How Effective Is Fiscal Decentralization for Inequality Reduction in Developing Countries?

The relationship between fiscal decentralization and vertical inequality has long received attention by fiscal federalism theorists. However, horizontal inequality has been largely overlooked. This study will present a novel empirical examination of the relationship between fiscal decentralization, vertical inequality, and horizontal inequality. Specifically, it will focus on how institutional quality and military expenditure affect the fiscal decentralization–inequality nexus across 33 developing countries in the period 1990–2014. Findings indicate that varieties of fiscal authority have a significant effect on distribution of income and ethnic inequality. This depends on the level of institutions and defense spending achieved by these developing countries.

Social Mobility and Horizontal Inequality

Research on social mobility has paid considerable attention to links with inequality. The vast majority of this work, however, has focused on ‘vertical’ inequality between individuals or households, rather than ‘horizontal’ inequality between groups in society. This chapter speaks to the latter, with focus on the persistence over time of horizontal inequalities between ethnic and culturally defined groups. Not only is such persistence due to low intergenerational mobility overall, we argue, it also is due to lower mobility for disadvantaged as compared with advantaged groups in many societies. Group-based discrimination, among other factors, contributes. We posit further that the relationship between low mobility and persistent horizontal inequality is a comparatively larger problem for Global South as compared to Global North countries, because they are, on average, contexts with lower intergenerational mobility, higher horizontal inequality, and weaker state capability and the rule of law.

Secessionist conflict as diversion from inequality: The missing link between grievance and repression

Why do some secessionist claims turn violent and others stay peaceful? This study elucidates the role of inequality and diversionary tactics of states in secessionist violence. Horizontal inequality increases the grievances of minorities and fuels rebellion. States with high vertical inequality prefer to suppress peripheries instead of increasing redistribution and alleviating their material grievances. States shun redistributing toward peripheral regions because sharing with one group prompts demands for redistribution among other groups, including the dominant group. Fearing resource reallocation at the national scale and potential loss of their elevated social status, the elites opt for violent solutions for secessionist crises. Using a new dataset on self-determination movements I test these conjectures and find strong support for them.

Inequality, Migrations, and Black Swans: The Case of Italy

This dissertation focuses on an empirical analysis on how inequality, internal and international mobility, and exogenous shocks interact with each other. With a focus on Italy, I provide an important contribution to existing literature on migration and inequality, through a comparative analysis at the subnational level. This characteristic of my work provides a unique opportunity to better understand inequality within countries. Using rigorous econometric and spatial techniques, as well as qualitative material, gathered from case studies and reports from international organizations, my dissertation contributes to the literature in social sciences on the causes and effects of inequality and on how it is shaped by state capacity, sudden events like earthquakes, international and internal mobility, and personal networks. Following the obtained results, I posit that it is up to local and national governments to implement effective policies of redistribution of wealth and services to reduce horizontal and vertical inequality. Furthermore, I believe particular attention should be dedicated to the least wealthy areas of the country, like the Center and the South, historically and consistently less developed than the North.

Women’s Employment and Economic Inequality Between Households

This article provides an overview of the emerging literature on how trends in women’s employment have affected levels of inequality between households. It also sets the stage for future research endeavors. The rise in female labor force participation, and in conjunction the rise in women’s earnings, has been one of the biggest changes in economic activity in recent decades and in many countries. These long-term trends in women’s employment and associated changes in families are discussed in the section on Family Revolution(s). As such, it is remarkable how little attention mainstream analyses of high and rising levels of economic inequality have paid to gender and women’s employment. The first section, on Economic Inequality: Horizontal versus Vertical Perspectives, sets out the distinction between two perspectives on economic inequality. The first pertains to economic differences between households across the income distribution, referred to as Vertical Economic Inequality. The second pertains to economic differences between groups, such as between women and men, referred to as Horizontal Economic Inequality. The next section, on Integrating Horizontal and Vertical Inequality, demonstrates that levels of vertical inequality are affected by horizontal inequality, in this case specifically applied to how economic differences between households are directly related to economic differences between women and men. There is by now a literature that clearly shows how the rise in women’s employment and earnings (and thus smaller horizontal differences between women and men) reduces vertical inequality between households. This has been demonstrated in a vast amount of Country-Specific Studies as well as in Country-Comparative Studies, a consensus that also resonates in a number of Research Overviews. The next section argues that although it has been convincingly demonstrated that women’s employment and earnings have had an attenuating effect on inequality between households, less is known about how and why this is the case and under which conditions. As such, it combines literature from various fields (including sociology, demography, and economics) to develop a Research Agenda to further the literature on the relationship between women’s employment and economic inequality between households. This section addresses six different questions: Who? is employed and has certain levels of earnings, and with whom do they form a household (With Whom? Homogamy and With Whom? Household Formation). These sections also cover determinants of women’s paid work, such as unpaid care- or housework. The next section covers What Income Effect? can be expected from, for instance, motherhood and housework, and whether these effects vary across the income distribution. The section on What Context? brings into focus the welfare state and public policies, and a final subsection briefly addresses the question of Which Methods? may be particularly effective to further this research agenda. This article concludes by acknowledging a few Outstanding Questions that are less developed in the literature and therefore less integrated into this article—but may nevertheless point to interesting venues for further research.

Income inequality and conflicts: A Gini decomposition analysis

There has been little research examining how income inequality may or may not contribute to the “grievance” aspect of conflict. For the most part, the measure used is the traditional Gini index, which is suitable to reflect vertical inequality (VI) rather than horizontal inequality (HI). Calculating HI requires the ability to decompose inequality indices, especially the Gini index, into a within-subgroup component and a between-subgroup component. There exists a long-standing stream of literature discussing how to decompose the Gini index. This article discusses the shortcomings of existing Gini decomposition methods and proposes a novel method that divides the Gini index into within-subgroup and across-subgroup components. This novel method is then applied to the case of Thailand in the years 2009–2017. The differences in the two components derived from the method of this article and those of existing methods are large. In addition, the HI measure this article introduces is also large relative to non-Gini measures such as the Theil and Shorrocks indices. Therefore conflict-related papers that include an existing Gini decomposition and HI measure among their independent variables may wish to test their models with those of this article and other measures—to examine if the results are consistent and to mitigate a risk of misleading policymakers.

Food Insecurity and Conflict Events in Africa

The aim of this paper is to examine the relationship between food insecurity and conflict events short of war in Africa, taking account of a host of mediating factors, including the degree of inequality, the level of development, democratic quality, quality of governance and the degree of government expenditure, which we incorporate into our analysis. Our results suggest that food price volatility does contribute significantly to conflict events measured by political events in Africa (ACLED). Greater democracy can engender more conflict, but in a non-linear fashion. The broader V-DEM participatory index of democracy also encourages more protest. Our governance variables are significant, emphasising the salience of state capacity in this regard. An innovation of our study is the inclusion of inequality. We deploy two metrics of vertical inequality: the GINI coefficient and the broader V-DEM egalitarian index. The GINI index of income inequality has a counter-intuitive statistically insignificant sign, suggesting that greater income equality or middle-class share of income results in greater political unrest. We also utilise political measures of inter-group horizontal inequality which significantly engender conflict risk.

Rural Infrastructure in Odisha: An Inter-District Analysis

The present study attempts to analyse inter-regional disparity in rural infrastructure in the state of Odisha. Three separate indices have been developed for different categories of rural infrastructure-physical, social and financial - with help of the Principal Component Analysis before unifying them to a single index known as the Rural Infrastructure Index (RII). The study observes that there exists vertical inequality in the spread of different categories of infrastructure in the state. Disparity is the severest in the case of financial infrastructure. The study attributes underdevelopment of Kalahandi-Bolangir-Koraput (KBK) belt and some of districts of western-central Odisha to the underdevelopment of rural infrastructure. The analysis lauds the formation of special plans such as the KBK plan and formation of Western Odisha Council by the government. It calls for a time-bound delivery system and region-specific measures in place.

Vertical Inequality, Land Reform, and Insurgency in Colombia

How can we understand the origins and resilience of Colombia’s long-running insurgency? A leading theory emphasizes the feasibility of insurgency, identifying drug trafficking as the main culprit. I propose an alternative theory of civil violence that emphasizes how bargaining over property rights in the face of deep vertical inequality deepens the subordinate group’s social identity, heightens its sense of grievance, and facilitates collective violence. An examination of the history of land reform struggles in Colombia echoes this pattern. Struggles over land reforms in the 1920s and 1930s created new patterns of collective action that helped sustain campesino groups in the “independent republics” of the 1950s and 1960s and the creation of the FARC in 1964. This analysis suggests that the Colombian state’s lack of credibility on issues of land reform demands a significant third-party enforcement of any peace agreement and confidence-building measures between the FARC and the Colombian government.