ePOL101 Lecture #17 - Seeing Inequality
• Bearing witness
• Counting Inequality
• $1 / day versus $2 / day - 45% in China still living on less than 2% / day
4 Cases / Vignettes
1. Global Inequality
• Keynesian Compromise and Embedded Liberalism
• Bretton Woods - IMF & World Bank, fixed currency & US Dollar
• GATT - General Agreement on Tariffs & Trade
• European Reconstruction - EU, Marshall Plan
• 1950!s - 1970!s --> Golden Age of development
• But it is diverging development & by the 1970!s certain regions were
regressing in negative development
• Decline of Keynesian Compromise
• Debt Crises - 1973 OPEC price changes, Breakdown of Bretton Woods.
Massive uncontrollable loans.
• The development gaps are divergent, they are widening. The poor countries will
never close the gap. It is impossible given current or even optimistic growth rates.
2. The !work & welfare" state / Domestic re-distribution
• Kuznets! income inequality curve. As income per capita grows, the middle
region sees the most inequality. (X = GDP, Y = Inequality)
• Political economy of the welfare state
• Industrial Capitalism
• Unionization of labour - work and welfare
• Social democratic political parties
• Social citizenship and re-distribution
• Reducing Inequality in Advanced Industrial Democracies
• GINI Coefficient - 0 is complete equality, 1 is complete inequality.
• Canada - 0.32
• Sweden - 0.23
• Haiti - 0.59
• Nepal - 0.47
• Brazil - 0.6
• Inequality in China - 7x difference (between top 10% to bottom 10%) in 1998 to 23x in
2009. China!s equality is slipping drastically.
• China!s economy is growing at 10% a year, but 600 million Chinese still live
under $2 a day.
• The Urban is growing at an amazing rate, the rural parts of China are slipping
• Challenges to the Welfare State
• Weak fiscal capacity
GINI Coefficient is
much lower in LDC!s
than in the welfare