World Income Distribution Research Articles

Institutional Barrier and the World Income Distribution

The objective of this paper is to discuss the relationship of the openness and the impact of institutional reforms in the participation of the product of individual countries in global output. Therefore, it is based on economic simulations, a type of alternative approach that uses mathematical techniques and deductions to solve an objective model. The economic simulation of this work reflects that the trade opening level is an important factor of weight for possible institutional alterations in the economies. It is noticeable that, in the countries with low opening level, the cost of the capital is the main setback for the economic growth. And, in those economies with high opening level, the largest dynamics would compensate the problems caused by the cost of the capital. When compared the two types of reforms (continuous versus punctual), the “continuous” reform will bring a more expressive gain quality of the relative product than the “punctual” reform.

The Reversal of Fortune in Argentina: Exploring Industrial Labour Productivity in Comparison to Australia, 1907-1973

TSEG (Tijdschrift voor Sociale en Economische Geschiedenis) - The Low Countries Journal of Social and Economic History, is het Nederlands-Vlaamse vaktijdschrift op het gebied van de sociale en economische geschiedenis

Emerging World Order? From Multipolarity to Multilateralism in the G20, the World Bank, and the IMF

Many developing and transitional countries have grown faster than advanced countries in the past decade, resulting in a shift in the distribution of world income in their favor. China is now the second largest economy in the world, behind the United States and ahead of Japan. As the relative economic weight of China and several others has come to match or exceed that of the middle-ranking G7 economies, the world economy has shifted from “unipolar” toward “multipolar,” less dominated by the G7. How is this change being translated into changes in authority and influence within multilateral organizations like the G20, the World Bank, and the International Monetary Fund (IMF)? Alarm bells are ringing in G7 capitals about G7 loss of influence. According to a WikiLeaks cable from the senior U.S. official for the G20 process, from January 2010, “It is remarkable how closely coordinated the BASIC group of countries [Brazil, South Africa, India, China] have become in international fora, taking turns to impede US/EU initiatives and playing the US and EU off against each other.” This essay suggests that the shift in power is much smaller than the headlines or private alarm bells suggest. The United States remains the dominant state, and the G7 states together continue to exercise primacy, but now more fearfully and defensively. China is split between asserting itself as “the wave of the future” and defending itself as too poor to take on global responsibilities (it is roughly 100th in the per capita income hierarchy). The combination of G7 defensiveness and emerging states’ jealous guarding of sovereignty produces a spirit of Westphalian assertion in international fora, or “every state for itself.” On the assumption that the world economy is in a transitional period, the article suggests reforms in the G20 and the World Bank that would boost their role and legitimacy as multilateral organizations in a more multipolar world.

Developing countries - trends, differentiation

Socio-economic backwardness is usually defined by common characteristics or classification. The differences between the DMEs and DCs in the case of resources (prevalence of DCs) and in the case of outputs and performance (prevalence of DMEs) is evident. The difference in the economic level and the level of living between the DCs and DMEs had deepened during the last three decades, however, it has to be pointed out again, that this difference is increasing still more slowly what can be a presage of an approaching turn (in the sense of the possible beginning of a slow decrease of this gap). While the per capita GDP indicator is regarded as one of the most important indicators of the economic level, the HDI can be regarded as the most important indicator of the given country population level of living and as such, it is hitherto rather underestimated. Similarly, the CPM indicator (as the measure of poverty), which is a composed indicator, has a higher testifying ability than a simple income level per capita in USD defined as the poverty level. It is obvious, that economic development is impossible without social development, and vice versa. Generally, the gap between the more developed developing countries, measured through the world income distribution, is then still widening. As a positive phenomenon, there can be, however, regarded the fact that deepening of this gap occurs at a lower rate. Through a more detailed analysis by the individual indicators, the most valuable from which are the indicators composed from several partial indicators (for example HDI, CPM), a certain tendencies towards the gradual improvement of the socio-economic situation in developing countries as a whole – but with the relevant differences in the individual regions of the world – can be discerned. In general, close ties have been proven between the economic growth and the growth of the population level of living, their mutual influencing and the main elements from which they are composed.

A Comparative World-Systems Analysis of Settler Colonies in the Hispanic and Anglo Realms

The term 'settler economies' refers to a distinctive group of societies formed and dominated by white European migrants in the nineteenth and early twentieth centuries. In sharp contrast to the colonial experience of more densely populated tropical areas, these temperate-latitude societies were clustered near the top of the world income distribution at about 1900. They had risen to this status by explosive economic growth over a few decades within the nineteenth-century world economy. This was an era of growing divergence between rich and poor economies, when most colonial territories were on the losing side as components of a global periphery ensnared in the 'Great Divergence' of the world economy that occurred between about 1800 and the late twentieth century.

World income distribution and mobility

In this paper, we show that over the period 1970-2007, the world income distribution expressed in terms of GDP per capita invariably scales down as an exponential law. To visualize dynamical characteristics behind this macro-stability, we use a clock form to present the GDP per capita and rank of the 163 countries over 38 years. Correspondingly, the average variations over time are quantified by absolute and relative mobility indexes. Furthermore, a growth mobility index concerning the share of each country is proposed and its decomposition is also presented in the clock form.

Colonialism, Property Rights and the Modern World Income Distribution

Influential studies by Acemoglu, Johnson and Robinson claim that colonial legacies explain the origins of development-promoting property rights and thus account for the modern world income distribution. Specifically, they argue that European colonial powers engineered a global ‘reversal of fortune’, bringing property rights and prosperity to relatively uninhabited colonies while imposing inefficient institutions on locales with less potential for settlement. We re-evaluate their theoretical arguments and empirical findings and come to a different conclusion. We concur that British colonialism dramatically restructured four colonies, resulting in phenomenal economic success. For the majority of the world, however, colonialism had no discernible effect on property rights. We conclude that contemporary development studies must find another explanation for the modern world income distribution.

Modeling economic growth fuelled by science and technology

This paper suggests a simulation model to investigate how science and technology fuel economic growth. This model is built upon a synthesis of technological capabilities represented by national innovation systems. This paper gathers data of papers and patents for 183 countries between 1999 and 2003, as well as GDP and population for 2003. These data show a strong correlation between science, technology and income. Three simulation exercises are performed. Feeding our algorithm with data for population, patents and scientific papers, we obtain the world income distribution. These results support our conjecture on the role of science and technology as sources of the wealth of nations.

Directed Technology Adoption, Human Capital Formation and World Income Distribution

This paper investigates the effects of skill bias technical change at the frontier on the evolution of output and human capital in the adopting countries. The framework introduces a novel feature by connecting the direction of technology adoption to a sequential process of skill accumulation, where the returns of advanced human capital depend on the quality of basic education. I find that moderate skill bias produces convergence in output per capita, while strong skill bias leads to convergence clubs. The predictions of the model are broadly consistent with the evolution of world income distribution and educational attainments during 1960-2000.

Simple and effective boundary correction for kernel densities and regression with an application to the world income and Engel curve estimation

In both nonparametric density estimation and regression, the so-called boundary effects, i.e. the bias and variance increase due to one sided data information, can be quite serious. For estimation performed on transformed variables this problem can easily get boosted and may distort substantially the final estimates, and consequently the conclusions. After a brief review of some existing methods a new, straightforward and very simple boundary correction is proposed, applying local bandwidth variation at the boundaries. The statistical behavior is discussed and the performance for density and regression estimation is studied for small and moderate sample sizes. In a simulation study this method is shown to perform very well. Furthermore, it appears to be excellent for estimating the world income distribution, and Engel curves in economics.

China and the transformation of global capitalism

With one of the world's fastest-growing economies and a population quickly approaching two billion, China holds substantial sway over global financial, social, and cultural networks. This volume explains China's economic rise and liberalization and assesses how this growth is reshaping the structure and dynamics of global capitalism in the twenty-first century. China has historically been the center of Asian trade, economic, and financial networks, and its global influence continues to expand in the twenty-first century. In exploring the causes for and effects of China's resurging power, this volume takes a broad, long-term view that reaches well beyond economics for answers. Contributors explore the vast web of complex issues raised by China's ascendancy. The first three chapters discuss the global and historical origins of China's shift to a market economy and that transformation's impact on the international market system. Subsequent essays explore the ability of large Chinese manufacturers to counter the might of transnational retailers, the effect of China's rise on world income distribution and labor, and the consequences of a stronger China for its two most powerful neighbors, Russia and Japan. The concluding chapter questions whether China's growth is sustainable and if it will ultimately shift the center of global capitalism from the West to the East. This cutting-edge collection of works by leading global political economists links current events to long-term trends in global capitalist development to provide a comprehensive analysis of China's impact on the world. Scholars of China, world systems and globalization, international relations, and political economy will find this assessment worthy of study and an important starting point for further research. Contributors: Richard P. Appelbaum, Giovanni Arrighi, Edna Bonacich, Jozsef Borocz, Paul S. Ciccantell, John Gulick, Ho-Fung Hung, Stephanie Luce, Beverly J. Silver, Alvin Y. So, and Lu Zhang.

International migration and the world income distribution

AbstractEmigrants moving from poor to rich countries experience large income gains on average. These gains are further augmented by remittances that allow a portion of the gains to be spent at lower sending‐country prices. Taking advantage of recently available estimates of emigration‐related income gains, this paper estimates the direct impact of international migration on the world income distribution. We find that international migration raises world income per person by just under 1 per cent, while it raises the incomes of those born in developing countries by approximately 2¼ per cent relative to the no‐migration benchmark. Allowing for the remittance price effect augments these gains by about half. International migration also decreases the between‐country component of world inequality (as measured by the between‐country Theil coefficient) by about 2 per cent. While these aggregate income gains are significant, even small ‘brain‐drain’ related adverse growth effects could quickly swamp the direct gains to migrants where rich‐country immigration policies have a strong skill bias. A surer route to realising the potential of migration to increase world welfare would be to expand emigration opportunities for the less skilled. Copyright © 2009 John Wiley & Sons, Ltd.

Economic transformation, population growth and the long-run world income distribution

We present and calibrate a model where trade with advanced economies spurs development, and trade opportunities depend on the relative population in advanced and developing countries. As developing countries become advanced, prospects improve for the remaining developing countries. If population growth differentials between developing and advanced economies are small, economic development accelerates over time. Otherwise, long-run global prosperity requires a sufficiently large initial population in advanced countries. More open countries develop faster, but more openness by all developing countries may only modestly increase their aggregate growth. China's development may hurt developing countries in the short-run, but improves their long-run prospects.

Book Reviews

Robert E. Lipsey of National Bureau of Economic Research reviews “What Do We Know About Globalization? Issues of Poverty and Income Distribution” by Guillermo de la Dehesa,. The EconLit Abstract of the reviewed work begins “Examines the two fundamental arguments that are often raised against globalization--that it produces inequality and that it increases poverty. Discusses technical progress and economic prosperity; technical progress, poverty, and inequality; growth reducing exogenous and structural factors; growth reducing endogenous factors; the world distribution of income; globalization and inequality; more developing countries’ access to developed countries’ markets; more foreign direct investment to developing countries; more integration of trade and finance; more and better development aid; and more migration. De la Dehesa is Chairman of the Centre for Economic Policy Research. Bibliography; index.”

Development Accounting with Spatial Effects

The aim of this paper is to show how the spatial autocorrelation phenomenon often observed in the world distribution of income per capita, can be introduced structurally as the outcome of spillovers effects into a development accounting equation. Neglecting spatial autocorrelation potentially biases our vision of the role played by physical capital in the development process. We show that the total contribution of physical capital accounts for almost 90% of the differences between developing countries and the richest countries.

Zipf's law and world income distribution

The aim of this article is to demonstrate regularity in the world income distribution. In particular, using GDP per capita data for the period 1980 to 2004, the article shows that the world income distribution follows the well know ‘rank-size rule’.

What do we know about globalization?: issues of poverty and income distribution

Foreword: Stanley Fischer (Bank of Israel). Introduction. 1. Technical Progress and Economic Prosperity. 2. Technical Progress, Poverty, and Inequality. 3. Growth Reducing Exogenous and Structural Factors. 4. Growth Reducing Endogenous Factors. 5. The World Distribution of Income. 6. Globalization and Inequality. 7. More Developing Countries' Access to Developed Countries' Markets. 8. More Foreign Direct Investment to Developing Countries. 9. More Integration of Trade and Finance. 10. More and Better Development Aid. 11. More Migration. Conclusion. Bibliography. Index

Introduction: Globalization–Poverty Channels and Case Studies from Sub-Saharan Africa

In 2004 the United Nations University World Institute for Development Economics Research (UNU-WIDER) embarked on a large-scale research project on the ‘Impact of Globalization on the World’s Poor’ co-directed by Machiko Nissanke and Erik Thorbecke. The first conference was essentially conceptual in nature, meant to understand better the various mechanisms and channels through which globalization affects the poor either directly or indirectly. The other three conferences focused on each of the major regions of the developing world: Asia, Africa and Latin America. Theobjectivesofthisintroductionarethreefold:first,toreviewbrieflyhow the forces of globalization influence poverty in general; second, to describe and discuss the main transmission channels and mechanisms; and third to analyze the impact of globalization on Africa and present an overview of the six Africa case studies included in this issue. 1. The Impact of Globalization on the World’s Poor Globalization provides a strong potential for a major reduction in poverty in the developing world because it creates an environment conducive to fastereconomicgrowthandtransmissionofknowledge. 1 However,structural factors and policies within the world economy and national economies have impeded the full transmission of the benefits of the various channels of globalization for poverty reduction. In particular sub-Saharan Africa (SSA) hasbeenrelativelylessaffectedbytheforcesofglobalizationthanotherparts of the world. World income distribution continues to be very unequal and many poor countries particularly in Africa are stagnating. Moreover, there is much empirical evidence that openness contributes to more within-country

Polarization and Interstate Conflict

Esteban & Ray formalize the argument that conflict is likely to be more intense when individuals in a society are divided into two clearly identifiable groups where differences within groups are considerably smaller than differences between groups. They show that such polarization increases conflict, and they introduce a theoretical basis for its quantitative measurement. This article applies Esteban & Ray's (ER) measure of polarization to two international distributions: the world income distribution and the distribution of political systems. The article discusses extensions of the ER measure that render it independent of the number of groups in the system, and investigates empirically whether any of the three types of polarization are associated with conflict in the form of militarized interstate disputes. The results are rather inconclusive, despite the fact that some of the micro-level regularities consistent with the polarization and conflict argument have solid support in previous studies.

GLOBALIZATION AND INCOME DISTRIBUTION EFFECTS

Globalization has been one of the most critical phenomena in the 20. century. However, there is no consensus about its benefits and losses notwithstanding ongoing argues on it. There are two important factors which affect globalization. One of them is decreasing in transportation and communication costs for private sector, which result from technological innovations. And the other is decreasing barriers on trade, direct foreign investments and capital flows by which affects of the politicies implemented by developed countries and international organizations. There are a lot of opinions against globalization both in developed and in developing countries. One of the basic causes of these reactions against globalization is increasing unemployment and shrinking income of some groups coincides with increasing foreign trade, and the other is increasing economic instabilities especially in developing countries during the globalization. In this context, globalization plays an important role in both distribution of world income among the countries and distribution of national income. Therefore, the aim of this study is to evaluate the effects of globalization on poverty and income inequality in the framework of developing and developed countries.