WeD and Inequality: Issues from Recent Work on Inequality in Middle Income Countries

1. WeD and Inequality: Issues from Recent Work on Inequality in Middle Income Countries Andy McKay, University of Bath Researching Wellbeing workshop, Hanse Institute, July 2004

2. Researching Wellbeing Introduction • Inequality as relevant aspect of wellbeing • Instrumental reasons • Intrinsic reasons • And a key theme of WeD proposal • Context of this presentation • Drawing on other work, to initiate discussion about WeD work in this area

3. Researching Wellbeing Concepts of inequality • Inequality as an issue at local, national and international levels • Requires a universal • cf. legal understandings of rights • Focus on differentiation – quantification • Inequality of what? • Multidimensional • Outcomes and opportunities, and intermediate cases • But some wellbeing indicators zero-one

4. Researching Wellbeing Concepts of inequality (2) • Inequality between whom? • Individuals and households • But also groups of individuals (e.g. ethnic groups, regions or countries) • Inequality over what time horizon? • Short and long term – need for a dynamic perspective • Both horizontal and vertical inequality are important – for explanation, and for policy responses

5. Researching Wellbeing Horizontal inequality • Inequality between important groups of individuals • e.g. racial groups in Brazil or South Africa; regions in China • Relationship to concepts of social exclusion? • Discrimination as a contributory factor • Even perception of horizontal inequality may be sufficient • Horizontal inequality important for understanding and for policy response • Rights as a key issue • Example of “myth of racial democracy” in Brazil

6. Researching Wellbeing

7. Researching Wellbeing Discrimination and horizontal inequality • Differences between groups not just due to discrimination • But can play an important part and needs specific policy responses • Different forms of discrimination • Formal and informal • Direct and indirect • persistence • Difficult though to identify extent of discrimination

8. Researching Wellbeing Discrimination (2) • Example of gender differentials in wages • Partly reflects different qualifications and occupations • Discrimination where those of equal qualifications in same occupation paid differently • Still difficult to identify – what qualification are relevant? • But “pre-entry” discrimination? • Educational qualifications • Occupational distribution

9. Researching Wellbeing Vertical inequality • In fact intra-group inequality generally larger than inter-group inequality • Measures to tackle horizontal inequality unlikely to address this (could increase it?) • Need for a broader understanding of factors underlying inequality • Policies, external shocks, nature of redistributive spending, use of services etc. • e.g. “universal” health spending in Brazil

10. Researching Wellbeing Vertical inequality (2) • Key importance of political factors influencing distribution of power e.g. • Institutions • expected patterns of behaviour, rules of the game • e.g. ability to form horizontal alliances • Legacy of history e.g. clientelist government in Latin America • Democracy, decentralisation etc. – and their effectiveness in practice

11. Researching Wellbeing Relevance for work on wellbeing • High inequality does have adverse impacts on wellbeing • Inequality as an issue within and between communities