Inequality, redistribution, and growth: new evidence on the trade-off between equality and efficiency

Woo, Jaejoon

doi:10.1007/s00181-019-01815-0

Cited by 13 publications

(7 citation statements)

References 74 publications

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“…Balcilar et al (2021) reach a rather frequently occuring result concerning this issue in the sense that they estimate that up to a certain level income inequality may have a positive impact on economic growth, while beyond this level it has a negative impact on future development. Woo (2020) shows that a positive effect of lower income inequality on long-term economic growth may be more than offset by a negative effect caused by redistributive fiscal policy employed to reach lower levels of income inequality. He shows that the final results depend on the initial levels of income inequality and the magnitude of fiscal intervention.…”

Section: Resultsmentioning

confidence: 99%

The Asymmetric Impacts of Fiscal Consolidation on Poverty and Social Exclusion: Regional Perspective

Pošta¹

2022

REGION

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The presented paper contributes to the current state of discussion about the effects of fiscal policy on economic activity in three key points. It focuses on the effects of fiscal policy on poverty and social exclusion instead of on broad measures of economic performance, the analysis is performed on the regional level of some EU national economies and it focuses on possible asymmetric impacts according to the level of the economic performance of the regions regarding the national levels. The results show that fiscal restrictions, both expenditure and income-oriented, have significant negative impacts on both poverty and social exclusion. Especially as far as social exclusion is concerned the impacts on the already underperforming regions seem to be even more profound. When poverty is considered as a measure of inequality instead of social exclusion then revenue-oriented fiscal restrictions seem relatively more harmful than expenditure-oriented fiscal consolidations as far as the underperforming regions are concerned.

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Section: Resultsmentioning

confidence: 99%

The Asymmetric Impacts of Fiscal Consolidation on Poverty and Social Exclusion: Regional Perspective

Pošta¹

2022

REGION

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“…Using a panel data of 21 high-income organisation for economic co-operation and development (OECD) countries during the period 1972-2006, Munielo-Gallo and Roca-Sagal es (2013 found that distributive expenditures and direct taxes produced significant reductions in economic growth, reflecting the standard efficiency-equity trade-off associated to certain fiscal policy measures. More recently, using data for 130 countries over the period 1965-2010, Woo (2020 presented evidence that redistribution involved a nontrivial trade-off between equity and long-term growth, which varied with the initial level of market income inequality and the size of redistribution itself.…”

Section: Literature Reviewmentioning

confidence: 99%

Inequality and redistribution: evidence from Scandinavian and Mediterranean countries

Claveria,

Sorić

2023

AEA

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Purpose The purpose of this paper is to investigate the adjustment of government redistributive policies in Scandinavian and Mediterranean countries following changes in income inequality over the period 1980–2021. Design/methodology/approach The authors first modelled the time-varying dynamics between income inequality and redistribution and then used a non-linear framework to test for the existence of asymmetries and cointegration in their long-run relationship. The authors used two complementary measures of inequality – the share of total income accruing to top percentile income holders and the ratio of the share of total income accruing to top decile income holders divided by that accumulated by the bottom 50% – and computed redistribution as the difference between the two inequality indicators before and after taxes and transfers. Findings The authors found that the sign of the relationship between income inequality and redistribution is mostly positive and time-varying. Overall, the authors also found evidence that the impact of increases in inequality on redistributive measures is higher than that of decreases. Finally, the authors obtained a significant long-run relationship between both variables in all countries except Denmark and Spain. These results hold for both Scandinavian and Mediterranean countries. Originality/value To the best of the authors’ knowledge, this is the first paper to account for the potential existence of non-linearities and to examine the asymmetries in the adjustment of redistributive policies to increases in income inequality using alternative income inequality metrics.

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“…Traditionally, the economic perspective supports the view that “efficiency” refers narrowly to market efficiency. However, any loss of efficiency in an economic system occurs following increases in equality and equity (Earl-Slater, 1999; Woo, 2020). Despite efficiency is subjective in nature, it is well documented in welfare economics literature (Leeson, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…maximizing the total benefit) and fairness (i.e. dividing resources equally) (Colby et al , 2015; Woo, 2020). Public hospitals are organizations under the authority of central governments and serving a wider area of health services (Schneider et al , 2020).…”

Section: Introductionmentioning

confidence: 99%

Exploring the nexus of equality and efficiency in healthcare

Çınaroğlu

2022

IJPPM

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PurposeThis study aims to explore the nexus of equality and efficiency by considering public hospitals' development dynamics, capacity and technology indicators.Design/methodology/approachData was collected from the Ministry of Health Public Hospital Almanacs from 2014 to 2017. The Gini index (GI) is used to estimate the inequality of distribution of hospital performance indicators. A bias-corrected efficiency analysis is calculated to obtain efficiency scores of public hospitals for the year 2017. A path analysis is then constructed to better identify patterns of causation among a set of development, equality and efficiency variables.FindingsA redefined path model highlights that development dynamics, equality and efficiency are causally related and health technology (path coefficient = 0.57; t = 19.07; p < 0.01) and health services utilization (path coefficient = 0.24; t = 8; p < 0.01) effects public hospital efficiency. The final path model fit well (X2/df = 50.99/8 = 6; RMSEA = 0.089; NFI = 0.95; CFI = 0.96; GFI = 0.98; AGFI = 0.94). Study findings indicate high inequalities in distribution of health technologies (GI > 0.85), number of surgical operations (GI > 0.70) and number of inpatients (GI > 0.60) among public hospitals for the years 2014–2017.Originality/valueStudy results highlight that, hospital managers should prioritize equal distribution of health technology and health services utilization indicators to better orchestrate equity-efficiency trade-off in their operations.

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Inequality, redistribution, and growth: new evidence on the trade-off between equality and efficiency

Cited by 13 publications

References 74 publications

The Asymmetric Impacts of Fiscal Consolidation on Poverty and Social Exclusion: Regional Perspective

The Asymmetric Impacts of Fiscal Consolidation on Poverty and Social Exclusion: Regional Perspective

Inequality and redistribution: evidence from Scandinavian and Mediterranean countries

Exploring the nexus of equality and efficiency in healthcare

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