Tolerance for inequality in the process of economic development: theory and evidence

PLEASE NOTE: THE DATE FOR THIS EVENT HAS CHANGED.
Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Friday 08 March 2019
9.30am–11.00am

Venue

Seminar Room 1, Crawford Building 132, Lennox Crossing, ANU

Speaker

Wannaphong Durongkaveroj

Contacts

Paul Burke, Economics PhD Seminar Convener

The process of economic development naturally generates societal inequality. The presence of both winners and losers gives rise to the question of how the losers perceive and respond to the benefits of development. Although inequality has been at the forefront of the development policy debate since the publication of Capital in the Twenty-First Century by Thomas Piketty (2014), why the degree of tolerance for inequality varies among countries remains an unresolved issue. This study aims to examine the inequality-tolerance nexus through a multi-country panel data analysis using a framework that draws on Hirschman (1973). Political conflict is used as a proxy for tolerance. The evidence suggests a U-shaped relationship between political violence and income inequality, supporting the hypothesis that political conflict declines when inequality is ubiquitous followed by a subsequent reversal of this pattern. This bivariate relationship is robust to the inclusion of control variables such as per capita income, regime repressiveness, and three forms of fractionalisation (ethnic, language, and religious).

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