The correlates of declining income inequality among emerging and developing economies during the 2000s

2022 ◽  
Vol 152 ◽  
pp. 105785
Author(s):  
Edward Anderson
Keyword(s):  
Income Inequality ◽  
Developing Economies

scholarly journals Innovations in achieving sustainable economic performance under income inequality

2021 ◽  
Vol 5 (2) ◽  
pp. 146-154
Author(s):  
Inna Cabelkova ◽  
Manuela Tvaronaviciene ◽  
Wadim Strielkowski
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Inequality ◽  
Economic Performance ◽  
Financial Services ◽  
Developing Economies ◽  
Well Being ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Impact

The negative effect of income inequality on economic growth represents a topic that constitutes a broad topic of research in the standard economic theory. One of the immediate consequences of income inequality is diminished consumption. Many «poor» customers cannot provide sufficient demand for the producers, causing overproduction that might lead to an economic crisis. It constitutes a problem because sustainable economic performance needs to be achieved under the conditions of income inequality. Reducing social and economic inequality in countries is an essential step towards ensuring that no one is left behind. It is also part of the 10th Sustainable Development Goal aimed to reduce it by 2030. Inequality is based on the income distribution between the top 1% and the bottom 99% of households in any given country. The degree of inequality could play a beneficial role if it is driven by market forces and is associated with incentives to increase growth. In developing and emerging countries, greater equality and improvements in living standards are needed to enable populations to flourish. Inequality reduction is one of the most critical steps a government could take to improve the well-being of its population. The income inequality growth increases human capital in poor countries and reduces it in high and middle-income countries. In poorer countries, it increases them, but in higher – and middle-income countries, it reduces them. Income inequality could be reduced by improving human capital and general skill levels, correcting labor-market policies, and making better use of financial services. In turn, sustainable economic growth could reverse the negative effects of inequality, reducing the need for high-wage and higher-earning households. Thus, it provides higher economic growth. This paper discusses three ways to circumvent the impact of decreasing consumption on economic growth adopted in developing economies over the last fifty years, such as increasing exports, providing loans for consumption, and printing new money. The findings showed that none of these methods seem to be sustainable in the long run. Thus novel and innovative mechanisms that would allow our economy to reduce inequality are necessary and need to be put into place.

scholarly journals A Survey of Inclusive Growth Policy

Economies ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 65 ◽  
Author(s):  
Almas Heshmati ◽  
Jungsuk Kim ◽  
Jacob Wood
Keyword(s):  
Labor Market ◽  
Income Inequality ◽  
Developing Economies ◽  
Methodological Approach ◽  
Inclusive Growth ◽  
Growth Policy ◽  
Biased Technological Change ◽  
Silver Bullet ◽  
Generous Welfare ◽  
Do So

Background: Since the latter part of the 20th Century, countries have been particularly challenged by the trade-off that exists between delivering generous welfare provisions and strong economic growth. Such dynamics have stimulated a need to better understand the causes of income inequality so as to better formulate policies that foster inclusive growth and reduce growing concerns surrounding income inequality. Method: Given its ability to succinctly summarize, analyze, and synthesize an extant body of literature from a certain genre of scholastic endeavor, this study utilizes a literature review as its proposed methodological approach. Results: From our assessment of the literature, we identified four key areas that contribute significantly to income inequality in both advanced and developing economies, these include: (i) pursuing skill-biased technological change; (ii) enhancing education systems; (iii) consolidation of globalization; and (iv) reform of the labor market and its relevant institutions. Conclusion: There is no silver bullet to achieving inclusive growth. Any policy manifesto must seek to offer a coordinated policy platform that looks to deal directly with the causes of inequality. In order to do so, consideration should be given to a range of policy areas including fiscal, education, trade liberalization, and labor market reforms.

The View From Orthodoxy: Point/Counterpoint on Globalization and Human Rights

2018 ◽  
Vol 48 (2) ◽  
pp. 365-370
Author(s):  
Claudio Schuftan
Keyword(s):  
Human Rights ◽  
Income Inequality ◽  
Developing Economies ◽  
Human Rights Violations ◽  
Industrialized Countries ◽  
Poor Countries ◽  
The Many ◽  
Rich Countries ◽  
Long Term Trend

The long-term trend of globalization masks a frank deterioration of the situation of the have-nots. Since 1970, polarization has grown faster than inequality, with alarming consequences for human rights and the economy overall. Globalization has continued to enrich the few at the expense of providing a decent livelihood and respecting the human rights of the many. Industrialized countries continue to be the rule makers—poor countries the rule takers. Rich countries go for growth, but an inequality-entrenching growth that brings about human rights violations and poverty. In many developing economies, income inequality and the violation of human rights have clearly increased over the past 3 decades. Discriminated losers have been fighting globalization before it had a name; they still are. Globalization has thus actually resulted in greater income inequality plus human rights violations and disrupted lives. Globalization may well be a finished project. We must remind our respective governments that they have the power to improve working people’s lives so that they, once and for all, address the needs of those who lose out from technological change and globalization. Otherwise, our political problems will only deepen.

Exploring the relationship between corruption, income inequality and informal sector in developing countries: a panel quantile approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdul Rashid ◽  
Farooq Ahmad ◽  
Sarir Ud Din ◽  
Shar Zaman
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Income Distribution ◽  
Informal Sector ◽  
Developing Economies ◽  
Content Type ◽  
Labor Exploitation ◽  
Panel Quantile Regression ◽  
Regression Approach ◽  
The Government

PurposeThis paper aims to explore the impact of corruption (CP) on income inequality (IN) by considering the size of informal sector (IFS) at different levels of percentiles.Design/methodology/approachThis paper uses a panel quantile regression approach for a sample of 50 developing countries. The study also applies panel co-integration (Kao residual co-integration test) in order to examine the long-run relationship between CP and IN.FindingsThis paper using a panel quantile regression approach shows that the high incidence of IFS in an economy marginalizes CP's positive effect because it works as a source of poor peoples' livelihood and skillful individuals. The spread of IFSs in the developing economies may raise earnings among groups and individuals who remain unemployed. Moreover, the results show that CP creates asymmetry in income distribution; fascinatingly, the asymmetric income distribution is high when CP is at higher percentiles.Research limitations/implicationsDue to non-availability of IFS, we restrict our analysis up to 50 developing countries.Practical implicationsCP devastates the effectiveness of institutions over time. Therefore, the government should have to take bold steps to reduce CP in society. Another policy implication of this study is that the government should reduce CP to decrease IN in less developing countries. Moreover, to increase the net base, the authorities need to bring IFS under the umbrella of regulation to avoid inequality in society. In developing economies, a higher part of labor force is related to IFS; therefore, our findings suggest a dire need to reduce labor exploitation in IFS. The policymakers can reduce labor exploitation by reducing the size of IFS, which ultimately reduces IN.Social implicationsOn the basis of the authors’ findings, this paper further suggests that it is mandatory for government to reduce CP in order to reduce IN. Moreover, to reduce IN, one needs to reduce the size of IFS.Originality/valueThis study is unique as it is the first that examined the role of IFS in establishing the effect of CP on IN for developing countries at different percentiles.

Institutional Quality and Income Inequality in Developing Countries: A Dynamic Panel Threshold Analysis

2021 ◽  
pp. 146499342110167
Author(s):  
Lawrence Adu Asamoah
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Developing Economies ◽  
Threshold Model ◽  
Institutional Quality ◽  
Threshold Value ◽  
Threshold Effect ◽  
Policy Implications ◽  
Dynamic Panel ◽  
Negative Effect

This study investigates whether there is an institutional quality threshold effect on income distribution. We employ the dynamic panel threshold model developed by Kremer et al. (2013: Empirical Economics 44(2): 861–878) and a panel of both developing and advanced countries from 1995 to 2017. Our findings suggest the inequality-reducing effect of institutional quality is disproportionate. More specifically, we find two-pronged results: (i) when institutional quality is measured by World Governance Indicators, we find quadratic effect for advanced countries, but a monotonic negative effect for developing countries; (ii) when the International Country Risk Guide-based measure of institutional quality is used as the threshold variable, we find a Kuznets inverted U-shaped relationship between institutions and income inequality for both advanced and developing countries. The results also show a higher threshold value for developing countries compared to advanced economies. These results are robust to both measurement and endogeneity issues. The results have interesting policy implications for income inequality in developing economies.

Income Inequality and Economic Growth: Heterogeneity and Nonlinearity

2019 ◽  
Vol 24 (3) ◽  
Author(s):  
Abebe Hailemariam ◽  
Ratbek Dzhumashev
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Measurement Errors ◽  
Developing Economies ◽  
Threshold Effect ◽  
Growth Effect ◽  
Developed Economies ◽  
Nonlinear Growth ◽  
Cross Country ◽  
The Relationship

AbstractThis paper examines the relationship between income inequality and economic growth in a broad panel of countries over the period from 1965 to 2014. We utilize an improved dataset for inequality with reduced measurement errors, which fosters cross-country comparability. In addition, we investigate whether accounting for heterogeneity across countries alters the estimated effect of inequality on growth, and whether the inequality-growth nexus varies with the level of income inequality. Our estimates show that after accounting for heterogeneity, the nonlinear growth effect of income inequality remains statistically and economically significant. We find a threshold effect of inequality on economic growth, and this threshold is higher for developing economies than for developed economies.

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