Syndicate content

social welfare

Growth, Top Incomes, and Social Welfare

Aart Kraay's picture
Trends in income inequality are at the center of development policy discussions these days.  Part of this renewed attention is no doubt a tribute to Thomas Piketty’s pioneering work to measure top income shares using income tax data, as well as his much-discussed new book.  Piketty’s work shows some dramatic trends in inequality at the top end of the income distribution.  For example, in countries such as C

Growth, Inequality, and Social Welfare: Cross-Country Evidence

LTD Editors's picture

Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. This method is applied in a new working paper by David Dollar, Tatjana Kleineberg, and Aart Kraay. They find that, in a large panel of industrial and developing countries over the past 40 years, most of the cross-country and over-time variation in changes in social welfare is due to changes in average incomes. In contrast, the changes in inequality observed during this period are on average much smaller than changes in average incomes, are uncorrelated with changes in average incomes, and have contributed relatively little to changes in social welfare.

Where Rubber Hits the Road: Reforming Public Sector Management

Otaviano Canuto's picture

In practice, theory is something else. I've already heard variants of this expression in several countries and languages. Very often from people referring to the gap between abstract, generic principles and the implementation of projects and policies.