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Income Inequality and Economic Development

Matthew McKeever


Comment on this article   There is a long-standing debate in cross-national comparative studies on the nature of the relationship between economic development and income inequality. In this essay, the major themes of the extensive academic literature – spanning many disciplines in the social sciences over the past five decades – which has examined this relationship are reviewed. This research not only has a central theoretical question, that concerning the mechanisms through which these two macro-level processes are intertwined and whether these mechanisms are constant across different levels of development, but also raises substantial measurement issues concerning indicators of both economic development and income inequality across a very diverse set of countries. Furthermore, the link between inequality and development is a central concern not only for academic studies, but also plays an important role in the development of international public policy. Specifically, policies meant to alleviate overall income inequality in developing countries are greatly informed by theories of how the relationship between economic growth and income inequality shapes what is possible for countries at different levels of development ( Moran 2005 ). More generally, poverty reduction programs, including the United Nation's Millennium Development Goals, are also formulated in reaction to these theories. ... log in or subscribe to read full text

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