Are Inequality and Trade Liberalization Influences on Growth and Poverty?

There has been a recent resurgence of interest in the relationship between income inequality and growth, manifested in a number of important publications. In parallel with this, concern with the impact of economic reform and globalization on developing countries has led to an upsurge of interest in linkages between policy reform, growth, inequality and poverty. They use the WIDER/UNDP World Income Inequality Database to investigate the links between growth, inequality and trade liberalization for a sample of developing countries, and the more limited World Bank Global Poverty Monitoring Database for an exploratory analysis of the influence of these variables on levels of poverty. The cross-section results suggest that in the long-run, higher inequality is associated with lower growth. [DiscussionPaperNo.2001/132]