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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
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