The impact of inequality on growth, human development, and governance

A significant empirical literature in economics and political science explores the impact of inequality on major economic and political outcomes; in particular, economic growth, human development and governance.

While the literature offers rich insights and employs diverse data and methods in considering socio-economic inequality, it is notable that existing studies rely almost exclusively on relative measures of inequality, rather than absolute measures. There is strong suggestive evidence that absolute inequality matters more for many people at all levels of society; one prominent illustration being the core concern in the UN Sustainable Development Goals (SDGs) of leaving no one behind in absolute poverty.

The @EQUAL project will focus on four major areas of research:

  • Reimagining research on inequality (absolute vs relative measures)
  • The impacts of inequality on growth, human development, and governance
  • Learning from inequality in Mozambique
  • Learning from inequality in Vietnam

It combines cross-national and within-country analysis, exploits both existing datasets and collects new data - through surveys and lab-in-the-field experiments in two country case studies – to reinvent the existing literature on economic inequality by shifting the focus, momentarily, from relative measures of inequality to absolute measures, performs cross-national and intertemporal analysis of the impact that inequality has on economic growth, human development, and governance, and takes a deep dive into two case studies of how inequality impacts these factors, and is impacted by them —in Mozambique and Vietnam.

Key questions
  • What are the impacts of inequality on economic growth? On levels of human development, health, and education? And, on governance, state capability, democracy, and institutions?
  • What are the implications of reconceptualising and measuring inequality in absolute versus relative terms—with respect to both theoretical predictions and major empirical findings in the literature?
  • How do individuals understand, perceive, and act upon inequality? Do ‘absolute’ or ‘relative’ measures better capture contemporary inequalities? How do such understandings vary across contexts or circumstances? How might they vary across ‘dimensions’ of inequality (socio-economic or political)?
  • How do experiences of inequality differ between and across countries? How do the experiences of Vietnam and Mozambique compare? How can focused consideration of experiences in particular countries inform cross-country analyses?
Watch this space

All papers, data, and opinion pieces relating to this project, as well as opportunities to engage, will be available on this webpage and at the Development Economics Research Group.  

UN’s 2030 Agenda for Sustainable Development

This project centrally addresses SDG 10. Components of it speak directly to SDG 16 (effective, accountable, and inclusive institutions). The project will contribute to the global effort by reconsidering core findings and associated policy recommendations in the fields of economics and political science in light of the absolute measures of inequality we explore.


Main subject

Theme: 2019-23, Transforming societies