Half a world : regional inequality in five great federations, Vol. 1 of 1

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Half a world : regional inequality in five great federations

Author:	Milanovic, Branko;	Collection Title:	Policy, Research working paper ; no. WPS 3699
Country:	Brazil; United States; China; India; Indonesia;	Date Stored:	2005/08/30
Document Date:	2005/09/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	East Asia and Pacific; Rest Of The World; South Asia; Latin America & Caribbean
Report Number:	WPS3699	SubTopics:	Governance Indicators; Rural Poverty Reduction; Inequality; Services & Transfers to Poor; Poverty Impact Evaluation
Volume No:	1 of 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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