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Globalization, Growth, and Distribution

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  • Ravi Kanbur

Abstract

In the last two decades, across a range of countries high growth rates have reduced poverty but have been accompanied by rising inequality. This paper is motivated by this stylized fact, and by the strong distributional concerns that persist among populations and policy makers alike, despite the poverty reduction observed in official statistics where growth has been sufficiently high. This seeming disconnects frames the questions posed in this paper. Why the disconnect, and what to do about it? It is argued that official poverty statistics may be missing key elements of the ground level reality of distributional evolution, of which rising inequality may be an indirect indicator. Heterogeneity of population means that there may be significant numbers of poor losers from technical change, economic reform and global integration, even when overall measured poverty falls. In terms of actions, attention is drawn to the role of safety nets as generalized compensation mechanisms, to address the ethical and political economy dimensions of such a pattern of distributional evolution. Addressing structural inequalities is also a long term answer with payoffs in terms of equitable growth. In terms of future analysis, diminishing returns have set in to the inequality-growth cross-country regressions literature. Further work to help policy makers should focus on: (i) new information to illuminate the disconnect; (ii) analysis and assessment of safety nets as generalized compensation mechanisms; and (iii) addressing specific forms of structural inequality related to assets, gender, and social groupings like caste or ethnicity.

Suggested Citation

  • Ravi Kanbur, 2008. "Globalization, Growth, and Distribution," World Bank Publications - Books, The World Bank Group, number 28017.
  • Handle: RePEc:wbk:wbpubs:28017
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    References listed on IDEAS

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    Cited by:

    1. Vinod Thomas, 2009. "Income Disparity and Growth," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 1(1), pages 63-86, January.
    2. Anthony B. Atkinson & Andrea Brandolini, 2010. "On Analyzing the World Distribution of Income," World Bank Economic Review, World Bank Group, vol. 24(1), pages 1-37, January.
    3. Deepa Narayan & Lant Pritchett & Soumya Kapoor, 2009. "Moving Out of Poverty : Volume 2. Success from the Bottom Up," World Bank Publications - Books, The World Bank Group, number 11838.
    4. Nicola Banks & Manoj Roy & David Hulme, 2011. "Neglecting the urban poor in Bangladesh: research, policy and action in the context of climate change," Global Development Institute Working Paper Series 14411, GDI, The University of Manchester.
    5. Charles Meth, 2011. "How not to present poverty research results: The South African case," SALDRU Working Papers 61, Southern Africa Labour and Development Research Unit, University of Cape Town.

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