Policy Reform and Income Distribution

The paper analyses the relationship between within-country income inequality and policies of domestic liberalization and external globalization. The models used to provide the rationale for such reforms—such as the Hecksher-Ohlin model—usually predict a decline in inequality. However, the evidence shows that inequality often rose with the introduction of such reforms. The paper tries to explain this discrepancy by identifying the conditions under which the models’ conclusions do not hold. Indeed, such models are based on a simplified view of reality and restrictive assumptions, and their predictions do not necessarily hold in conditions of institutional weakness, structural rigidities, inefficient markets, asymmetric information and persistent protectionism.trends in income inequality, factor income distribution, policy reform, structural adjustment, globalization

Transition, Structural Divergence,and Performance: Eastern Europe and the former Soviet Union over 2000-2007

During the socialist era the communist regime attempted to reduce development differentials among states and social classes. In contrast, during the last 20 years, the economies in transition experienced considerable divergence in the economic, social, demographic and political areas. As a result, these countries can now be grouped into four structurally different clusters alternatively dependent on manufactured exports, high- and low-tech services, commodities exports, and migrant remittances. Between 2000 and 2007, the cluster with the fastest growth was not that which most reformed its economy and institutions, but that of commodity exporters where, however, life expectancy improved far less than in other clusters.structural transformation, divergence, performance, country clusters

The Impact of Liberalisation and Globalisation on Income Inequality in Developing and Transitional Economies

This paper reviews changes in global, between-country and within-country inequality over 1980-2000 against the background of the shifts that occurred in this area during the globalisation of 1870-1914. The paper finds that recent changes in global and between-country inequality are not marked and depend in part on the conventions adopted for their measurement. In contrast, within-country inequality appears to have risen clearly in two thirds of the 73 countries analyzed mainly because of the policy drive towards domestic deregulation and external liberalisation. The paper concludes by analysing the differences between the inequality changes observed during 1980-2000 and 1870-1914.globalisation, globalization

Income Distribution under Latin America’s New Left Regimes

This paper reviews the decline in income inequality that has taken place over 2002-2007 in most Latin American countries against the background of its steady increase over 1980-2002. The paper analyzes then the factors that could explain this trend reversal. It focuses in particular on favorable external conditions, cyclical factors, improvements in the distribution of educational achievements and the subsequent drop in skill-premium, and changes in macroeconomic and social policies introduced in several countries, particularly by a growing number of left-of-centre governments which have come to power during the last decade. An econometric test for the years 1990-2007 indicate that, in addition to a favorable business cycle and external conditions, a decline in skill premium and the new policy model of fiscally prudent social-democracy which is emerging this decade in much of Latin America impacted favorably the distribution of income. If this approach will survive the current crisis, much of the recent inequality decline is likely to become permanent.income inequality, human capital inequality, external conditions, policy regimes, Latin America.

Inequality Trends and their Determinants: Latin America over 1990-2010

The paper reviews the steady and widespread decline in income inequality which has taken place in most of Latin America over 2002-10 and which––if continued for another 2-3 years––would reduce the average regional income inequality to pre-liberalization levels. The paper then focuses on the factors, which may explain such inequality decline. A review of the literature and an econometric test indicate that a few complementary factors played an important role in this regard, including a drop in the skill premium following a rapid expansion of secondary education, and the adoption of a new development model by a growing number of left-of-centre governments which emphasizes fiscally-prudent but more equitable macroeconomic, tax, social expenditure and labour policies. For the region as a whole, improvements in terms of trade, migrant remittances, FDI and world growth played a less important role than expected although their impact was perceptible in countries where such transactions were sizeable.income inequality, human capital inequality, policy regimes, external conditions, Latin America

Health Improvements and Health Inequality during the Last 40 Years

health status, health inequality, income inequality, welfare disparities

Trends in Income Distribution in the Post-World War II Period Evidence and Interpretation

policy reform, Washington Consensus, inequality, inequality trends, liberalization

Income Distribution Policies For Faster Poverty Reduction

income inequality, poverty reduction, economic growth, social conflict

Convergence on Governance Issues, Dissent on Economic Policies

Summary WDR97 is an attempt to reconcile the ‘Washington consensus’ with the ‘East Asian model’. It underscores the complementarity existing between state and market, the need to reinvigorate the state's institutions, and the damage caused by the recent over?withdrawal of the state in many developing and transitional economies. It presents reasonable suggestions in the field of social policy, decentralisation, regulation and participation. Yet, the definition of the long?term role of the state is reductionist. And the stance on key economic policies remains dogmatic: privatisation is presented as always efficiency enhancing, trade liberalisation as a universal source of growth, and portfolio flows as an essential contribution to higher savings. In addition, little is said about the impact and governance implications of globalisation. This persistent dogmatism is dangerous: even with major improvements in governance, economic performance may remain disappointing if the basic policy stand remains unaltered. It is difficult to assess the influence that WDR97 will have on the World Bank's policies and operations. Obviously ‘the proof of the pudding is in the eating’

Aid Effort and Its Determinants: A Comparison of the Italian Performance with other OECD Donors

this paper aims at contributing to a better understanding of the determinants of aid effort by donor countries, a topic that has been rather under researched in the vast economic literature on development aid. We conduct an econometric analysis on panel data that refer to the 22 member countries of the OECD Development Assistance Committee over the 1970 2004 period; the estimates are then used as a benchmark against which we assess to what extent the poor Italian aid performance can be traced back to its specific macroeconomic, structural and institutional characteristics. The analysis suggests that these factors – that are found to significantly influence aid effort – fall short of explaining the limited amount of fiscal resources that Italy devotes to international aid. Even when its specific characteristics are accounted for, Italy is found to be lagging behind the OECD norm, so that the analysis challenges the claims that the limited Italian aid effort is due to binding fiscal constraints.foreign aid, fiscal expenditures, economic development