Abstract
AbstractThis chapter presents an empirical analysis of the determinants of income distribution in 108 developing countries over the period 1988 to 1998. The data comes from the developing-country subset of those used by Milanovic (2005), augmented by information on the cumulative prior participation of the country in IMF programs over the preceding ten years. Just as in Li et al. (1998), the conclusion is that the majority of variation in income inequality is cross-country in nature: this component of income inequality will depend primarily upon the development characteristics of the countries, and not on participation in IMF programs. It follows the pattern observed in the Kuznets U hypothesis. The findings, however, also show that cumulative past participation in IMF programs has a positive effect on the change in share of income held by the lowest quintile of the population. This effect is robust to the inclusion of other developmental indicators.
Published Version
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