Income Distribution and Development

Abstract

This paper is a review of the post-war literature on income distribution and development. It argues that the literature has cycled from one consensus to another, responding to emerging policy issues and new analysis. On the basis of the review, the paper identifies five areas that will command the attention of analysts in the coming two decades: (i) country case studies rather than cross-country regression analysis; (ii) the phenomenon of increasing inequality; (iii) different levels of disaggregation, particularly distribution between broadly defined groups; (iv) intra-household allocation; and (v) alternative modes of redistribution in face of inequality increasing tendencies.