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Development policies and income inequality in selected developing regions, 1980-2010

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  • Giovanni Andrea Cornia

    () (Università degli Studi di Firenze)

  • Bruno Martorano

Abstract

The paper discusses the income inequality changes which have taken place in a few representative developing regions during the last 30 years. While inequality rose in the majority of the countries of these regions in the 1980s and 1990s, the last decade was characterized by a bifurcation of inequality trends. This divergence offers the possibility to contrast the experience of virtuous regions (Latin America and parts of East and South-East Asia) and non-virtuous regions (the European economies in transition and China) so as to draw useful lessons. Since the global economic conditions affecting inequality in these countries were not too dissimilar and since no major variations in endogenous factors were evident across the regions analysed, the difference in inequality trends between virtuous and non-virtuous regions was most likely due to institutional factors and public policies. An econometric test confirms that the reduction of inequality is possible even under open economy conditions if a given set of appropriate macroeconomic, labour, fiscal and social policies is adopted by governments.

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  • Giovanni Andrea Cornia & Bruno Martorano, 2013. "Development policies and income inequality in selected developing regions, 1980-2010," Working Papers - Economics wp2013_13.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  • Handle: RePEc:frz:wpaper:wp2013_13.rdf
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    Cited by:

    1. Carlos M. Correa, 2015. "Intellectual property: How much room is left for industrial policy?," UNCTAD Discussion Papers 223, United Nations Conference on Trade and Development.
    2. Jörg Mayer, 2013. "Towards More Balanced Growth Strategies In Developing Countries: Issues Related To Market Size, Trade Balances And Purchasing Power," UNCTAD Discussion Papers 214, United Nations Conference on Trade and Development.
    3. Bruno Martorano, 2013. "The Australian Household Stimulus Package: Lessons from the recent economic crisis," Papers inwopa697, Innocenti Working Papers.
    4. Kalle Hirvonen & Giulia Mascagni & Keetie Roelen, 2016. "Linking taxation and social protection Evidence on redistribution and poverty reduction in Ethiopia," WIDER Working Paper Series 111, World Institute for Development Economic Research (UNU-WIDER).
    5. Andrew Cornford, 2014. "Macroprudential Regulation: Potential Implications For Rules For Cross-Border Banking," UNCTAD Discussion Papers 216, United Nations Conference on Trade and Development.
    6. Bruno Martorano, 2018. "Taxation and Inequality in Developing Countries: Lessons from the Recent Experience of Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(2), pages 256-273, March.
    7. Alfredo Saad-Filho, 2015. "Social Policy for Neoliberalism: The Bolsa Família Programme in Brazil," Development and Change, International Institute of Social Studies, vol. 46(6), pages 1227-1252, November.
    8. Fernando Rugitsky, 2017. "The rise and fall of the Brazilian economy (2004-2015): the economic antimiracle," Working Papers, Department of Economics 2017_29, University of São Paulo (FEA-USP).
    9. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute of Labor Economics (IZA).
    10. Stephany Griffith-Jones, 2014. "A Brics Development Bank: A Dream Coming True?," UNCTAD Discussion Papers 215, United Nations Conference on Trade and Development.
    11. Ulrich Hoffmann, 2015. "Can green growth really work and what are the true (socio-)economics of Climate Change?," UNCTAD Discussion Papers 222, United Nations Conference on Trade and Development.
    12. Cornia, Giovanni Andrea, 2014. "Income inequality in Latin America. Recent decline and prospects for its further reduction," Macroeconomía del Desarrollo 149, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. André Nassif & Carmem Feijó & Eliane Araújo, 2015. "Structural change and economic development: is Brazil catching up or falling behind?," Cambridge Journal of Economics, Oxford University Press, vol. 39(5), pages 1307-1332.
    14. Bruno Martorano, 2015. "Lessons from the recent economic crisis: the Australian household stimulus package," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 309-327, May.
    15. Bruno Martorano, & Giovanni Andrea Cornia & Frances Stewart, 2012. "Human Development and Fiscal Policy: Comparing the Crises of 1982-85 and 2008-11," Working Papers - Economics wp2012_23.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    16. Birdsall, Nancy & Lustig, Nora & Meyer, Christian J., 2014. "The Strugglers: The New Poor in Latin America?," World Development, Elsevier, vol. 60(C), pages 132-146.
    17. Sung-Jin Kang & Robert Rudolf, 2016. "Rising Or Falling Inequality In Korea? Population Aging And Generational Trends," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-26, December.
    18. Giovanni Andrea Cornia, 2018. "Eradicating Poverty by 2030: Implications for Income Inequality, Population Policies, Food Prices (and Faster Growth?)," Working Papers - Economics wp2018_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    19. Aguiar de Medeiros, Carlos & Trebat, Nicholas, 2016. "Latin America at a Crossroads: Controversies on Growth, Income Distribution and Structural Change," Centro Sraffa Working Papers CSWP22, Centro di Ricerche e Documentazione "Piero Sraffa".
    20. Shigehisa Kasahara, 2013. "The Asian Developmental State And The Flying Geese Paradigm," UNCTAD Discussion Papers 213, United Nations Conference on Trade and Development.
    21. Hassine, Nadia Belhaj, 2014. "Economic inequality in the Arab region," Policy Research Working Paper Series 6911, The World Bank.
    22. Filimonov, Vladimir & Bicchetti, David & Maystre, Nicolas & Sornette, Didier, 2014. "Quantification of the high level of endogeneity and of structural regime shifts in commodity markets," Journal of International Money and Finance, Elsevier, vol. 42(C), pages 174-192.
    23. Giovanni Andrea Cornia, 2012. "The New Structuralist Macroeconomics and Income Inequality," Working Papers - Economics wp2012_25.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    More about this item

    Keywords

    trends in income inequality; factor income distribution; democracy; policy reforms; international economic integration; international crisis; China; South East Asia; Latin America; transition economies of Europe.;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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