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Liberalization, Globalization and Income Distribution

This paper challenges this view. It argues that while income inequality declined in several nations between the 1950s and 1970s, this trend has been reversed during the last twenty years in two-thirds of the countries with adequate data. This conclusion is based on an econometric analysis of inequality trends for 77 countries accounting for 82 per cent of world population and 95 per cent of world GDP-PPP. Weighing the results by these two variables further strengthens these conclusions, which are supported also by a host of country and regional studies. his paper also suggests (without testing formally) that the traditional causes of income inequality (land concentration, unequal access to education, urban-rural gap, and so on) are unlikely to explain its rise over the last two decades. Such an increase is more likely to be related to shifts towards skill-intensive technologies and, even more so, to the adoption of the unfettered liberalization of domestic and international markets.

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Paper provided by World Institute for Development Economics Research in its series Research Paper with number 157.

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Length: 22 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:wodeec:157
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