Skip to main navigation menu Skip to main content Skip to site footer

Inequality in the Dynamics of Development: Post-Globalisation Changes and 21st Century Challenges


Following Kuznets’ pioneering works, the growth-inequality nexus was stylised as an inverted U-shaped relation. As per that paradigm, economic inequality initially increases when a nation embarks upon a modern economic development process, but later on, declines as the development process cross a certain threshold. The paradigm roughly bears out the experience of the industrialised countries of Europe and North America from the beginning of the nineteenth century up to the mid-1970s. The inevitability of the pattern came under question when data from a broader range of countries became available by the 1970s. Then the post-globalisation experience of countries around the world virtually negated the falling part of Kuznets inverted U. Most countries which profited from globalisation in the form of upward shifts of their growth trajectories also experienced a rise rather than a decline in economic inequality. The present paper is a survey of the large and interesting literature on the changing nature of inequality before and after globalisation. The survey finds that inequality across countries has actually declined as a result of globalisation whereas inequalities within countries have almost invariably increased. Apart from usual factors such as bequest and skewed distributions of wealth, the new factors that have accentuated post-globalisation inequality are widening wage disparities, inequalities of opportunities, the onslaught of automation and rent-seeking activities of a section of the rich. The survey also notes how inequality has been moderated in some counties through effective taxes and transfer programmes. After summarising the arguments why growing economic inequality cannot be left unattended, the survey concludes with an outline of the policy choices which are being currently discussed in the academic and administrative circles.


Economic Inequality, Trade-off, Fair and Unfair Inequality, Elephant Curve, Globalisation


Author Biography

M P Bezbaruah

Professor and Head

Department of Economics

Gauhati University



PIN 781014


  1. Alesina, A., & Rodrik, D. (1994). Distributive Politics and Economic Growth. Quarterly Journal of Economics, 109 (2), 465-490. DOI:10.2307/2118470. DOI:
  2. Acemoglu, D., & Robinson, J. A. (2002). The political economy of the Kuznets curve. Review of development economics, 6 (2), 183-203. DOI:10.1111/1467-9361.00149. DOI:
  3. Atkinson, B.A. (2015). Inequality: What Can Be Done? London: Harvard University Press. DOI:
  4. Basu, K. (2017, April 18). Why reducing inequality could be a matter of survival? World Economic Forum. Retrieved on July 25, 2019, from,
  5. Berg, A. G., & Ostry, J. D. (2011). Inequality and Unsustainable Growth: Two Sides of the Same Coin? Staff Discussion Note 11/08. International Monetary Fund, Washington D C Retrieved on June 16, 2019, from,
  6. Bhagwati, J. & Panagariya A. (2014). Why Growth Matters, USA: A Council of Foreign Relation Books, Public Affairs: New York.
  7. Bishop, J.A., Formby, J. P., & Paul D. T. (1992). Explaining Interstate Variation in Income Inequality. The Review of Economics and Statistics, 74 (3), 553-557. DOI:
  8. Bourguignon, F. (2015). The Globalization of Inequality, USA: Princeton University Press, Princeton and Oxford.
  9. Brunori, P. (2016). How to measure inequality of opportunity: a hands-on guide. LCC Working Paper No: 2016-04. Institute for Social Science Research, University of Queensland.
  10. Byanyima, W. (2019, January, 21). The shocking truth about inequality today. World Economic Forum. Retrieved on July 15, 2019, from,
  11. Checchi, D., Peragine, V., & Serlenga, L. (2010). Fair and unfair income inequalities in Europe. ECINEQ working paper 174, Society for the Study of Economic Inequality.
  12. Corlett, A. (2016). Examining an elephant: globalization and the lower middle class of the rich world. Resolution Foundation Report, London. Retrieved on July 25, 2019, from,
  13. Dabla-Norris, Kochnar, E.K., Suphaphiphat, N., Ricka, F., and Tsounta, E. (2015). Causes and consequences of income inequality: A Global Perspective. IMF Staff Discussion Note SDN/15/15. Retrieved on January 11, 2020, from,
  14. Deaton, A. (2013). The Great Escape: Health, Wealth, and the Origins of Inequality. Princeton University Press, Princeton and Oxford.
  15. Easterly, W. (2007). Inequality does cause underdevelopment: Insights from a new Instrument. Journal of Development Economics, 84(2), 755-776. DOI: 10.1016/j.jdeveco.2006.11.002. DOI:
  16. Gupta, S. (2014). Fiscal Policy and Income Inequality. IMF Policy Paper, International Monetary Fund, Washington, D.C. Retrieved on January 11, 2018, from,
  17. Hussey, A., & Jetter, M. (2017). Long Term Trends in Fair and Unfair Inequality in the United States. Applied Economics, 49(12), 1147-1163. DOI: 10.1080/00036846.2016.1213362. DOI:
  18. Jacobs, D. (2000). Low inequality with low redistribution? An analysis of income distribution in Japan, South Korea and Taiwan compared to Britain. CASE papers case 33, Centre for Analysis of Social Exclusion, London School of Economics, Houghton Street, London.
  19. Kaldor, N. (1955). Alternative Theories of Distribution. The Review of Economic Studies, 23(2), 83-100. Retrieved on January 18, 2018, from, DOI:
  20. Khoo, L., & Dennis, B. (1999). Income Inequality, Fertility Choice, and Economic Growth: Theory and Evidence. Papers 687, Harvard-Institute for International Development, Cambridge, MA.
  21. Kurian N.J. (2000). Widening Regional Inequalities in India: Some Indicators. Economic and Political Weekly, 35(7), 538-550.
  22. Kuznets, S. (1955). Economic Growth and Income Inequality. The American Economic Review, 45(1), 1-28. Retrieved on May 11, 2017, from,
  23. Kuznets, S. (1963). Quantitative Aspects of the Economic Growth of Nations: VIII, Distribution of Income by Size, Economic Development and Cultural Change, 11(2), 1-80. DOI:
  24. Lakner, C., & Milanovic, B. (2016). Global Income Distribution: From the fall of the Berlin Wall to the Great Recession. The World Bank Economic Review, 30(2), 203-232. DOI:
  25. Milanovic, B. (2018, December 10). The Inequality Paradox: Rising Inequalities Nationally, Diminishing Inequality Worldwide. Pro-Market [Blog post]. Retrieved on March 20, 2019, from,
  26. Organization for Economic Co-operation and Development (OECD) (2011). Divided We Stand: Why Inequality Keeps Rising. OECD Publishing. DOI: 10.1787/9789264119536-en. DOI:
  27. Okun, A. M. (2015). Equality and Efficiency: The Big Trade off, Brookings Institution Press, Washington, D.C.
  28. Ostry, J. D., Berg, A., & Tsangarides, C.G. (2014). Redistribution, Inequality and Growth. IMF Staff Discussion Note 14/02, International Monetary Fund, Washington, D.C. Retrieved on September 28, 2017, from,
  29. Lawson, M. & Martin, M. (2018). The Commitment to Reducing Inequality Index 2018: A global ranking of governments based on what they are doing to tackle the gap between rich and poor, Oxfam, October, 2018, Development-Finance International. DOI: 10.21201/2018.3415 DOI:
  30. Perotti, R. (1996). Growth, Income Distribution, and Democracy: What the Data Say. Journal of Economic Growth, 1(2), 149-187. Retrieved on March 26, 2017, from, DOI:
  31. Persson, T., & Tabellini, G. (1994). Is Inequality Harmful for Growth? The American Economic Review, 84(3), 600-621. Retrieved on December 25, 2017, from,
  32. Piketty, T. (2014). Capital in the Twenty-First Century. Translated by Arthur Goldhammer. Cambridge, Mass.: Belknap Le capital au XXIe siècle. Paris: Edition du Seuil, Havard University Press. DOI:
  33. Piketty, T. (2015). The Economics of Inequality. The Belknap Press of Harvard University Press, Cambridge, Massachusetts and London. DOI:
  34. Rao V. V. B. (1999). East Asian Economies: Trends in Poverty and Income Inequality. Economic and Political Weekly, 34(18), 1029-1039. Retrieved on November 18, 2017, from,
  35. Rodrik D. (2014, December 11). Good and Bad Inequality. Project Syndicate, Retrieved on July 25, 2019, from,
  36. Roemer, J. (1998). Equality of Opportunity. Harvard University Press, Cambridge, MA, USA.
  37. Roser, M. (2019, August 28). Global Inequality of Opportunity, Our World in Data. Retrieved on September 25, 2019, from,
  38. Roy, R.P., & Roy, S.N. (2018). Structural change, Trade and Inequality Cross Country Evidence. In S. Paul (Ed.), Kuznets beyond Kuznets: Structural Transformation and Income Inequality in the Era of Globalization in Asia (pp. 93-131). Asian Development Bank Institute, Tokyo, Japan.
  39. Sarkar, S., & Mehta, B. (2010). Income Inequality in India: Pre- and Post-Reform Periods. Economic and Political Weekly, 45(37), 45-55. Retrieved on June 28, 2018, from,
  40. Scheidel, W. (2017). The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Princeton University Press, Princeton and Oxford. DOI:
  41. Stiglitz, J. (2012). The Price of Inequality. New York: Norton.
  42. Stiglitz, J. (2013, October 13). Inequality is a Choice. New York Times, Retrieved on January 22, 2018, from,
  43. The Economist. (2016). Global inequality: Shooting an elephant, Charting globalization’s discontents., Print Version, September 17.
  44. Todaro, M. and Smith (2013). Economic development and Growth (Tenth Edition): Pearson publication, New Delhi, India.
  45. Tullock, G. (1980). Rent seeking as a negative sum game. In J. M. Buchanana, R.D. Tollison & G. Tullock, (Ed.), Toward a Theory of the Rent-seeking Society (pp 16-38). Texas A & M University Press.
  46. Vanham, P. (2018, September 18). The story of Vietnam’s economic miracle. World Economic Forum. Retrieved on February 12, 2019, from,
  47. Wilkinson, R. & Pickett, K. (2009). The Spirit Level: Why greater equality makes societies stronger? Bloomsbury Press, New York, London, Penguin.
  48. Wolff, E. N. (2009). Poverty and income distribution. Blackwell Publication.
  49. Yan, N. (2016, October 2). Automated Inequality. Harvard Political Review. Retrieved on July 22, 2018 from,


Download data is not yet available.