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Inequality, Governance and Development. Mo Ibrahim Foundation Governance for Development in Africa IESE/SOAS, Maputo 2011. Where does this come from?.
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Inequality, Governance and Development Mo Ibrahim Foundation Governance for Development in Africa IESE/SOAS, Maputo 2011
Where does this come from? • “The central argument here is that unequal power leads to the formation of institutions that perpetuate inequalities in power, status, and wealth – and that typically are also bad for the investment, innovation, and risk-taking that underpin long-term growth”
Inequality rankings Source: Palma (2006), “Globalizing Inequality: centrifugal & centripetal forces at work” (DESA Working Paper 35).
Winner takes all? Source: Palma (2006), “Globalizing Inequality: centrifugal & centripetal forces at work” (DESA Working Paper 35).
Winner takes all in Chile Source: Palma (op cit)
The Kuznets Curve Gini coefficient
Fateful inequality • “People had come to think of rising inequality as a natural state of affairs, as how things are” (Brazilian panellist, OECD conference on income inequality in emerging economies, November, 2010)
Does low income inequality mask high gender inequality? Source: Seguino, All Kinds of Inequality are not Created Equal
Capturing Polarisation • “A society is said to be polarised when its members can be classified into different clusters, with each cluster being similar in terms of the attributes of its members (intra-group homogeneity) but with different clusters having members with dissimilar attributes (inter-group heterogeneity)” (Penubarti and Asea, 1996). • “The ratio of between-group inequality to within-group inequality can thus be regarded as a scalar polarisation index because it captures the average distance between the groups in relation to the income differences seen within groups.” （Zhang Kanbur）
Mechanisms of Durable Inequality • Exploitation • Opportunity hoarding • Adaptation • Emulation
The tunnel effect • “As long as the tunnel effect lasts” writes Hirschman, “everybody thinks they are doing better, both those who have got rich and those who have not….But this tolerance is a loan which eventually expires. It is granted in the expectation that, with time, the disparities will grow smaller. But if this does not happen there will undoubtedly be problems and maybe even disaster” (Hirschman and Rothschild, 1973).
Policy Matters 1. Election of Allende. 2. Pinochet coup. 3. year before Pinochet plebiscite to stay in power. 4. First democratic centre left government. 5. second democratic government (same coalition, different policies).
