Spatial
Inequality and Development
Overview of
UNU-WIDER Project
Ravi Kanbur and Anthony J. Venables -
September, 2005
The UNU-Wider project on ‘Spatial disparities in development’, directed
by Ravi Kanbur and Anthony J. Venables, has analyzed evidence on the
extent of spatial inequalities in over 50 developing countries. The
peer reviewed papers published under the auspices of the project find
that spatial inequalities are high, with disparities between rural and
urban areas, and also between geographically advantaged and
disadvantaged regions. In many countries such disparities are
increasing, partly as a consequence of the uneven impact of trade
openness and globalization. While there are efficiency gains from the
concentration of economic activity in urban centers and in coastal
districts, the associated regional inequalities are a major contributor
to overall inequality. They are particularly worrying if they align
with political or ethnic divisions. The broad outline of appropriate
policy for managing high and rising spatial disparities is also clear.
The case for policy interventions to ensure a more spatially equitable
allocation of infrastructure and public services, and for policies to
ensure freer migration, has been made powerfully in the papers in this
project.
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SPATIAL INEQUALITY IN CHINA
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Fifty years of regional
inequality in China: a journey through central planning, reform and
openness
Ravi Kanbur and Xiaobo Zhang
August 2004
This paper constructs and analyses a long-run time-series for regional
inequality in
China from the Communist Revolution to the present. There have been
three peaks of
inequality in the last fifty years, coinciding with the Great Famine of
the late 1950s, the
Cultural Revolution of the late 1960s and 1970s, and finally the period
of openness and
global integration in the late 1990s. Econometric analysis establishes
that regional
inequality is explained in the different phases by three key policy
variables; the ratio of
heavy industry to gross output value, the degree of decentralization,
and the degree of
openness.
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Divergent Means and
Convergent Inequality of Incomes among the Provinces and Cities of
Urban China
John Knight, Shi Li and Renwei Zhao
August 2004
Two precisely comparable national household surveys relating to 1988
and 1995 are
used to analyse changes in the inequality of income in urban China.
Over those seven
years province mean income per capita grew rapidly but diverged across
provinces,
whereas intra-province income inequality grew rapidly but converged
across provinces.
The reasons for these trends are explored by means of various forms of
decomposition
analysis. Comparisons are also made between the coastal provinces and
the inland
provinces. The decompositions show the central role of wages, and
within wages profitrelated
bonuses, together with the immobility of labour across provinces, in
explaining
mean income divergence. The timing of economic reforms helps to explain
the
convergence of intra-province income inequality. Policy conclusions are
drawn.
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Income Inequality in Rural China:
Regression-based Decomposition Using Household Data
Guanghua Wan and Zhangyue Zhou
August 2004
A considerable literature exists on the measurement of income
inequality in China and
its increasing trend. Much less is known, however, about the driving
forces of this trend
and their quantitative contributions. Conventional decompositions, by
factor
components or by population subgroups, only provide limited information
on the
determinants of income inequality. This paper represents an early
attempt to apply the
regression-based decomposition framework to the study of inequality
accounting in
rural China, using household level data. It is found that geography has
been the
dominant factor but is becoming less important in explaining total
inequality. Capital
input emerges as a most significant determinant of income inequality.
Farming structure
is more important than labour and other inputs in contributing to
income inequality
across households.
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Externalities in Rural Development: Evidence
for China
Martin Ravallion - July 2003
The paper tests for external effects of local economic activity on
consumption and income
growth at the farm household level using panel data from four provinces
of post-reform
rural China. The tests allow for nonstationary fixed effects in the
consumption growth
process. Evidence is found of geographic externalities, stemming from
spillover effects of
the level and composition of local economic activity and private
returns to local human and
physical infrastructure endowments. The results suggest an explanation
for rural
underdevelopment arising from underinvestment in certain
externality-generating
activities, of which agricultural development emerges as the most
important.
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| INEQUALITY AND
CONFLICT |
Spatial-horizontal
inequality and the Maoist insurgency in Nepal
Mansoob
Murshed and Scott Gates
July 2004
The Maoist insurgency in Nepal is one of the highest intensity internal
conflicts in
recent times. Investigation into the causes of the conflict would
suggest that grievance
rather than greed is the main motivating force. The concept of
horizontal or inter-group
inequality, with both an ethnic and caste dimension, is highly relevant
in explaining the
Nepalese civil war. There is also a spatial aspect to the conflict,
which is most intense in
the most disadvantaged areas in terms of human development indicators
and land
holdings. Using the intensity of conflict (fatalities) as the dependent
variable and HDI
indicators and landlessness as explanatory variables, we find that the
intensity of
conflict across the districts of Nepal is significantly explained by
the degree of
inequalities.
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Aspiration to
inequality: regional disparity and centre-regional conflicts in
Indonesia
Mohammad Tadjoeddin, Widjajanti Suharyo and Satish Mishra
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| POVERTY
AND INEQUALITY IN INDIA |
What has luck got to do
with it? A regional analysis of poverty and agricultural growth in India
Richard
Palmer-Jones and Kunal
Sen
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Decomposing Spatial
Differences in Poverty in India
Shatakshee Dhongde
August 2004
Over the last decade, India has been one of the fastest growing
economies, and has
experienced considerable decline in overall income poverty. However, in
a vast country
like India, poverty levels vary significantly across the different
states. In this paper, we
analyze the differences between poverty at the state and national
level, separately for the
rural and urban sector, in the year 1999-2000. Instead of following the
usual practice of
decomposing the changes in poverty over time, we decompose the changes
in poverty
across regions. Such decomposition reveals that differences in state
and national poverty
levels were largely explained by differences in the state and national
mean income
levels. Differences in the state and national distributions of income
were less important
in explaining spatial differences in poverty. An important policy
implication of our
results is that states with extremely high levels of poverty would have
reduced...
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Unequal fiscal
capacities across Indian states: how corrective is the fiscal transfer
mechanism?
Pinaki Chakraborty
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| POVERTY IN ASIA |
Commune-level estimation
of poverty measures and its application in Cambodia
Tomoki Fujii
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Poverty mapping with
aggregate census data: what is the loss in precision
Nicholas Minot and Bob Baulch
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| LOCATION
AND MIGRATION |
The Industrial Location
in Post-Reform India:Patterns of Inter-regional Divergence and
Intra-regional Convergence
Sanjoy Chakravorty - 2003
Where do new industrial investments locate, and what factors drive
the industrial location decisions? Do these investments follow the
model of ‘divergence followed by convergence’ suggested by the
cumulative causation, agglomeration economies, and transportcosts
approaches? These questions are examined with district-level
data from India for the pre- and post-reform periods using: first,
tables and maps of concentration and clustering, aggregated for
all industry and disaggregated into five sectors (Heavy Industries,
Chemicals and Petroleum, Textiles, Agribusiness, and Utilities),
and second, logistic and OLS/Heckman selection regression
models for these six elements. The data provide solid evidence both
of inter-regional divergence and intra-regional convergence, and
suggest that ‘concentrated decentralisation’ is the appropriate
framework for understanding industrial location in post-reform
India.
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China's
telecommunications universal service in a competitive environment
Mingzhi Li and Liangshu Qi
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The effects of migration
on interregional differentials in consumer behaviour:evidence from the
Baise district, Guangxi
Chen Zhao, Lu Ming and Pan Hui
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| TRADE AND
INEQUALITY |
International Trade, Location and Wage
Inequality in China
Songhua Lin - September 2003
Models of economic geography predict that transportation costs directly
affect demand
for goods and the supply of intermediate inputs. One of the reasons
that international
trade is concentrated in the coastal provinces of China is that they
have lower
transportation costs in transporting goods to other countries than do
provinces in the
interior. This paper examines the relationship between the provincial
wage rate and each
province’s access to international markets, and to suppliers of
intermediate inputs. A
gravity equation is first estimated to construct these ‘market access’
and ‘supplier
access’ variables. In the second stage, the effect of market access and
supplier access on
the wage rate is estimated. It is found that about one quarter of the
provincial wage
differences in the coastal provinces and 15 per cent of the wage
differences in the
interior provinces can be explained by these economic geography
variables.
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Trade Liberalisation and
Spatial Inequality: Methodological Innovations in Vietnamese Perspective
Henning Jensen and Finn Tarp
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Regional disparity and
economic growth in China The impact of labor market distortions
Fang Cai, Dewen Wang and Yang Du
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| SPATIAL
INEQUALITY IN ASIA |
Is spatial inequality
increasing in the Philippines?
Arsenio Balisacan and Nobuhiko
Fuwa
February 28, 2003
The Philippines has been long known for its high level of inequality in
income and
wealth distribution. A widely held view on the inequality in the
Philippines is that
development policy has favored the island of Luzon and discriminated
against peripheral
islands (provinces) of Visayas and (especially) Mindanao. Moreover, the
poor performance of
the Philippine economy over the last three decades has been attributed
partly to the relatively
large variation in access to infrastructure and social services between
the major urban centers
and rural areas. Spatial
variation in certain summary measures of human development is also
evident (UNDP 1996,
2000).
If indeed spatial income disparities are at the core of the poverty and
inequality
problem in the Philippines, then policy reforms aimed at reducing these
disparities have to be
central elements of the country's poverty reduction program. This may
also promote...
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Bangalore: Divided City
under the Impact of Globalization
Christoph Dittrich
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| SPATIAL
INEQUALITY IN FSU |
Regional dimensions of
poverty in Russia. Is it geography or economics that matter?
Stanislav Kolenikov and Tony Shorrocks
July 10, 2001
This paper analyses poverty in the regions of Russia from the point of
view of
economic, social, and demographic factors distinguishing each of the
regions. A (nonlinear)
regression model is proposed for the poverty indicators that links the
latter to
the above factors via mean income and inequality taken as the
\fundamental" variables
characterizing income distribution as a whole. The application of a
novel method
of factor decomposition, Shapley-Owen-Shorrocks technique, as well as a
number of
regression diagnostic tools, is demonstrated.
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Spatial inequality and
development in Central Asia
Kathryn Anderson and Richard Pomfret
June 2004
This paper focuses on inequality in living standards across oblasts and
regions within
Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and
Uzbekistan. Regional
inequality is an important area of research and policy development.
Inequality in
income and consumption are logical outcomes in a market-based economic
system. If
inequality within countries exists because of barriers to competition,
then inequality can
foment internal tension, and economic and social development within
countries is
negatively affected. We examine Living Standards Measurement data from
Tajikistan,
Kyrgystan, and Kazakhstan and additional survey data from Uzbekistan.
We find that
the most important explanations for the variation in expenditures per
capita in the region
are household location, household composition, and education. We find
large variation
in per capita expenditure by location within each country, and the
differences go beyond
the simple rural-urban distinction. Family structure is also important,
and in all...
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WIDER Project on Spatial Disparities in Human
Development
Papers
selected for the conference will be considered for a special issue of a
leading English language Asian journal, to be edited by Ravi
Kanbur (Cornell
University), Tony Venables (London School of Economics) and Guanghua
Wan (WIDER).
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From WIDER
Spatial Disparities in Human
Development
Project name/title: Spatial Disparities in Human Development
Year: 2002
Theme: Poverty, Inequality and Well-being
Abstract: Many developing and transition countries have considerable
regional variation in average household income, poverty, and in health
and educational status. National human development indicators can
therefore mislead policy-makers when large regional disparities exist.
This project will investigate the size and determinants of regional
disparities in a representative selection of countries. It will use
indicators such as poverty incidence and depth, within-region income
inequality, human development, and gender indicators to better
understand why some regions fall behind in the development process.
Director:Guanghua
Wan Senior Research Fellow
Ravi
Kanbur Project co-director
Anthony
J. Venables Project co-director
Assistant:Lorraine
Telfer-Taivainen Secretary to
the Director
Project Meetings:
29
May 2003 Project meeting on Spatial Inequality and
Development
Conferences:
28
March 2003 WIDER Conference on Spatial Inequality in Asia
1
November 2002 WIDER Conference on Spatial Inequality in Latin
America
21
September 2002 WIDER Conference on Spatial Inequality in
Africa
28
June 2002 Cornell - LSE - WIDER Development Conference on
Spatial Inequality and Development
Publications: |
Adverse Geography and Differences in Welfare
in Peru
Javier Escobal and Máximo Torero
October 2003
In Peru, a country with an astonishing variety of different ecological
areas, with 84
different climate zones and landscapes, with rainforests, high mountain
ranges and dry
deserts, the geographical context may not be all that matters, but it
could be very
significant in explaining regional variations in income and poverty.
The major question
this paper tries to answer is: what role do geographic variables, both
natural and manmade,
play in explaining per capita expenditure differentials across regions
within Peru?
How have these influences changed over time, through what channels have
they been
transmitted, and has access to private and public assets compensated
for the effects of
an adverse geography?
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An Inquiry into Cities and Their Role in
Subnational Economic Growth in South Africa
W.A. Naudé and W.F. Krugell - 2003
South Africa is characterised by significant inequality in spatial
economic activity. Whether future growth and development on a
sub-national level in South Africa will be such as to reduce this
inequality may depend on the economic growth and development of South
Africa's largest cities. Our local economic growth empirics show some
indications of conditional convergence in output between poorer towns,
as well as overall between all cities and towns. Between 1990 and 2000
some limited sigma convergence was found, but this was driven by
declines in the standard deviation of per capita income amongst the
poorest quintile of towns. An estimate of conditional beta convergence
of 1.2% over the period 1990 to 2000 confirms that overall convergence
has been taking place. From an estimation of the determinants of
economic growth on a local level, using a dataset on 353 local areas in
South Africa between 1990 and 2000, we found the most significant
determinants to be stocks of human capital and distance from harbours
and markets. Human capital's effect on economic growth was strongly
associated with the presence of large cities, as one would predict from
endogenous growth theory.
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Microsimulation, CGE and Macro
Modelling for Transition
and Developing Economies
James B. Davies - June 2004
Alternative approaches to modelling distributional and welfare effects
of changes in
policy and the economic environment in developing and transition
countries are
surveyed. Microsimulations range from pure accounting approaches to
models with
behavioural equations based on econometric estimates and various
dynamic models.
Microsimulation accounting models are key to analysing the impact
effects of tax and
benefit changes and are becoming widespread. Computable general
equilibrium (CGE)
modelling endogenizes price changes and changes in industry and labour
market
structure. An essential CGE input is a social accounting matrix (SAM),
which can be
used to do simple multiplier analyses. A wide range of macroeconomic
models have
also been used in developing countries, endogenizing variables like
interest rates and
exchange rates.
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Are Neighbours Equal? Estimating Local
Inequality in Three Developing Countries
Chris Elbers, Peter Lanjouw,
Johan Mistiaen, Berk Özler
and Ken Simler
July 2003
Based on a statistical procedure that combines household survey data
with population
census data, this paper presents estimates of inequality for three
developing countries ( Ecuador, Madagascar and Mozambique )
at a level of disaggregation far below that allowed by household
surveys alone. We show that
while the share of within-community inequality in overall inequality is
high, this does not
necessarily imply that all communities in a given country are as
unequal as the country as a
whole. In fact, in all three countries there is considerable variation
in inequality across
communities. We also show that economic inequality is strongly
correlated with
geography, even after controlling for basic demographic and economic
conditions.
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Changes in Spatial Income Inequality in the
Philippines: An Exploratory Analysis
Arsenio M. Balisacan and Nobuhiko Fuwa
May 2004
The purpose of this paper is to establish some basic facts about income
inequality in the
Philippines, with a special focus on the importance of spatial income
inequality. Despite
major fluctuations in macroeconomic performances, income inequality
remained
relatively stable during the years 1985-2000. Spatial inequality
accounts for a sizable
but not overwhelming portion of the national-level income inequality,
and the relative
importance of spatial inequality was declining over time. We also find
that mean
income levels across provinces were converging at a much faster rate
than those
observed in currently developed countries.
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Convergence Club Empirics: Some Dynamics and
Explanations of Unequal
Growth across Indian States
Sanghamitra Bandyopadhyay - November 2003
This paper documents the convergence of incomes across Indian states
over the period
1965 to 1998. It departs from traditional analyses of convergence by
tracking the
evolution of the entire income distribution, instead of standard
regression and time
series analyses. The findings reveal twin-peaks dynamics—the existence
of two income
convergence clubs, one at 50 per cent, another at 125 per cent of the
national average
income. Income disparities across states seem to have declined over the
1960s, only to
increase over the subsequent three decades. The observed polarization
is strongly
explained by the disparate distribution of infrastructure, and that of
education, and to an
extent by a number of macroeconomic indicators; that of capital
expenditure and fiscal
deficits.
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Crime,
Isolation, and Law Enforcement
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A
Decomposition Analysis of Regional Poverty in Russia
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Economic Polarization Through
Trade: Trade Liberalization and Regional Growth in Mexico
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How
Responsive is Poverty to Growth? A Regional Analysis of Poverty,
Inequality, and Growth in Indonesia, 1984-99
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Industrial Location and Spatial Inequality:
Theory and Evidence from India
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Longevity
in Russia's Regions: Do Poverty and Low Public Health Spending Kill?
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Love Thy Neighbour? Evidence
from Ethnic Discrimination in Information Sharing within Villages
Mattia Romani - 2003
CSAE, University of Oxford
There is increasing evidence to suggest that a fundamental source of
information for farmers on how to access and use new agricultural
technologies comes from interacting with their neighbours. Economic
research on adoption of innovations in a rural context has only
partially addressed the issue of how the social structure of a village
can affect adoption and the final impact on productivity of farmers.
This paper investigates the role of proximity interpreted not only in
geographical terms but also along the line of ethnic similarities among
neighbours (what we define as ‘social proximity’). We use a panel
dataset collected in Côte d'Ivoire to define the probability of
accessing the knowledge network. The main results indicate that farmers
from ethnic minorities are less likely to access, and benefit less
from, extension services. However, they seem to try to re-equalise
their condition by putting more effort than dominant ethnic group
neighbours in sharing information among themselves.
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Human Well-being:
Concepts and Conceptualizations
Des Gasper - April 2004
Economic measures of income have ignored large areas of human
well-being and are
poor measures of well-being in the areas to which they attend. Despite
increased
recognition of those distortions, ‘GNP per capita continues to be
regarded as the
quintessential indicator of a country’s living standard’ (Partha
Dasgupta). Well-being
seems to have intuitive plausibility as a concept, but in practice we
encounter a
bewilderingly diverse family of concepts and approaches, partly
reflecting different
contexts, purposes, and foci of attention. Is there a unifying
framework that yet respects
the complexity and diversity of well-being? This paper presents an
imperfect
comparative and integrative framework that builds on the contributions
by Sen and
others. We move toward the framework gradually, since well-being
concepts are in fact
complex entitities which reflect pictures of personhood and of science.
Insight grows
through surveying a wide range of relevant experience and views, before
risking
blinkering one’s vision in a framework. The paper then uses the
framework to examine
conceptualizations of human well-being, by Dasgupta, Sen, Nussbaum,
Doyal and
Gough, and Alkire.
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Conceptual and Measurement Issues
in Poverty Analysis
Erik Thorbecke
February 2004
The objective of this paper is to review a number of issues related to
poverty, while
taking stock of the ongoing research. Most of the remaining unresolved
issues in
poverty analysis are related directly or indirectly to the dynamics of
poverty. Before the
development community can become more successful in designing and
implementing
poverty-alleviation strategies, within the context of growth, we need
to understand
better the conditions under which some households remain permanently
(chronically)
poor and how others move in and out of poverty. In what follows we
review the state of
the art under a number of interrelated headings: (1) Chronic vs.
transient poverty;
(2) Poverty and vulnerability; (3) The determination of the poverty
line across time and
countries; (4) The quantitative vs. qualitative approach to poverty
measurement; and
(5) Growth, inequality and poverty.
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Spatial Inequality for
Manufacturing Wages in Five African Countries
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