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Half a world : regional inequality in five great federations, Volume 1
 
Author:Milanovic, Branko; Country:Brazil; United States; China; India; Indonesia;
Date Stored:2005/08/30Document Date:2005/09/01
Document Type:Policy Research Working PaperSubTopics:Governance Indicators; Rural Poverty Reduction; Inequality; Services & Transfers to Poor; Poverty Impact Evaluation
Language:EnglishRegion:East Asia and Pacific; Rest Of The World; South Asia; Latin America & Caribbean
Report Number:WPS3699Collection Title:Policy, Research working paper ; no. WPS 3699
Volume No:1  

Summary: The paper studies regional (spatial) inequality in the five most populous countries in the world: China, India, the United States, Indonesia, and Brazil in the period 1980-2000. They are all federations or quasi-federations composed of entities with substantial economic autonomy. Two types of regional inequalities are considered: Concept 1 inequality, which is inequality between mean incomes (GDP per capita) of states/provinces, and Concept 2 inequality, which is inequality between population-weighted regional mean incomes. The first inequality speaks to the issue of regional convergence, the second, to the issue of overall inequality as perceived by citizens within a nation. All three Asian countries show rising inequality in terms of both concepts in the 1990s. Divergence in income outcomes is particularly noticeable for the most populous states/provinces in China and India. The United States, where regional inequality is the least, shows further convergence. Brazil, with the highest level of regional inequality, displays no trend. A regression analysis fails to establish robust association between the usual macroeconomic variables and the two types of regional inequality.

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