Addressing Inequality in South Asia by Martín Rama Tara Béteille Yue Li Pradeep K. Mitra John Lincoln Newman

Author:Martín Rama, Tara Béteille, Yue Li, Pradeep K. Mitra, John Lincoln Newman
Language: eng
Format: epub

Source: Dollar, Kleineberg, and Kraay 2013.

Note: Data are from 118 countries for which household surveys are available for at least two years since the 1970s.

That said, a rigorous statistical analysis of the available microeconomic data across countries suggests that growth has been more propitious to inequality in South Asia—and especially in East Asia—than elsewhere. Looking at the preceding analysis by geographical region, one can see that for the combined East and South Asia regions the estimated elasticity of the consumption per capita of the poorest with respect to average consumption per capita is substantially lower than 1.0 percent in both the 1990s and the 2000s (and significantly so in the 1990s) (figure 2.13). The fastest-growing countries, notably China, have increases in income inequality, making the income growth of the bottom 40 percent lag behind average income growth. Latin America shows the opposite tendency in the 2000s, with an estimate greater than 1.0 percent for the bottom 20 percent. This means that in faster-growing Latin American countries, the income shares of the bottom quintiles also increased more.

Consistent with the Kuznets curve hypothesis, monetary indicators of inequality have increased in the poorest countries in the South Asia region in recent years, whereas they have decreased in the richest ones (figure 2.14). However, the only two countries for which a decrease is observable have a combined population of less than 1 million people, in a region accounting for a fourth of humankind. The vast majority of South Asians have experienced an increase in inequality, sometimes at a fast pace.

FIGURE 2.14 Monetary inequality is increasing across most of South Asia

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