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Development Policies and Income Inequality in Selected Developing Regions, 1980–2010

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  • Giovanni Andrea Cornia
  • Bruno Martorano
Abstract
The paper discusses the income inequality changes which have taken place in a few representative developing regions during the last 30 years. While inequality rose in the majority of the countries of these regions in the 1980s and 1990s, the last decade was characterized by a bifurcation of inequality trends. This divergence offers the possibility to contrast the experience of virtuous regions (Latin America and parts of East and South-East Asia) and non-virtuous regions (the European economies in transition and China) so as to draw useful lessons. Since the global economic conditions affecting inequality in these countries were not too dissimilar and since no major variations in endogenous factors were evident across the regions analysed, the difference in inequality trends between virtuous and non-virtuous regions was most likely due to institutional factors and public policies. An econometric test confirms that the reduction of inequality is possible even under open economy conditions if a given set of appropriate macroeconomic, labour, fiscal and social policies is adopted by governments.

Suggested Citation

  • Giovanni Andrea Cornia & Bruno Martorano, 2012. "Development Policies and Income Inequality in Selected Developing Regions, 1980–2010," UNCTAD Discussion Papers 210, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:dispap:210
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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