Language:
English
Pages:
Online-Ressource (1 online resource (34 p.))
Edition:
Online-Ausg. World Bank E-Library Archive
Parallel Title:
Deininger, Klaus Asset Distribution, Inequality, and Growth
Keywords:
Asset Distribution
;
Asset Inequality
;
Consumption
;
Economic Growth
;
Economic Policy
;
Economic Theory and Research
;
Empirical Evidence
;
Equity and Development
;
Exogenous Shocks
;
Factor Endowments
;
Finance and Financial Sector Development
;
Financial Literacy
;
Growth Literature
;
Growth Regressions
;
Human Capital
;
Income
;
Income Inequality
;
Inequality
;
Inequality
;
Inequality-Growth Relationship
;
Investment and Investment Climate
;
Labor Policies
;
Long-Term Growth
;
Macroeconomics and Economic Growth
;
Negative Impact
;
Negative Relationship
;
Policy Level
;
Political Economy
;
Poverty Impact Evaluation
;
Poverty Reduction
;
Pro-Poor Growth
;
Property Rights
;
Rural Development
;
Rural Poverty Reduction
;
Social Protections and Labor
;
Asset Distribution
;
Asset Inequality
;
Consumption
;
Economic Growth
;
Economic Policy
;
Economic Theory and Research
;
Empirical Evidence
;
Equity and Development
;
Exogenous Shocks
;
Factor Endowments
;
Finance and Financial Sector Development
;
Financial Literacy
;
Growth Literature
;
Growth Regressions
;
Human Capital
;
Income
;
Income Inequality
;
Inequality
;
Inequality
;
Inequality-Growth Relationship
;
Investment and Investment Climate
;
Labor Policies
;
Long-Term Growth
;
Macroeconomics and Economic Growth
;
Negative Impact
;
Negative Relationship
;
Policy Level
;
Political Economy
;
Poverty Impact Evaluation
;
Poverty Reduction
;
Pro-Poor Growth
;
Property Rights
;
Rural Development
;
Rural Poverty Reduction
;
Social Protections and Labor
Abstract:
June 2000 - Policymakers addressing the impact of inequality on growth should be more concerned about households' access to assets - and to the opportunities associated with them - than about the distribution of income. Asset inequality - but not income inequality - has a relatively great negative impact on growth and also reduces the effectiveness of educational interventions. With the recent resurgence of interest in equity, inequality, and growth, the possibility of a negative relationship between inequality and economic growth has received renewed interest in the literature. Faced with the prospect that high levels of inequality may persist and give rise to poverty traps, policymakers are paying more attention to the distributional implications of macroeconomic policies. Because high levels of inequality may hurt overall growth, policymakers are exploring measures to promote growth and equity at the same time. How the consequences of inequality are analyzed, along with the possible cures, depends partly on how inequality is measured. Deininger and Olinto use assets (land) rather than income - and a GMM estimator - to examine the robustness of the relationship between inequality and growth that has been observed in the cross-sectional literature but has been drawn into question by recent studies using panel techniques. They find evidence that asset inequality - but not income inequality - has a relatively large negative impact on growth. They also find that a highly unequal distribution of assets reduces the effectiveness of educational interventions. This means that policymakers should be more concerned about households' access to assets, and to the opportunities associated with them, than about the distribution of income. Long-term growth might be improved by measures to prevent large jumps in asset inequality - possibly irreversible asset loss because of exogenous shocks - and by policies to facilitate asset accumulation by the poor. This paper - a product of Rural Development, Development Research Group - is part of a larger effort in the group to examine the determinants and impact of inequality. The authors may be contacted at kdeiningerworldbank.org or polinto@worldbank.org
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