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International Redistribution of Income

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  • Bourguignon, François
  • Levin, Victoria
  • Rosenblatt, David

Abstract

Summary How do international policies on aid, trade, and factor movements affect the international distribution of income? We calculate the impact by world decile of the actual level of aid flows and the effect on income of merchandise trade restrictions by high-income countries. We find that aid's distributional impact is equality enhancing, extremely small in terms of changes in inequality measures, but of some importance for the lowest decile of the distribution. We also find that some of this impact is counteracted by lost potential income in the lower deciles from merchandise trade barriers imposed by high-income countries.

Suggested Citation

  • Bourguignon, François & Levin, Victoria & Rosenblatt, David, 2009. "International Redistribution of Income," World Development, Elsevier, vol. 37(1), pages 1-10, January.
  • Handle: RePEc:eee:wdevel:v:37:y:2009:i:1:p:1-10
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    References listed on IDEAS

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    1. Francois Bourguignon & Victoria Levin & David Rosenblatt, 2004. "Declining International Inequality and Economic Divergence: Reviewing the Evidence Through Different Lenses," Economie Internationale, CEPII research center, issue 100, pages 13-26.
    2. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
    3. Jeffrey B. Nugent & Makoto Yano, 1999. "Aid, Nontraded Goods, and the Transfer Paradox in Small Countries," American Economic Review, American Economic Association, vol. 89(3), pages 431-449, June.
    4. Bhagwati, Jagdish N & Brecher, Richard A & Hatta, Tatsuo, 1983. "The Generalized Theory of Transfers and Welfare: Bilateral Transfers in a Multilateral World," American Economic Review, American Economic Association, vol. 73(4), pages 606-618, September.
    5. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
    6. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    7. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    8. Kopczuk, Wojciech & Slemrod, Joel & Yitzhaki, Shlomo, 2005. "The limitations of decentralized world redistribution: An optimal taxation approach," European Economic Review, Elsevier, vol. 49(4), pages 1051-1079, May.
    9. Xavier Sala-i-Martin, 2002. "The world distribution of income (estimated from individual country distributions)," Economics Working Papers 615, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2002.
    10. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, EconWPA.
    11. Bourguignon, Francois & Levin, Victoria & Rosenblatt, David, 2006. "Global redistribution of income," Policy Research Working Paper Series 3961, The World Bank.
    12. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    13. Yano, Makoto, 1983. "Welfare aspects of the transfer problem," Journal of International Economics, Elsevier, vol. 15(3-4), pages 277-289, November.
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    Cited by:

    1. Martin Ravallion, 2014. "On the Role of Aid in The Great Escape," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 967-984, December.
    2. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, Elsevier.
    3. Anastasia Blouchoutzi & Christos Nikas, 2010. "The macroeconomic implications of emigrants' remittances in Romania, Bulgaria and Albania," Post-Communist Economies, Taylor & Francis Journals, vol. 22(4), pages 547-558.
    4. repec:aes:amfeco:v:46:y:2017:i:19:p:696 is not listed on IDEAS
    5. Herzer, Dierk & Nunnenkamp, Peter, 2012. "The effect of foreign aid on income inequality: Evidence from panel cointegration," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 245-255.

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