Book
Inequality, Growth and Poverty in an Era of Liberalization and Globalization

Within-country income inequality has risen since the early 1980s in most of the OECD, all transitional, and many developing countries. More recently, inequality has risen also in India and nations affected by the Asian crisis. Altogether, over the last twenty years, inequality worsened in 70 per cent of the 73 countries analysed in this volume, with the Gini index rising by over five points in half of them. In several cases, the Gini index follows a U-shaped pattern, with the turn-around point located between the late 1970s and early 1990s. Where the shift towards liberalization and globalization was concluded, the right arm of the U stabilized at the 'steady state level of inequality' typical of the new policy regime, as observed in the UK after 1990. Mainstream theory focusing on rises in wage differentials by skill caused by either North-South trade, migration, or technological change poorly explains the recent rise in income inequality. Likewise, while the traditional causes of income polarization-high land concentration, unequal access to education, the urban bias, the 'curse of natural resources'-still account for much of cross-country variation in income inequality, they cannot explain its recent rise. This volume suggests that the recent rise in income inequality was caused to a considerable extent by a policy-driven worsening in factorial income distribution, wage spread and spatial inequality. In this regard, the volume discusses the distributive impact of reforms in trade and financial liberalization, taxation, public expenditure, safety nets, and labour markets. The volume thus represents one of the first attempts to analyse systematically the relation between policy changes inspired by liberalization and globalization and income inequality. It suggests that capital account liberalization appears to have had-on average-the strongest disequalizing effect, followed by domestic financial liberalization, labour market deregulation, and tax reform. Trade liberalization had unclear effects, while public expenditure reform often had positive effects.

Table of contents
  1. Part I: Income Distribution Trends, Theories and Policies
    1. Inequality, Growth and Poverty: An Overview of Changes over the Last Two Decades
    Giovanni Andrea Cornia
  2. Part I: Income Distribution Trends, Theories and Policies
    2. Income Distribution Changes and Their Impact in the Post-World War II Period
    Giovanni Andrea Cornia, Tony Addison and Sampsa Kiiski
    More Working Paper | Income Distribution Changes and their Impact in the Post-World War II Period
  3. Part II: Traditional Causes of Inequality: Still Relevant for Explaining its Rise in the 1980s-90s?
    3. Land Ownership Inequality and the Income Distribution Consequences of Economic Growth
    Michael R. Carter
    More Working Paper | Land Ownership Inequality and the Income Distribution Consequences of Economic Growth
  4. Part II: Traditional Causes of Inequality: Still Relevant for Explaining its Rise in the 1980s-90s?
    4. Does Educational Achievement Help Explain Income Inequality?
    Daniele Checchi
    More Working Paper | Does Educational Achievement Help to Explain Income Inequality?
  5. Part II: Traditional Causes of Inequality: Still Relevant for Explaining its Rise in the 1980s-90s?
    5. Rural and Urban Income Inequality and Poverty: Does Convergence Between Sectors Offset Divergence within Them?
    Michael Lipton and Robert Eastwood
    More Working Paper | Rural-Urban Dimensions of Inequality Change
  6. Part III: Recent Factors Influencing the Distribution of Income
    6. Globalization, Technology and Income Inequality: A Critical Analysis
    Ajit Singh and Rahul Dhumale
    More Working Paper | Globalization, Technology, and Income Inequality
  7. Part III: Recent Factors Influencing the Distribution of Income
    7. External Liberalization, Economic Performance and Distribution in Latin America and Elsewhere
    Lance Taylor
    More Working Paper | External Liberalization, Economic Performance, and Distribution in Latin America and Elsewhere
  8. Part III: Recent Factors Influencing the Distribution of Income
    8. Labour Market Institutions and Income Inequality: What are the New Insights after the Washington Consensus?
    Rolph van der Hoeven and Catherine Saget
    More Working Paper | Labour Markets and Income Inequality
  9. Part III: Recent Factors Influencing the Distribution of Income
    9. Increased Income Inequality in OECD Countries and the Redistributive Impact of the Government Budget
    Anthony Barnes Atkinson
    More Working Paper | Increased Income Inequality in OECD Countries and the Redistributive Impact of the Government Budget
  10. Part III: Recent Factors Influencing the Distribution of Income
    10. Income Distribution and Tax and Government Social Spending Policies in Developing Countries
    Ke-Young Chu, Hamid Davoodi and Sanjeev Gupta
    More Working Paper | Income Distribution and Tax, and Government Social Spending Policies in Developing Countries
  11. Part III: Recent Factors Influencing the Distribution of Income
    11. The Impact of Adjustment-Related Social Funds on Income Distribution and Poverty
    Giovanni Andrea Cornia and Sanjay Reddy
    More Working Paper | The Impact of Adjustment-Related Social Funds on Income Distribution and Poverty
  12. Part IV: Country Case Studies
    12. Reducing Poverty and Inequality in India: Has Liberalization Helped?
    Raghbendra Jha
    More Working Paper | Reducing Poverty and Inequality in India
  13. Part IV: Country Case Studies
    13. Factor Shares and Resource Booms: Accounting for the Evolution of Venezuelan Inequality
    Francisco Rodríguez
    More Working Paper | Factor Shares and Resource Booms
  14. Part IV: Country Case Studies
    14. The Impact of Financial Liberalization and the Rise of Financial Rents on Income Inequality: The Case of Turkey
    A. Erinc Yeldan
    More Working Paper | The Impact of Financial Liberalization and the Rise of Financial Rents on Income Inequality
  15. Part IV: Country Case Studies
    15. The Changing Nature of Inequality in South Africa
    Carolyn Jenkins and Lynne Thomas
    More Working Paper | The Changing Nature of Inequality in South Africa
  16. Part IV: Country Case Studies
    16. Growth, Structural Change and Inequality: The Experience of Thailand
    Isra Sarntisart
    More Working Paper | Growth, Structural Change and Inequality
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Endorsements

'..essential reading for anyone concerned with poverty reduction and the impact of current policy reforms.' - Frances Stewart, Director, Queen Elizabeth House, University of Oxford

'...a valuable contribution to the important but still very limited body of serious analysis on the enormously important question of how liberalization and globalization affect people though their growth, distribution and poverty impacts. The volume addresses most of the key issues and, through the material it adds to the ongoing debates, will help to shift the balance of considered opinion away from the overoptimistic predictions of some of the cheer-leaders for liberalization and globalization to a more plausible middle ground. Such a shift is essential if these phenomena are to be appropriately controlled and harnessed for human betterment.' - Albert Berry, Professor, Department of Economics, University of Toronto

'This book is a well-researched, energetic and analytically adept multi-authored volume...' - Development and Change

'Together they make a valuable collection of papers on linkages between inequality and/or trade with growth and/or poverty researchers will find much of value in the volumes, and research students will find the reviews, methods and case studies informative and useful.' - Journal of International Development