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MacArthur Foundation Network on Inequality & Economic Performance Meeting, Brazil

World Development Report 2006: Equity and Development

November 19-20, 2004
Rio de Janeiro, Brazil

Francisco Ferreira, Berk Ozler and Peter Lanjouw attended an outreach meeting of the McArthur Foundation Network on Inequality and Economic Performance, held jointly with Instituto Futuro Brasil, which included a two-hour session on the WDR 2006; and a consultation organized jointly with IETS with academics, government officials and civil society representatives from five countries in Latin America.  Comments received at the meeting included:

  • We should not push the "inequality causes civil war" line in Chapter 5. The evidence for that link is feeble at best.
  • Instead, perhaps we should have a section on inequality and collective action failures, including on the management of natural resources. Pranab Bardhan has written extensively on this, and has kindly provided links to some of his recent papers on the subject. There is a Bardhan paper in EDCC (2002). Another, with Dayton-Johnson, in the JDE. Baland, Bardhan and Bowles are also editing a volume on the subject, called "Egalitarianism and Sustainability". This might fit well into Chapter 5.
  • Importantly, there was a lot of support for the idea of giving intergenerational transmission of inequality a higher profile. Sam Bowles gave us lots of references. We are currently thinking of that in Chapter 3, as part of the reason we care intrinsically: "if inequalities weren't so persistent across generations, perhaps they would not be so morally objectionable".
  • Participants were sympathetic to the difficulty of summarizing the implications of "the equity angle" to the entire array of policy domains, in Part III, but they felt we could do more than was apparent from the presentation, in terms of organizing it along broad principles, so as to further alleviate the 'laundry list' feeling.  One suggestion was that "aiming for less unequal asset distributions is likely to be less damaging to efficiency than to focus on flows". Another was to present a box somewhere with "The Don'ts of Inequality Reduction", where we explicitly reject ideas to reduce inequality that have not worked, like national ownership of the means of production.

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