توزیع درآمد و روند توسعه

This paper examines the evolution of the role of income distribution in the process of development. It presents a unified model that encompasses the transition between distinct regimes that have characterized the relationship between income inequality and the process of development. This unified modeling provides an intertemporal reconciliation for conflicting viewpoints about the effect of inequality on economic growth – the classical approach which argues that inequality stimulates capital accumulation and economic growth, and the modern approach which suggests, in contrast, that for sufficiently wealthy economies equality stimulates investment in human capital and economic growth.

This paper examines the dynamic evolution of the effect of income distribution on the process of development. It presents a unified growth model that encompasses the transition between distinct regimes that may have characterized the relationship between income inequality and the process of development. I view the unified modeling of this long transition process as a significant research challenge facing economists interested in the understanding of the role of income inequality in the process of development and in the determination of long-run economic growth.2 Existing theories about the effect of income distribution on the process of development can be classified into two broad categories distinguished by their conflicting predictions. The classical approach suggests that inequality stimulates capital accumulation and thus promotes economic growth, whereas strands of the modern approach argue in contrast that for sufficiently wealthy economies equality stimulates investment in human capital and hence may enhance economic growth. The classical approach was originated by Smith (1776) and was further interpreted and developed by Keynes (1920), Lewis (1954), Kaldor (1957), and Bourguignon (1981). According to this approach, saving rates are increasing function of wealth, and inequality therefore channels resources towards individuals whose marginal propensity to save is higher, increasing aggregate savings and capital accumulation and enhancing the process of development. The modern paradigm has been dominated by two complementary approaches. The capital markets imperfections approach, first developed by Galor and Zeira 1988 and Galor and Zeira 1993, has argued that, in the presence of credit markets imperfection, equality in sufficiently wealthy economies stimulates investment in human capital and in (individual specific projects) and enhances economic growth.3 The political economy approach has subsequently argued that equality diminishes the tendency for socio-political instability, or for distortionary redistribution, and hence it stimulates investment and economic growth.4 A unified model of the process of development may provide, however, an intertemporal reconciliation between these conflicting viewpoints about the effect of inequality on economic growth.5 The classical approach, regarding the positive effect of inequality on the process of development, may reflect the state of the world in early stages of industrialization when physical capital accumulation was the prime engine of economic growth. In contrast, the credit markets imperfections approach regarding the positive effect of equality on economic growth may reflect later stages of development when human capital accumulation becomes a prime engine of economic growth, and credit constraints are still largely binding.

I wish to conclude by stressing the desirability of building unified models of growth and development that can account for the historical evolution in the role of inequality in the process of development. Imposing the constraint that a single model would account for the entire evolutionary process of these variables is a discipline that would improve the understanding of the underlying phenomena, and would generate superior testable predictions and more accurate analysis of the effects of policy interventions.