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Table of Contents

  1. Topic pack - Development economics - introduction
  2. 4.1 Economic development (notes)
  3. 4.1 Economic development (questions)
  4. 4.2 Measuring Economic Development (notes)
  5. 4.2 Measuring development (questions)
  6. 4.3 The role of domestic factors in economic development (notes)
    1. Domestic factors - introduction
    2. An introduction to Tanzania
    3. Education
    4. Primary, secondary or tertiary education?
    5. A dependent population
    6. Tanzanian database
    7. Exploring education in Tanzania - data
    8. Exploring education in Tanzania - Maua and Namyani (video)
    9. Exploring education in Tanzania - lost dreams
    10. Exploring education in Tanzania - reflection
    11. Exploring health in Tanzania - data
    12. Exploring health in Tanzania - videos
    13. Exploring health in Tanzania - living with HIV
    14. Exploring health in Tanzania - reflection
    15. Use of appropriate technology
    16. Technology - sawdust stoves and clean water (videos)
    17. Technology - building good roads
    18. Use of appropriate technology - reflection
    19. Access to credit and micro credit
    20. Microcredit in the community (videos)
    21. Microcredit in the news
    22. Microcredit - reflection
    23. The origins of microcredit
    24. What are the pros and cons of microcredit?
    25. Empowerment of women
    26. Issues relating to empowerment of women (video)
    27. Empowerment - in the news
    28. Empowerment - reflection
    29. Income distribution
    30. Lorenz curve and Gini Coefficient
    31. Income distribution - Tanzania
    32. Income distribution - case studies
    33. Income distribution - reflection
    34. Building a development database (part 7)
  7. 4.3 The role of domestic factors in economic development (questions)
  8. 4.4 The role of international trade (notes)
  9. 4.4 The role of international trade (questions)
  10. 4.5 The role of Foreign Direct Investment (FDI) (notes)
  11. 4.5 The role of foreign direct investment (questions)
  12. 4.6 The role of foreign aid and multilaterial development assistance (notes)
  13. 4.6 The role of foreign aid and multilateral development assistance (questions)
  14. 4.7 The role of international debt (notes)
  15. 4.7 The role of international debt (questions)
  16. 4.8 The balance between markets and intervention (notes)
  17. 4.8 The balance between markets and intervention (questions)
  18. Print View

Income distribution

Even though a country is experiencing considerable economic growth, standards of living across the population may not rise if the gains from growth are unevenly distributed.

Remember the picture on Sao Paulo with the super-rich living in close proximity to a favela (see right)?

Income distribution describes how the national income of a country is distributed between its citizens.

Although there is not an example of a country with a completely equal distribution of income, some countries have considerably greater disparity and variation than others.

There are a number of reasons why a country's income may not be evenly distributed:

  • The way in which a country's wealth is distributed. If tangible assets, such as land and buildings and intangible assets, such a human ingenuity, abilities and skills are not evenly distributed, then the income that those resources are capable of generating will not be evenly distributed either. Our understanding of the market place tells us that where something is in short supply relative to demand, its value goes up. This applies equally where there are skill shortages, thus guaranteeing higher incomes for skilled labour
  • Long established historical and political reasons. Certain groups in society have managed to gain ownership of productive assets, such as agricultural land. In South Africa prior to the ending of apartheid (where the various racial groups were forced by the white ruling party to live in separate areas of the country), the majority black African population were excluded from much of the best agricultural land.
  • Social factors such as religion, gender, class, race. It is common in most countries for certain groups to have restricted access to the wealth of a country.