Chapter

Landownership Inequality and the Income Distribution Consequences of Economic Growth

Michael Carter

in Inequality Growth and Poverty in an Era of Liberalization and Globalization

Published in print March 2004 | ISBN: 9780199271412
Published online August 2004 | e-ISBN: 9780191601255 | DOI: http://dx.doi.org/10.1093/0199271410.003.0003

Series: WIDER Studies in Development Economics

 Landownership Inequality and the Income Distribution Consequences of Economic Growth

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Addresses the question of whether agrarian structure (land ownership inequality) can explain increasing income inequality. The second section begins the chapter with a conventional income inequality accounting or Gini decomposition framework, which, among other things, provides a convenient vehicle to review the economic theory of the inverted‐U, the assumptions under which it could be expected to hold, and, by implication, the likely reasons for its failure to hold in the contemporary world. This framework also makes it clear that the direct explanatory power of land ownership inequality on income inequality should diminish with the reduction in the share of national income generated in the agricultural sector, and should thus be diminishing rapidly over time in those countries of Asia and Latin America where the weight of the agricultural sector in the overall economy has fallen off dramatically. The third section develops an econometric approach for answering this empirical question, in which flexible estimation methods based on random coefficients or mixed effects models are employed to test for the effect of agrarian structure on income inequality. The last section summarizes the chapter by considering the implications for policy both inside and outside the agricultural sector.

Keywords: agrarian structure; agricultural sector; Asia; econometric analysis; economic policy; economic theory; Gini decomposition; income inequality; income inequality accounting; inequality; inverted‐U; land ownership; land ownership inequality; Latin America; mixed effects models; random coefficients; share of national income

Chapter.  11556 words.  Illustrated.

Subjects: Economic Development and Growth

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