Income Distribution From Outward-Looking Development Policies

Income distribution has become a central concern in developing market economies, now that breakthroughs are being achieved in expanding output. Severe inequalities in the distribution of the benefits of development are practically universal and appear to be growing.1 Will these inequalities be reduced or cured by the outward-looking policies now being recommended to developing countries ? This paper analyses these policies and arrives at a generally negative answer. In most developing countries, inequalities cannot be expected to cure themselves under outward-looking policies, no matter how desirable these policies may be for other reasons.* Inequalities may even increase unless major efforts are made to redistribute income. The paper starts with a brief description of the policies now being recommended. There follow sections dealing with inequality-producing influences associated with this development strategy. These influences are discussed under the following headings: