Another legacy of the COVID-19 pandemic: Income divergence

The uneven economic recovery from the pandemic-induced global recession of 2020 is expected to disrupt a multi-decade trend of per capita income convergence between advanced and emerging market and developing economies (EMDEs). This stands in contrast to the global recession following the global financial crisis. Should downside risks to the global recovery, in particular financial market stress, materialize, they are likely to set back growth in EMDEs more than in advanced economies in part because of the more limited policy space remaining in EMDEs, and would further widen per capita income divergence.     

Leadership selection: Can changing the default break the glass ceiling?

Leadership selection often requires candidates to actively choose to express their interest. Using a series of incentivized experiments with more than 1000 participants, we compare such an Opt-in mechanism with an Opt-out mechanism where everyone qualified for the position is in the candidate pool by default, but individuals can choose to opt out of the selection process. The results reveal a gender gap in participation decisions under the Opt-in mechanism. The gender gap exists even when individuals know they are the top performers, suggesting helping women improve their performance may not necessarily reduce gender gaps. Importantly, women are more likely to participate under the Opt-out mechanism and gender gaps in leadership selection are reduced.     

Beyond Piketty: A new perspective on poverty and inequality in India

The socio-economic literature has focused much on how overall inequality in income distribution (frequently measured by the Gini coefficient) undermines the “trickle down” effect. In other words, the higher the inequality in the income distribution, the lower is the growth elasticity of poverty. However, with the publication of Piketty’s magnum opus (2014), and a subsequent study by Chancel and Piketty (2017) of evolution of income inequality in India since 1922, the focus has shifted to the income disparity between the richest 1% (or 0.01%) and the bottom 50%. Their central argument is that the rapid growth of income at the top end of millionaires and billionaires is a by-product of growth. The present study extends this argument by linking it to poverty indices in India. Based on the India Human Development Survey 2005–12 – a nationwide panel survey-we examine the links between poverty and income inequality, especially in the upper tail relative to the bottom 50%, state affluence (measured in per capita income) and their interaction or their joint effect. Another feature of our research is that we analyse their effects on the FGT class of poverty indices. The results are similar in as much as direction of association is concerned but the elasticities vary with the poverty index. The growth elasticities are negative and significant for all poverty indices. In all three cases, the disparity between the income share of the top 1% and share of the bottom 50% is associated with greater poverty. These elasticities are much higher than the (absolute) income elasticities except in the case of the poverty gap. The largest increase occurs in the poverty gap squared – a 1% greater income disparity is associated with a 1.24% higher value of this index. Thus the consequences of even a small increase in the income disparity are alarming for the poorest.     

All about ideology? Reading Piketty´s with Latin American lenses

This review essay evaluates Capital and Ideology in light of the Latin American experience. Given its history of exploitation and high levels of inequality, the region constitutes an essential case study. By considering the Latin America case, we can also benefit from the many insights coming from within the region and often overlooked by the Anglo‐Saxon (dominant) literature. The paper makes two different arguments. First, asymmetries in economic and political power are the main drivers of long‐term inequality. Following insights from structuralism, I show how the organization of the global economy has shaped domestic patterns of income distribution in many parts of the world. The dependent character of economic development together with the power of domestic elites explain Latin America's stubborn inequality; ideology has historically been more an instrument than an underlying driver. Second, we cannot understand the evolution of income distribution without considering the role of dictatorships. While Capital and Ideology explains convincingly why liberal democracies are not working, it never properly considers the risk and costs of (conservative) authoritarian regimes. In thinking about policy responses, the essay also highlights the importance of strengthening democracy, fighting dictatorships, and enhancing the influence of social movements.     

Coalition-building and the forging of solidarity across difference and inequality

Diverse coalitions hold great potential for social movements, but they also face tremendous challenges. In this article, I review the literature on diverse alliances with a focus on how trust, commitment, and ultimately, solidarity can be developed and sustained across divides. The article begins by discussing the needs of diverse alliances to build trust and commitment, and the coalitional characteristics deemed vital for doing so, with a focus on shared neutral space, ongoing interaction, and social ties and bridgebuilders. Five coalitional processes and practices are identified and discussed that have been empirically found or theorized to be imperative for cultivating solidarity across difference and inequality. These processes include (a) uniting around shared principles while engaging difference; (b) acknowledging and managing inequalities; (c) making space for each other; (d) attention to managing conflicts; and (e) actions that confirm the shared commitments and negotiated identity. I conclude by evaluating the state of research on developing and sustaining alliances across divides.     

Is there a global super-bourgeoisie?

In recent decades, accelerating processes of globalization and an increase in economic inequality in most of the world's countries have raised the question of the emergence of a new bourgeoisie integrated at the global level, sometimes described as a global super-bourgeoisie. This group would be distinguished by its unequaled level of wealth and global interconnectedness, its transnational ubiquity and concentration in the planet's major global cities, its specific culture, consumption habits, sites of sociability and shared references, and even by class consciousness and capacity to act collectively. This article successively discusses how the social sciences have examined these various dimensions of the question and begun to provide systematic empirical answers.     

Unpacking Within‐Household Gender Differences in Partners' Subjective Benefits From Household Income

The authors examine how contributions to household resources, indicated by employment status, influence satisfaction with household income (SWHI) for members of male/female couples. They take changes in SWHI, which may differ within couples, to indicate changes in perceived benefits from their common household income, benefits that can go beyond individual consumption. Using data from the British Household Panel Survey for 2,396 couples from 1996 to 2007, three gender effects are identified. First, men predominate in making the type of contribution that most positively influences SWHI, namely, full‐time employment. Second, the effect of contributions depends on the gender of the contributor, with men's employment being more influential than women's. Third, within couples, making the more influential contribution, as men tend to do, leads to relatively greater SWHI. The authors conclude that gender asymmetry in contributions made to household resources is one way in which gender inequalities invade and inhabit households.     

A New Kuznetsian Dynamic: The Knowledge Economy and Income Inequality in the United States, 1917–2008

The rise of the knowledge economy resulted in higher levels of income inequality in the United States and forced many to question the Kuznets Inverted‐U hypothesis. However, this study argues that the establishment of a knowledge economy does not negate the importance of employment shifts for income inequality. Instead, the expansion of knowledge employment alters the major sectors that are responsible for the overall distribution of income. To this end, this article presents the key argument that the current service–knowledge transition impacts income inequality trends, of today, in a way that is similar to the agricultural–industrial transition, of the past. According to the autoregressive conditional heteroskedasticity regressions, the agricultural–industrial transition returns stronger associations with income inequality in the United States before 1950. The agricultural–industrial transition's impact diminishes thereafter as the service–knowledge transition shares a more robust association with income inequality after 1980.     

Ethiopia's developmental state: A building stability framework assessment

Ethiopia has been lauded for its economic growth and progress in human development indicators. For some, that success is rooted in the developmental state approach advocated by the government. For others, the theory of the developmental state and the practice in Ethiopia were often at odds. Up until 2018, ideas that challenged the state and its approaches were not welcome, and politicians, academics and journalists were jailed for expressing alternative views. However, this appears to have changed, and in June 2018 the Deputy Prime Minister called for debate on the developmental state model. This article explores Ethiopia's developmental state model using the building stability framework, analysing its ability to establish fair power structures, foster inclusive economic growth, develop conflict‐resolution mechanisms, create effective and legitimate institutions, and enable a supportive regional environment. We find the developmental state was effective in a number of ways, but that this modality of governance appears to have passed its peak of securing advantage in Ethiopia. A shift from the developmental state to developmental democracy appears to be underway. Decision‐making and economic policies need to align with this change.