Global Redistribution of Income

The actual distribution of world income across countries is extremely unequal, much higher than the within country inequality faced by most countries. The question studied in this paper is: How do international policies on aid, trade, and factor movements affect the international distribution of income? To begin to answer this question, the authors calculate the impact by decile of the actual level of aid flows and the effect on potential income of merchandise trade restrictions by high-income countries. They find that aid's distributional impact is equality enhancing. While it is extremely small in terms of changes in standard inequality measures, it is of some importance for the lowest decile of the world's income distribution. The authors also find that some of this impact is counteracted by lost potential income in the lower deciles from merchandise trade barriers imposed by high-income countries. In brief, there is a contradiction in international policies where aid's equality-enhancing effect is somewhat offset by protectionism. They also discuss some of the analytical difficulties with extending this analysis of redistribution to other forms of international factor flows-more specifically, migrant worker and profit remittances. The analysis presented is partial and static and ignores within country distribution. As such, the authors suggest that future research should explore the distributional consequences of the broader general equilibrium effects, dynamic effects, and externalities associated with aid, trade, and factor flows. Future research should also analyze the within country distributional impacts of international policies.

Bibliographic Details

Main Authors:	Bourguignon, François, Levin, Victoria, Rosenblatt, David
Language:	English
Published:	World Bank, Washington, DC 2006-07
Subjects:	ABSOLUTE VALUE, AGGREGATE INEQUALITY, BASE YEAR, BENCHMARK, BENCHMARKS, BILATERAL DONORS, BILATERAL GRANTS, CAPITAL ACCUMULATION, CAPITAL FLOWS, CITIZEN, CITIZENS, COUNTRIES OF ORIGIN, COUNTRY OF ORIGIN, CUMULATIVE POPULATION, DEBT, DEBT FORGIVENESS, DEBT SERVICE, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPING WORLD, DEVELOPMENT ASSISTANCE, DEVELOPMENT ECONOMICS, DISTRIBUTIONAL IMPACT, ECONOMIC BARRIERS, ECONOMIC GROWTH, ECONOMIC REVIEW, ECONOMIES OF SCALE, EMPIRICAL ANALYSIS, EMPIRICAL LITERATURE, EQUAL DISTRIBUTION, EQUILIBRIUM, EXPORTS, EXTERNALITIES, FACTOR INCOME, FOREIGN AID, FOREIGN DIRECT INVESTMENT, FUTURE RESEARCH, GDP, GDP DEFLATOR, GENERAL EQUILIBRIUM MODEL, GINI COEFFICIENT, GRANT ELEMENTS, GROSS NATIONAL INCOME, GROWTH PROSPECTS, GROWTH RATES, HIGH INEQUALITY, HOST COUNTRIES, HOUSEHOLD INCOME, HOUSEHOLD SURVEY DATA, IMMIGRATION, IMMIGRATION POLICIES, IMPACT ANALYSIS, IMPACT OF POLICIES, INCOME, INCOME DISTRIBUTION, INCOME INEQUALITY, INCOME REDISTRIBUTION, INCOME TRANSFER, INCOMES, INCREASED REDISTRIBUTION, INDIVIDUAL COUNTRIES, INEQUALITY, INEQUALITY AVERSION, INEQUALITY MEASURES, INTERNATIONAL BORDERS, INTERNATIONAL MIGRATION, INTERNATIONAL POLICIES, INTERNATIONAL POLICY, INTERNATIONAL TRADE, LABOR FORCE, LATIN AMERICAN, LORENZ CURVE, LOW-INCOME COUNTRIES, MARKET IMPERFECTIONS, MIGRANT, MIGRANT WORKERS, MIGRANTS, MIGRATION, MULTILATERAL TRADE, NATIONAL GOVERNMENTS, NATIONAL INCOME, NATIONAL LEVEL, NATIONALS, NEGATIVE GROWTH, NEGATIVE IMPACT, OFFICIAL DEVELOPMENT ASSISTANCE, OPEN ECONOMY, POLICY IMPLICATIONS, POLICY REFORMS, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POOR COUNTRIES, POPULATION SIZE, POVERTY REDUCTION, POWER PARITY, PROGRAMS, PROGRESS, PROTECTIONISM, PUBLIC EXPENDITURES, PURCHASING POWER, PURCHASING POWER PARITY, RATES OF GROWTH, REAL EXCHANGE RATE, REAL INCOME, RECIPIENT COUNTRIES, RECIPIENT COUNTRY, REDISTRIBUTION POLICIES, REDISTRIBUTIVE EFFECTS, REDISTRIBUTIVE IMPACT, REGRESSION RESULTS, RELATIVE INCOME, REMITTANCE, REMITTANCES, REPATRIATION, RESPECT, SIMULATIONS, SOCIAL WELFARE, SUB-SAHARAN AFRICA, TARGETING, TRADE BALANCE, TRADE BARRIERS, TRADE LIBERALIZATION, TRADE REFORMS, VALUE JUDGMENTS, WAR, WELL-BEING, WORLD POPULATION,
Online Access:	http://documents.worldbank.org/curated/en/2006/07/6913954/global-redistribution-income https://hdl.handle.net/10986/8384
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