Policy Reform and Income Distribution
AbstractThe paper analyses the relationship between within-country income inequality and policies of domestic liberalization and external globalization. The models used to provide the rationale for such reforms—such as the Hecksher-Ohlin model—usually predict a decline in inequality. However, the evidence shows that inequality often rose with the introduction of such reforms. The paper tries to explain this discrepancy by identifying the conditions under which the models’ conclusions do not hold. Indeed, such models are based on a simplified view of reality and restrictive assumptions, and their predictions do not necessarily hold in conditions of institutional weakness, structural rigidities, inefficient markets, asymmetric information and persistent protectionism.
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Bibliographic InfoPaper provided by United Nations, Department of Economics and Social Affairs in its series Working Papers with number 3.
Length: 19 pages
Date of creation: Oct 2005
Date of revision:
trends in income inequality; factor income distribution; policy reform; structural adjustment; globalization;
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-16 (All new papers)
- NEP-MAC-2006-12-16 (Macroeconomics)
- NEP-PKE-2006-12-16 (Post Keynesian Economics)
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- Isabel Ortiz & Matthew Cummins, 2011.
"Global Inequality: Beyond the Bottom Billion – A Rapid Review of Income Distribution in 141 Countries,"
1105, UNICEF,Division of Policy and Strategy.
- Isabel Ortiz & Matthew Cummins, 2011. "Global Inequality: Beyond the Bottom Billion – A Rapid Review of Income Distribution in 141 Countries," Working papers 1102, UNICEF,Division of Policy and Strategy.
- Giovanni Andrea Cornia & Juan Carlos Gómez-Sabaini & Bruno Martorano, 2012.
"A New Fiscal Pact, Tax Policy Changes and Income Inequality,"
Working Papers Series
wp2012_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.
- Cornia, Giovanni Andrea & Martorano, Bruno, 2011. "A New Fiscal Pact, Tax Policy Changes and Income Inequality," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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