Development

Facundo Alvaredo, Lydia Assouad, Thomas Piketty, 13 August 2018

Survey estimates suggest that inequality in the Middle East is not particularly high despite considerable political conflict. This column uses new ‘distributional national accounts’ data to show that the Middle East is in fact the most unequal region in the world, with both enormous inequality between countries and large inequality within countries. The results emphasise the need to develop mechanisms of regional redistribution and to increase transparency on income and wealth data.

Linda Yueh, 05 August 2018

Between 1960 and 2008, only a dozen or so middle-income countries became prosperous. This column explores the factors affecting how and why some countries become prosperous, while others fail. Consistent with the theories of New Institutional Economics, economies that adopted the economic policies and institutional reforms of successful countries enjoyed the largest increases in prosperity. These successes point to the advantages of looking beyond the economic staples of capital, labour, and technology in fashioning growth policies.

Haichao Fan, Yu Liu, Nancy Qian, Jaya Wen, 29 July 2018

Enforcement of VAT requires accurate records of firm transactions that can be traced to both parties. This column describes how the Chinese government’s digitisation of the country’s VAT process increased enforcement, which in turn increased overall tax revenues in the short run. However, the increased enforcement caused firms to contract in the medium run, reducing the long-run gains in tax revenues.

S. Amer Ahmed, Maurizio Bussolo, Marcio Cruz, Delfin S. Go, Israel Osorio Rodarte, 11 July 2018

Average education levels are increasing in developing countries, but not in high-income countries. The column argues that this 'education wave' in developing countries will reduce global inequality by 2030, with average incomes up to the 90th percentile all benefitting from the trend. However, this equalising effect relies on continued globalisation.

Susan W. Parker, Tom Vogl, 30 June 2018

The short-term success of cash transfers as a form of direct aid has been well recognised in recent research. This column combines Mexican census data with data on a major conditional cash transfer programme to analyse the longer-term effects on the subsequent generation. It finds that such programmes had important positive effects on education and labour market outcomes for men and women, suggesting conditional transfer programmes are successful in raising the children of recipients out of poverty.

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