Tolerance for inequality: Hirschman’s tunnel effect revisited

Wannaphong Durongkaveroj

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Along the path of economic development, advancement of some groups naturally generates economic disparity in a society. The concurrent presence of winners and losers invariably gives rise to the psychological economic question of how the losers perceive, and respond to, the benefits of development. The ‘tunnel effect’ proposed by Hirschman (1973) provides valuable insights for understanding the changing tolerance for economic inequality among the losers in the process of economic growth. This paper critically discusses this proposition, reviews the related literature, and provides possible extensions.

Keywords: Income Inequality; Tunnel Effect; Development (search for similar items in EconPapers)
JEL-codes: D63 O10 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2018
New Economics Papers: this item is included in nep-his and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2018-23

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