Economic Inequality and Development: Lessons from Global Experiences and Implications for the Arab World

Volume 2|Issue 5| Summer 2015 |Articles

Abstract

This paper is based on the premise that economic inequality will be central to Arab policy makers’ concerns as they devise economic development strategies for the future. In doing so, lessons learned from global experience may be useful in drawing implications for the Arab world. The paper discusses seven case studies from around the world taken from over the last 50 years, providing brief sketches of trends and patterns in the relationship between economic inequality and economic development. The central lesson these experiences teach is that initial structural inequalities matter in determining the equity of the growth path. Successful countries have addressed these structural inequalities through a range of policies. The paper then shows specific implications of the global experience for Arab policy makers, particularly: a focus on the distributional consequences of privatization, an expansion of targeted conditioned cash transfers (CCTs) and public works programs in place of generalized subsidies, and a systematic approach to reducing gender inequalities.

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T.H. Lee Professor of World Affairs, International Professor of Applied Economics, and Professor of Economics at Cornell University, New York.

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