We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

https://www.econstor.eu/bitstream/10419/81822/1/02-28.pdf

Economic growth and income inequality

Why nations fail? The origins of Power, Prosperity and Poverty

Governance and Development

Organic consumerism: A comparison between India and the USA

Empowering the powerless: Does access to energy improve income inequality?

This paper analyses the role of good governance in fostering pro-poor and inclusive growth. Using a sample of 112 countries over 1975–2012, it shows that growth is generally pro-poor. However, growth has not been inclusive, as illustrated by a decline in the bottom 20 percent of the income distribution. While all features of good governance support income growth and reduce poverty, only government effectiveness and the rule of law are found to enhance inclusive growth. The investigation of the determinants of pro-poor and inclusive growth highlights that education, infrastructure improvement, and financial development are the key factors in poverty reduction and inclusive growth. Relying on the panel smooth transition regression (PSTR) model following Gonzalez, Tersvirta and Dijk (2005), the paper identifies a nonlinear relationship between governance and pro-poor growth, while the impact of governance on inclusive growth appears to be linear.

/pdf/the-quest-for-pro-poor-and-inclusive-growth-the-role-of-36fy7c5y8j.pdf

The Quest for Pro-Poor and Inclusive Growth : The Role of Governance

Can a government reduce income inequality by changing the composition of public spending while keeping the total level of expenditure fixed? Using newly assembled data on spending composition for 83 countries across all income groups, this paper shows that reallocating spending toward social protection and infrastructure is associated with reduced income inequality, particularly when it is financed through cuts in defense spending. However, the political and security situation matters. The analysis does not find evidence that lowering defense spending to finance infrastructure and social outlays improves income distribution in countries with weak institutions and at higher risk of conflict. Reallocating social protection and infrastructure spending towards other types of spending tends to increase income inequality. Accounting for the long-term impact of health spending, and particularly education spending, helps to better capture the equalizing effects of these expenditures. The paper includes a discussion of the implications of the findings for Indonesia, a major emerging market where income inequality is at the center of policy issues.

/pdf/reallocating-public-spending-to-reduce-income-inequality-can-1x5wzemsr8.pdf

Reallocating Public Spending to Reduce Income Inequality: Can It Work?

This paper analyzes the role of good governance in fostering pro-poor and inclusive growth. Using a sample of 112 countries over the period 1975-2012, the main results show that growth is in general pro-poor. However, growth has not been inclusive – as illustrated by a decline in the bottom quintile share of the income distribution. While all features of good governance support income growth and reduce poverty, only government effectiveness and the rule of law are found to enhance inclusive growth. Investigating the determinants of pro-poor and inclusive growth highlights that education strategies, infrastructure improvement and financial development are the key factors for poverty reduction and inclusive growth. Relying on the Panel Smooth Transition Regression (PSTR) model following Gonzalez et al. (2005), the paper identifies a nonlinear relationship between governance and pro-poor growth while the impact of governance on inclusive growth appears to be linear.

Djeneba Doumbia

Papers

The Quest for Pro-Poor and Inclusive Growth : The Role of Governance

Reallocating Public Spending to Reduce Income Inequality: Can It Work?

The quest for pro-poor and inclusive growth: The role of governance

Structural Loopholes in Sustainability-Linked Bonds