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A Welfare Economic Approach to Growth and Distribution in the Dual Economy

File(s)
Fields89_A_welfare_economic_approach.pdf (774.92 KB)
Permanent Link(s)
https://hdl.handle.net/1813/74981
Collections
ILR Articles and Chapters
Faculty Publications - International and Comparative Labor
Author
Fields, Gary S.
Abstract

Excerpt] This paper presents a welfare economic analysis of the distributional consequences of growth, a problem that has attracted much attention from development economists of late. We shall explore the similarities and differences between the absolute income and poverty and relative inequality approaches for a general dualistic development model and for three stylized special cases. It will be shown that these approaches are not always in agreement and, more disturbingly, that the most notable discrepancy is found in the most relevant stylized model—growth via the transfer of population from a backward to an enlarging advanced sector. The fact of these discrepancies raises the important question of how to measure changing income distribution in a manner consistent with the judgments we wish to make about the alleviation of absolute poverty and changes in relative income inequality. A general welfare function is formulated to address these issues. Recent controversies over who received the benefits of growth in two less developed countries—Brazil and India—are examined in these terms.

Date Issued
1979-01-01
Keywords
dual economy
•
income growth
•
income distribution
•
welfare economic analysis
•
poverty
Related DOI
https://doi.org/10.2307/1883162
Rights
Required Publisher Statement: © Oxford University Press. Final version published as: Fields, G. S. (1979). A welfare economic approach to growth and distribution in the dual economy. Quarterly Journal of Economics, 93(3), 325-353. doi: 10.2307/1883162 Reprinted with permission. All rights reserved.
Type
article

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