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The developer's dilemma: A survey of structural transformation and inequality dynamics

Author

Listed:
  • Armida Alisjahbana
  • Kyunghoon Kim
  • Kunal Sen
  • Andy Sumner
  • Arief Anshory Yusuf

Abstract

This paper discusses the 'developer's dilemma'—a tension emerging from the fact that developing countries are simultaneously seeking structural transformation and broad-based growth to raise incomes of the poor. Simon Kuznets originally hypothesized that structural transformation may have a tendency—in the absence of policy intervention—to put upward pressure on income inequality. However, broad-based economic growth requires steady or even falling income inequality to maximize the growth of incomes at the lower end of the distribution.

Suggested Citation

  • Armida Alisjahbana & Kyunghoon Kim & Kunal Sen & Andy Sumner & Arief Anshory Yusuf, 2020. "The developer's dilemma: A survey of structural transformation and inequality dynamics," WIDER Working Paper Series wp-2020-35, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-35
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    References listed on IDEAS

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    1. Peter H. Lindert & Jeffrey G. Williamson, 2003. "Does Globalization Make the World More Unequal?," NBER Chapters, in: Globalization in Historical Perspective, pages 227-276, National Bureau of Economic Research, Inc.
    2. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-440, June.
    3. Oyvat, Cem, 2016. "Agrarian Structures, Urbanization, and Inequality," World Development, Elsevier, vol. 83(C), pages 207-230.
    4. Cinar Baymul & Kunal Sen, 2020. "Was Kuznets Right? New Evidence on the Relationship between Structural Transformation and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1643-1662, July.
    5. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
    6. Edward K. Y. Chen, 1979. "Economic Growth and Income Distribution," Palgrave Macmillan Books, in: Hyper-growth in Asian Economies, chapter 8, pages 152-176, Palgrave Macmillan.
    7. Ravi Kanbur, 2017. "Working Paper 266 - Structural Transformation and Income Distribution: Kuznets and Beyond," Working Paper Series 2377, African Development Bank.
    8. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
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    Cited by:

    1. Peter Warr & Waleerat Suphannachart, 2020. "Benign growth: Structural transformation and inclusive growth in Thailand," WIDER Working Paper Series wp-2020-46, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Income inequality; Structural transformation; Economic development; Kuznets;
    All these keywords.

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