Inequality, Economic Growth and Natural Resources Rent: Evidence From the Middle East and North Africa

Hamid E. Ali and Sara M. Sami
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Hamid E. Ali: The American University in Cairo
Sara M. Sami: The American University in Cairo

Chapter 3 in Contemporary Issues in Microeconomics, 2016, pp 50-76 from Palgrave Macmillan

Abstract: Abstract The great interest in inequality is linked to the shared belief that the increase in inequality has been on the rise among countries and within countries. According to the World Economic Forum (2014), the widening income disparity is the second greatest worldwide risk because it is affecting social stability within countries and threating global security. Other scholars have suggested that the consequence of the increase in the level of inequality has been compared to the system of “patrimonial capitalism” because the economy is dominated by inherited wealth that has led, in turn, to the increase of power and the creation of an oligarchy; as long as the capital rate of return exceeds the economic growth, the inequality persists (Piketty, 2014). An earlier study by Stiglitz (2013) showed that the bottom 90 percent of the population in the US had seen their wages rise by only 15 percent in the past 30 years whereas the top 1 percent, by contrast, enjoyed an increase of 150 percent over the same time frame. He concluded his findings that the top 1 percent in US controls around 40 percent of the nation’s wealth. According to Stiglitz (2013), though, market forces shape the degree of inequality, the government policies shape those market forces.

Keywords: Economic Growth; Income Inequality; Gini Index; Lorenz Curve; European Economic Review (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1057/9781137529718_4

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