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Čtyři mechanizmy příjmové diferenciace (available in Czech only)

Author

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  • Luděk Rychetník

    () (Centre for Euro-Asian Studies, University of Reading)

Abstract

This paper describes four mechanisms of income differentiation which generate inequalities both at national and international levels. They are: (i) Increasing returns to scale, (ii) cost of capital (interest) hidden in prices, (iii) economic rent derived from scarce natural resources, and (iv) exploitative state and private structures. Only the third and fourth mechanisms have been analyzed as they generate inequities, ie. inequalities which can be considered as unfair. It is argued that the effect of the third mechanism can be moderated by taxation paid from the rent. The fourth mechanism disrupts governance and economic activities in many developing countries and adversely affects the post communist states as well. International institutions as the World Bank pay increasing attention to it through their Governance and Anti-Corruption programmes. However a substantial improvement can be achieved by consistent effort of domestic forces in each country.

Suggested Citation

  • Luděk Rychetník, 2007. "Čtyři mechanizmy příjmové diferenciace (available in Czech only)," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 1(2), pages 155-179, July.
  • Handle: RePEc:fau:aucocz:au2007_155
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    More about this item

    Keywords

    system legitimacy; inequality; economic rent; governance and anti-corruption;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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