Advanced Search
MyIDEAS: Login to save this article or follow this journal

Income inequality, government expenditures and growth

Contents:

Author Info

  • Hannu Tanninen
Registered author(s):

    Abstract

    This paper investigates the relationship between income inequality and growth by utilizing the recently published Deininger-Squire data set. Most of the recent empirical growth literature suggests a negative relationship between inequality and growth on the basis of reduced-form growth equations. This is also found in the author's study. Some effort is made to discuss the argument behind the perceived negative relationship between inequality and growth. According to the fiscal policy approach a high level of income inequality leads to a higher demand for redistribution, which in turn affects growth through resource allocation out of investment or through incentive-distorting taxes needed to fund the redistribution. It is suggested that the last-mentioned relationship between government expenditure and growth is more likely to be non-linear; positive with small amounts and negative with large amounts. Such a relationship, however, is only found for public goods. Thus, government expenditure on 'law and order' may, with higher amounts of expenditure, have negative effects on growth, therefore indirectly supporting the socio-political stability argument.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.tandfonline.com/doi/abs/10.1080/000368499323599
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 31 (1999)
    Issue (Month): 9 ()
    Pages: 1109-1117

    as in new window
    Handle: RePEc:taf:applec:v:31:y:1999:i:9:p:1109-1117

    Contact details of provider:
    Web page: http://www.tandfonline.com/RAEC20

    Order Information:
    Web: http://www.tandfonline.com/pricing/journal/RAEC20

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. International Monetary Fund, 2003. "Income Inequality and Redistributive Government Spending," IMF Working Papers 03/14, International Monetary Fund.
    2. Odedokun, Matthew & Round, Jeffery I., 2001. "Determinants of Income Inequality and its Effects on Economic Growth: Evidence from African Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    3. Xavier Ramos & Oriol Roca-Sagales, 2007. "Long Term Effects of Fiscal Policy on the Size and the Distribution of the Pie in the UK," RSCAS Working Papers 2007/39, European University Institute.
    4. Luebker, Malte, 2012. "Income inequality, redistribution and poverty contrasting rational choice and behavioural perspectives," ILO Working Papers 471001, International Labour Organization.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:31:y:1999:i:9:p:1109-1117. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.