POLSCI 2XX3 Chapter Notes - Chapter 6: World Development Report, Simon Kuznets, Prime Factor
14 Dec 2015
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Simon kuznets proposed the inverted u-hypothesis which proposed that relative inequality increases with growth, but only temporarily, in the early stages of economic development, improving once countries reach middle-income levels. Initial inequality precipitated by economic growth does not prevent poverty reduction, although it might delay it page 90. An implicit post-war consensus emerged in industrialised nations in the 1950s that government had a responsibility to address inequalities. Western financial institutions sought to show that capitalist economies could address poverty and growth more effectively than socialist egalitarianism. The rise of market liberalism and state retreat in the 1980s came with rising interest rates in monetarist and neoclassical economies. Inequality between nations was decreasing, while within nations it was increasing. Concern with income inequality as a goal of development began to dwindle and pro-poor growth became the core theme of development rather than the impact of growth on income distribution.
