the world valued between $50 and %60 billion. According to reports by the BBC the mine has been responsible for the deaths of hundreds of people since the mine began operations in 1972 turning a blind eye while the Indonesian military killed and tortured dozens of native people in the area around the mining concession.
Sridhar, Devi. 2005.
Inequality in the United States Healthcare System
Although the United States (US) has been rated highly in the United Nations Human Development Index, the shining health indicators of the general population do not reflect the great disparity in the health of certain subpopulations. Absolute health indicators often make the suffering of the vulnerable, especially those living in the wealthiest nation, invisible to the world.
In this paper, I will demonstrate why the US private-public healthcare system should not be used as a model for other countries as it exacerbates the inequality in access to care and health status between the haves and the have-nots.
Sam Moyo, 2004
Socio-economic dominance of ethnic and racial groups – the African experience
This paper is one of many contributions commissioned by the UNDP’s HDR report office. The objective of the paper is to examine the nature and extent of socio-economic dominance and exclusion in Africa, including efforts to redress inequities. The specific objectives are to develop a conceptual framework examining ethnic and racial socio-economic dominance in Africa; identify the historical and specifically colonial roots of ethnicity and socio-economic disparities; assess contemporary empirical patterns of socio-economic disparities along ethnic and racial lines, based upon key selected variables; analyze the strategies used to mobilize ethnicity and race towards the accumulation of power and economic resources; and to examine public policies and civic strategies aimed at redressing ethnic and racial resource imbalances.

From the Joseph Rowntree Foundation - 30 April 2007
Poverty twice as likely for minority ethnic groups: education fails to close the gap
The poverty rate for
Britain’s minority ethnic groups stands at 40%, double the 20% found amongst white British people, according to new research published today (30 April) by the Joseph Rowntree Foundation (JRF). Minority ethnic groups are also being overlooked for jobs and are being paid lower wages, despite improvements in education and qualifications.
The research highlights the differences between minority ethnic groups with 65% of Bangladeshis living in poverty compared to 55% of Pakistanis, 45% of Black Africans and 30% of Indians and Black Caribbeans. Over half of Bangladeshi, Pakistani and Black African children in the UK are growing up in poverty with a staggering 70% of Bangladeshi children growing up poor.


UNU-WIDER - December 2006
Pioneering Study Shows Richest Two Percent Own Half World Wealth
The richest 2% of adults in the world own more than half of global household wealth according to a path-breaking study released today by the Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER).
The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.


E. M. Uslaner - 2005
The inequality trap
Successful (or “well-ordered”) democracies are marked by high levels of trust in other people and in government, low levels of economic inequality, and honesty and fairness in the public sphere. Trust in people, as the literature on social capital has shown, is essential for forming bonds among diverse groups in society... Trust in government is essential for political stability and compliance with the law. Corruption robs the economy of funds and leads to less faith in government (perhaps also to less faith in fellow citizens) and thus lower compliance with the law. And institutions seen as biased (unfair) cannot secure compliance and may exacerbate inequalities in society.
United Nations University
WIDER Conference on
Spatial Inequality in Asia
UNU Tokyo, 28-29 March 2003
Themes addressed by the conference:
- Spatial inequality in China
- Inequality and conflict
- Poverty and inequality in India
- Poverty in Asia
- Location and Migration
- Trade and inequality
- Spatial inequality in Asia
- Spatial inequalities in Former Soviet Union
Jordi Estivill - 2003
Concepts and strategies for combating social exclusion. An overview
Social exclusion is a phenomenon of both the past and the present, and if nothing is done, it will also be one of the future. It affects millions of persons who struggle to survive in the hardest living and working conditions. Throughout history, the forms taken by exclusion have evolved, both with regard to their characteristics and the attitudes adopted towards them. Exclusion currently takes on different appearances on the various continents, and even within them, at the regional and national levels. But it affects everyone. Programmes and measures addressing its various aspects have also changed and are not the same in all four corners of the world. The actors involved do not play the same role in their desire to reduce and eradicate exclusion.
The Christian Science Monitor - August 03, 2006
New Treasury head eyes rising inequality
In his first major speech Monday, Henry Paulson pushed America's wide income gap onto the agenda.
By Mark Trumbull - Staff writer of The Christian Science Monitor
The wide gap between the richest and poorest Americans has not often been the topic of choice for the Bush administration's two previous Treasury secretaries. So it was notable this week that Henry Paulson, the president's latest Treasury head, chose to put that issue on his short list - as one of the nation's four prominent, long-term economic challenges. Mr. Paulson's head-on approach during one of his first public appearances as secretary differs from his predecessors' strategies, some analysts say.
The wealth gap is hardly new, but income inequality has been growing in America over the past quarter century. Even as average worker productivity has surged, average hourly earnings have stagnated. Meanwhile, the nation's economic elites have prospered.
A. Figueroa, Catholic University of Peru - 1999
Social exclusion and rural development

This paper examines factors that explain social inequalities in the Third World. It develops a new theoretical approach, which focuses on social inequality and introduces the concept of social exclusion into the analysis. In so doing, it specially addresses the question: is inequality a result of some peculiar form of social integration, or rather a result of some exclusions taking place in the social process? Social inequality is conceived in this paper in broader terms than income inequality. The social process is, for analytical purposes, divided into the three components: economic, political, and cultural. Social inequality refers to the aggregation of inequality on these components.
Social exclusion is also considered in a particular way. As a fact of life, we know that the same group of people who participate in some social relations may, at the same time, be excluded from others. Hence, to say that a person is excluded from something is a purely descriptive statement, with no analytical value. In analytical terms, the question is whether there are some exclusions that have important effects upon social inequality. Which are these exclusions in a particular society? Who is excluded and from what? Why do these exclusions take place?
René Morissette, Xuelin Zhang and Marie Drolet
The Evolution of Wealth Inequality in Canada, 1984-1999
November 2003
From the Official UK Statistics:
Social and Economic inequalities in the United Kingdom
2006
From The Economist - 10 August 2006
Class: But did they buy their own furniture?
Class is no longer a reliable guide to anything in Britain. But it still matters
WHEN George Orwell wrote in 1941 that England was “the most class-ridden country under the sun”, he was only partly right. Societies have always had their hierarchies, with some group—Boston's Brahmins, France's énarques, the Communist Party of China—perched at the top. In the Indian state of Bihar the Ranveer Sena, an upper-caste private army, even killed to stay there. By that measure class in Britain hardly seems entrenched. But in another way Orwell was right, and continues to be. As a new YouGov poll for The Economist shows, Britons are surprisingly alert to class—both their own and that of others.
From The Institute for the Study of Labor, Bonn
Poverty persistence in Sweden
J. Hamsem and R. Wahlberg, July 2004
Jesper Roine and Daniel Waldenström
Top Incomes in Sweden over the Twentieth Century

Stockholm School of Economics - 2005
United Nations University
World Institute for Development Economic Research:

DP2003/08
Stefan Dercon and John Hoddinott:
Health, Shocks and Poverty Persistence (PDF 156KB)

DP2003/25 Kym Anderson:
Trade Liberalization, Agriculture, and Poverty in Low-income Countries (PDF 224KB)
This paper offers an economic assessment of the opportunities and challenges provided by the WTO’s Doha Development Agenda, particularly through agricultural trade liberalization, for low-income countries seeking to trade their way out of poverty. After discussing links between poverty, economic growth and trade, it reports modelling results showing that farm product markets remain the most costly of all goods market distortions in world trade. It focuses on what such reform might mean for countries of South Asia and sub-Saharan Africa in particular, both without and with their involvement in the MTN reform process. What becomes clear is that if those countries want to maximize their benefits from the Doha round, they need also to free up their own domestic product and factor markets so their farmers are better able to take advantage of new market-opening opportunities abroad. Other concerns of low-income countries about farm trade reform also are addressed: whether there would be losses associated with tariff preference erosion, whether food-importing countries would suffer from higher food prices in international markets, whether China’s WTO accession will provide an example of trade reform aggravating poverty via cuts to prices received by Chinese farmers, and the impact on food security and poverty alleviation. The paper concludes with lessons of relevance for low-income countries for their own domestic and trade policies.
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DP2003/28
Giovanni Andrea Cornia and Tony Addison with Sampsa Kiiski:
Income Distribution Changes and their Impact in the Post-World War II Period (PDF 326KB)

This paper analyses the trends in within-country inequality during the post-World War II period, with particular attention to the last 20 years. This is done on the basis of a review of the relevant literature and of an econometric analysis of inequality trends in 73 countries, which account for 80 per cent of the world’s population and 91 per cent of world GDP-PPP. The paper suggests that the last two decades have been characterized by a surge in within-country inequality in about two-thirds of the developing, developed and transitional nations analysed. It also suggests that in those countries where the upsurge in inequality was sizeable or where inequality rose from already high levels, growth and poverty alleviation slowed down perceptibly. While this trend towards higher inequality differs substantially across countries in its extent, timing and specific causes, it marks a clear departure from the pattern observed during the first 30 years of the post-World War II period during which a widespread move towards greater egalitarianism was noted in the majority of the socialist, developing and industrialized economies, with the exception of Latin America and parts of Sub-Saharan Africa.
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DP2003/36
Kræn Blume, Björn Gustafsson, Peder J. Pedersen and Mette Verner:
A Tale of Two Countries: Poverty among Immigrants in Denmark and Sweden since 1984 (PDF 242KB)

DP2003/52
Chris Elbers, Peter Lanjouw, Johan Mistiaen, Berk Özler and Ken Simler:
Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries (PDF 340KB)

DP2003/57
Jed Friedman:
How Responsive is Poverty to Growth? A Regional Analysis of Poverty, Inequality, and Growth in Indonesia, 1984-99 (PDF 655KB)

DP2003/67
Ruslan Yemtsov:
Quo Vadis? Inequality and Poverty Dynamics across Russian Regions (PDF 439KB)

DP2003/66
Dirk Willem te Velde and Oliver Morrissey:
Spatial Inequality for Manufacturing Wages in Five African Countries (PDF 238KB)

DP2003/65
Michael F?er, David Jesuit and Timothy Smeeding:
Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourg Income Study (PDF 251KB)

DP2003/70
Luc Christiaensen, Lionel Demery and Stefano Paternostro:
Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s (PDF 281KB)

DP2003/69
Almas Heshmati:
Measurement of a Multidimentional Index of Globalization and its Impact on Income Inequality (PDF 294KB)
In recent years, theoretical research on the link between globalization and world inequality has been intense. However, analysis of the link at the empirical level is scarce. The causal connections between globalization and inequality in developing nations are best understood by building on what we have learned about inequality change during the pre-globalization phase. Extensive empirical research points to two stylized facts. First, there is no structural relationship between growth and inequality. Second, income inequality levels in the pre-globalization phase were generally immobile and trendless.
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DP2003/74
Stanislav Kolenikov and Anthony Shorrocks:
A Decomposition Analysis of Regional Poverty in Russia (PDF 326KB)

DP2003/73
Javier Escobal and Máximo Torero:
Adverse Geography and Differences in Welfare in Peru (PDF 3120KB)

DP2003/90
Simon Appleton:
Regional or National Poverty Lines? The Case of Uganda in the 1990s (PDF 204KB)

DP2004/02
Bart Capéau and André Decoster:
The Rise or Fall of World Inequality: A Spurious Controversy? (PDF 233KB)

DP2004/01 Anthony Shorrocks and Guanghua Wan: Spatial Decomposition of Inequality (PDF 200KB)

DP2004/04 Erik Thorbecke: Conceptual and Measurement Issues in Poverty Analysis (PDF 211KB)

RP2004/04 David E. Sahn and David C. Stifel: Urban-Rural Inequality in Living Standards in Africa (PDF 280KB)

RP2004/03 Michael Bleaney and Akira Nishiyama: Economic Growth, Income Distribution and Poverty: Time-series and Cross-country Evidence from the CFA-zone Countries of sub-Saharan Africa (PDF 244KB)

RP2004/02 David Fielding: How Does Monetary Policy Affect the Poor? Evidence from the West African Economic and Monetary Union (PDF 329KB)

RP2004/01 Anthony Shorrocks: Inequality and Welfare Evaluation of Heterogeneous Income Distributions (PDF 457KB)

RP2004/12 S. Subramanian: Poverty Measures and Anti-Poverty Policy with an Egalitarian Constraint (PDF 217KB)

RP2004/11 S. Subramanian: Some Simple Analytics of Poverty Redress through Direct Income Transfers and Wage Employment Programmes: A Review and Commentary (PDF 231KB)

RP2004/10 S. Subramanian: A Re-scaled Version of the Foster-Greer-Thorbecke Poverty Indices based on an Association with the Minkowski Distance Function (PDF 167KB)

RP2004/19 Jean-Paul Azam: Poverty and Growth in the WAEMU after the 1994 Devaluation (PDF 393KB)

RP2004/26 Ann Harding, Rachel Lloyd, Anthea Bill, and Anthony King Assessing Poverty and Inequality at a Detailed Regional Level: New Advances in Spatial Microsimulation (PDF 624KB)

RP2004/25 S. Subramanian: Indicators of Inequality and Poverty (PDF 272KB)

RP2004/33 Susan Harkness: Social and Political Indicators of Human Well-being (PDF 254KB)

RP2004/32 Michael Grimm: The Medium- and Long-term Effects of an Expansion of Education on Poverty in Côte d’Ivoire: A Dynamic Microsimulation Study (PDF 301KB)

RP2004/31 Douglas A. Hicks: Inequalities, Agency, and Well-being: Conceptual Linkages and Measurement Challenges in Development (PDF 177KB)

RP2004/30 Andrew Sumner: Economic Well-being and Non-economic Well-being: A Review of the Meaning and Measurement of Poverty (PDF 227KB)

RP2004/29 Mariano Rojas: Well-being and the Complexity of Poverty: A Subjective Well-being Approach (PDF 243KB)

RP2004/43 S. Mansoob Murshed and Scott Gates: Spatial Horizontal Inequality and the Maoist Insurgency in Nepal (PDF 212KB)

RP2004/42 Arne Bigsten and Abebe Shimeles: Prospects for ‘Pro-Poor’ Growth in Africa (PDF 261KB)

RP2004/41 Sara Lelli: What Money Can’t Buy: The Relevance of Income Redistribution for Functioning Levels (PDF 353KB)

RP2004/40 Oleksiy Ivaschenko: Longevity in Russia’s Regions: Do Poverty and Low Public Health Spending Kill? (PDF 630KB)

RP2004/39 Arne Bigsten and Abebe Shimeles: Dynamics of Poverty in Ethiopia (PDF 487KB)

RP2004/38 Nicholas Minot and Bob Baulch: Poverty Mapping with Aggregate Census Data: What is the Loss in Precision? (PDF 476KB)

RP2004/37 Mozaffar Qizilbash: On the Arbitrariness and Robustness of Multi-Dimensional Poverty Rankings (PDF 228KB)

RP2004/36 Kathryn Anderson and Richard Pomfret: Spatial Inequality and Development in Central Asia (PDF 311KB)

RP2004/35 Henning Tarp Jensen and Finn Tarp: Trade Liberalization and Spatial Inequality: A Methodological Innovation in Vietnamese Perspective (PDF 231KB)

RP2004/34 Arsenio M. Balisacan and Nobuhiko Fuwa: Changes in Spatial Income Inequality in the Philippines: An Exploratory Analysis (PDF 289KB)

RP2004/57 Sarah White and Jethro Pettit: Participatory Approaches and the Measurement of Human Well-being (PDF 165KB)

RP2004/53 Shatakshee Dhongde: Decomposing Spatial Differences in Poverty in India (PDF 109KB)

RP2004/49 Somik V. Lall and Sanjoy Chakravorty: Industrial Location and Spatial Inequality: Theory and Evidence from India (PDF343 KB)

RP2004/48 Tomoki Fujii: Commune-Level Estimation of Poverty Measures and its Application in Cambodia (PDF 305KB)

RP2004/59 S. Subramanian: Social Groups and Economic Poverty: A Problem in Measurement (PDF 148KB)

RP2004/63 Mark McGillivray and Farhad Noorbakhsh: Composite Indices of Human Well-being: Past, Present, and Future (PDF 167KB)

DP2004/07 Ruut Veenhoven: Subjective Measures of Well-being (PDF 250KB)

DP2004/06 Des Gasper: Human Well-being: Concepts and Conceptualizations (PDF 291KB)

DP2004/05 Stephan Klasen: Gender-Related Indicators of Well-Being (PDF 253KB)

RP2004/07 Barry McCormick and Jackline Wahba: Return International Migration and Geographical Inequality: The Case of Egypt (PDF 269KB)

RP2004/06 Mattia Romani: Love Thy Neighbour? Evidence from Ethnic Discrimination in Information Sharing within Villages (PDF 397KB)

RP2005/47 Justine Nannyonjo: Conflicts, Poverty and Human Development in Northern Uganda (PDF 151KB)

RP2005/46 Indranil Dutta and Ajit Mishra: Inequality, Corruption, and Competition in the Presence of Market Imperfections (PDF 247KB)

RP2005/45 Léonce Ndikumana: Distributional Conflict, the State, and Peacebuilding in Burundi (PDF 139KB)

RP2005/57 Ethan Ligon: Poverty and the Welfare Costs of Risk Associated with Globalization (PDF 213KB)

RP2005/59 S. Subramanian: Reckoning Inter-group Poverty Differentials in the Measurement of Aggregate Poverty (PDF 264KB)

RP2005/64 Bram Thuysbaert and Ricardas Zitikis: Consistent Testing for Poverty Dominance (PDF 237KB)

RP2005/63 Rafael E. De Hoyos: The Microeconomics of Inequality, Poverty and Market Liberalizing Reforms (PDF 472KB)

RP2005/62 S. Subramanian: Poverty Measurement and Theories of Beneficence (PDF 151KB)

RP2005/71 Peter Quartey: Financial Sector Development, Savings Mobilization and Poverty Reduction in Ghana (PDF 304KB)

RP2005/75 George Mavrotas and S. Mansoob Murshed: The Poverty Macroeconomic Policy Nexus: Some Short-run Analytics (PDF 203KB)

RP2005/40 Rhys Jenkins: Globalization, Production and Poverty (PDF 128KB)

RP2005/02 Alain Chateauneuf and Patrick Moyes: Measuring Inequality Without the Pigou–Dalton Condition (PDF 363KB)

DP2005/03 Rehman Sobhan: A Macro Policy for Poverty Eradication through Structural Change (PDF 84KB)

DP2005/08 Machiko Nissanke and Erik Thorbecke: Channels and Policy Debate in the Globalization-Inequality-Poverty Nexus (PDF 219KB)

RP2005/41 Jinhua Zhao: The Role of Information in Technology Adoption under Poverty (PDF 166KB)

RP2005/37 Almas Heshmati: The Relationship between Income Inequality, Poverty, and Globalization (PDF 194KB)

RP2005/36 Adriaan Kalwij and Arjan Verschoor: A Decomposition of Poverty Trends across Regions: The Role of Variation in the Income and Inequality Elasticities of Poverty (PDF 751KB)

RP2005/34 Indranil Dutta and Ajit Mishra: Does Inequality lead to Conflict? (PDF 273KB)

RP2005/33 Carol Graham: Globalization, Poverty, Inequality, and Insecurity: Some Insights from the Economics of Happiness (PDF 184KB)

RP2005/32 Kaushik Basu: Globalization, Poverty and Inequality: What Is the Relationship? What Can Be Done? (PDF 111KB)

RP2005/30 Pranab Bardhan: Globalization and Rural Poverty (PDF 94KB)

RP2005/29 Martin Ravallion: Looking Beyond Averages in the Trade and Poverty Debate (PDF 252KB)

RP2005/28 Rimjhim M. Aggarwal: Globalization, Local Ecosystems, and the Rural Poor (PDF 103KB)

RP2005/27 Gregory Graff, David Roland-Holst, and David Zilberman: Biotechnology and Poverty Reduction in Developing Countries (PDF 133KB)

RP2005/22 Matthew Clarke: Assessing Well-being Using Hierarchical Needs (PDF 119KB)

RP2005/21 Daniel T. Haile: Wealth Distribution, Lobbying and Economic Growth: Theory and Evidence (PDF 436KB)

DP2006/04 George Rapsomanikis and Alexander Sarris: The Impact of Domestic and International Commodity Price Volatility on Agricultural Income Instability: Ghana, Vietnam and Peru (PDF 152KB)

DP2006/06 Markus Jäntti, Juho Saari, and Juhana Vartiainen: Growth and Equity in Finland (PDF 273KB)

DP2006/03 Basudeb Guha-Khasnobis and Gautam Hazarika: Women’s Status and Children’s Food Security in Pakistan (PDF 168KB)

RP2006/56 Nanak Kakwani and Hyun H. Son: Pro-Poor Growth: The Asian Experience (PDF 121KB)

RP2006/64 Lars Osberg and Kuan Xu: How Should We Measure Global Poverty in a Changing World? (PDF 246KB)

RP2006/58 Yasuyuki Sawada and Jonna P. Estudillo: Trade, Migration, and Poverty Reduction in the Globalizing Economy: The Case of the Philippines (PDF 298KB)

RP2006/59 Terutomo Ozawa: Asia’s Labour-Driven Economic Development, Flying-Geese Style: An Unprecedented Opportunity for the Poor to Rise? (PDF 287KB)

RP2006/51 Alemayehu Geda, Abebe Shimeles and Daniel Zerfu: Finance and Poverty in Ethiopia: A Household Level Analysis (PDF 270KB)

RP2006/46 Machiko Nissanke and Erik Thorbecke: A Quest for Pro-Poor Globalization (PDF 140KB)

RP2006/45 M. S. Qureshi: Trade Liberalization, Environment and Poverty: A Developing Country Perspective (PDF 369KB)

RP2006/44 Yujiro Hayami: Globalization and Rural Poverty: A Perspective from a Social Observatory in the Philippines (PDF 197KB)

RP2006/41 N.R. Bhanumurthy and Arup Mitra: Globalization, Growth and Poverty in India (PDF 244KB)

RP2006/38 Melanie Grosse, Kenneth Harttgen, and Stephan Klasen: Measuring Pro-Poor Progress towards the Non-Income Millennium Development Goals (PDF 346KB)

RP2006/34 Eric M. Uslaner: Corruption and Inequality (PDF 280KB)

RP2006/32 Richard Jolly:
Inequality in Historical Perspective (PDF 79KB)
Adam Smith, Tom Paine, John Stuart Mill and Karl Marx were all bold and outspoken about the injustices of extreme inequality, nationally and internationally. Yet by almost every standard, global inequality has grown substantially since they were writing, and national income inequality also over the last two or three decades. There is a case today for more outspokenness about the extremes of inequality, both about the causes and how these causes are linked to extreme injustices in the past.
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RP2006/15 Farhad Noorbakhsh: International Convergence or Higher Inequality in Human Development? Evidence for 1975 to 2002 (PDF I53KB)

RP2006/10 Giovanni Andrea Cornia and Leonardo Menchini: Health Improvements and Health Inequality during the Last 40 Years (PDF 161KB)