Social & Economic Inequalities

By : Anna Dziubinska (Unsplash)


Present day partisanship and the legacy of structural inequality has helped fuel the spread of COVID-19 in Native nations

The pandemic has had a disproportionate impact on Native nations in the US with COVID-19 rates 350 percent higher among Native Americans compared to whites. In new research Raymond Foxworth, Laura E. Evans, Gabriel R. Sanchez, Cheryl Ellenwood, and Carmela M. Roybal contextualize the history of colonization and policy neglect by federal and state governments to explain the unequal impact of the pandemic. They find that this disparity is related to a lack of basic infrastructure like safe running water, a shortage of health information available in Native languages, and the high rate of non-tribal members visiting tribal lands during the pandemic. State-level partisanship also plays an important role; Republican dominated states were less likely to implement pandemic mitigation policies such as mask mandates, which in turn has put Native American lives in danger.

The first large-scale COVID-19 outbreak in a Native American community originated from a large church gathering around March 7, 2020 in the small community of Chilchinbeto, Arizona on the Navajo Nation. Like many other Native nations across the US, the Navajo Nation responded to the COVID-19 outbreak by issuing a state of emergency and closing tribal offices and businesses in an effort to stop the spread of COVID-19. By spring 2020, new cases of the coronavirus began to emerge in other Native nations across the US, and by August 2020, the US Centre for Disease Control and Prevention  (CDC) reported that Native Americans had 3.5 more COVID-19 cases than White Americans and hospitalization rates five times that of White Americans.

To understand the disproportionate impact of the pandemic on Native communities, our research contextualizes the history of colonization and policy neglect by federal and state governments to show the compounding effects of COVID-19 on Native peoples. Our work provides insight into the structural and partisan causes of COVID-19 spread across Native communities during the early days of the COVID-19 pandemic in 2020. 


Understanding Native Nations in the US

There are 6.9 million American Indians and Alaska Natives in the US and 574 federally recognized Native nations. Native nations are sovereign governments that vary in size, geographic location, economies, and government structure. Likewise, all Native nations vary by culture, language, and religion. Tribal homelands once spanned across all 50 states. Today Native nations have landholdings in 34 states, encompassing 56.2 million acres held in trust by the US government and another 43 million acres in Alaska under the Alaska Native Land Claim Settlement Act. As sovereign nations, Native nations have distinct relationships with other American governments. The federal government is legally defined as a trustee of Native nations and has a responsibility to provide social services, healthcare, education, public safety, and land, while recognizing inherent sovereignty of Native nations.

But the federal government has failed to fulfill its trust responsibilities jeopardizing the health and well-being of Indigenous people across the North American continent. Consequently, Native Americans are disproportionately affected by high rates of poverty, unemployment, and health disparities resulting from centuries of harmful federal and state policies. Structural inequities like poor infrastructure, food insecurity, a lack of internet access, trauma, and health interventions not adapted to local context are well documented and continue to effect Native nations today. 


A history of colonialism and epidemics for Native Americans
The coronavirus is a repeat of prior disease outbreaks on tribal lands. In fact, colonization is the largest health epidemic that has led to the greatest loss of Indigenous life across the Americas. For example, 90 percent of Indigenous life was lost across the Americas during the first century of European contact and death was incited by disease, starvation, and extreme poverty. Native American communities have also been disproportionately affected during more traditionally defined health epidemics. During the influenza outbreak of 1918–1919, nearly 25 percent of Native Americans caught the flu and were four times more likely to die from it compared to those living in urban areas. Similarly, in 1993, the first victims of the hantavirus outbreak in the southwestern United States were Navajo. Reflecting the racialization of health inequalities facing tribes, news agencies’ stoked fears of the unknown virus, commonly referring to it as the “Navajo flu.” During the 2009 H1N1 outbreak, American Indian and Alaska Natives’ death rates were four times greater than all other racial and ethnic groups combined in states with high Native populations. 


Structural Inequalities and Partisanship Impact the Spread of COVID-19 in Native Nations 
We used data from a variety of sources to examine the Native American community-level and state-contextual factors associated with the spread of COVID-19 in Native communities in the continuous US. We find that measures of political and policy marginalization, including the absence of household plumbing and access to culturally relevant public health information helped fuel the spread of COVID-19 in Native nations. Our findings accord with existing scholarship on Native and health politics in the US federalist system more broadly. Native American health outcomes are shaped by multiple layers of inequality.

Adequate access to household water remains a significant challenge for many Native nations. A lack of basic infrastructure makes it difficult to deliver both running water and safe and clean groundwater. 13 percent of Native American households in Native nations lack safe water and many others lack solid waste disposal and sewers.

A shortage of health information available in Native languages adds another layer. The lack of lifesaving information about the severity of COVID-19’s health threats, as well as best practices to reduce the spread of the virus and manage infections but English only dissemination produce language barriers. A large segment of the US population who speak a language other than English at home includes Native people who speak over 169 Indigenous languages. Over 25 percent of Native people report speaking a Native language.

Our research also identifies that the high rate of non-tribal members visiting tribal lands during the pandemic endangered the health and safety of tribal people on their homelands. As Katherine Florey of UC Davis has documented, COVID-19 has exposed the consequences of longstanding federal limits on tribal governments’ ability to regulate non-tribal members when they endanger health and safety on tribal lands.

Beyond community factors, we find that state-level partisanship is associated with COVID-19 spread in Native nations: Native nations in Republican states experience higher COVID-19 infection rates, as do states with higher ratios of Trump voters in their borders. Policy differences based on partisanship at the state and local level are well established. For example, as of early August 2020, 32 US states required face coverings statewide: 24 were led by Democratic governors who have issued a mask mandate and only eight states run by Republicans implemented a mask mandate. Furthermore, Democratic states were quicker to implement mask wearing policies, with half of the Democratic-led states having mandates in place by March 2020. Former President Trump consistently downplayed the dangers of COVID-19, disparaged public health policies that can reduce the spread of the disease, and pressured Republican governors to avoid utilizing their powers to protect public health. Combined, we find that these behaviors endangered Native American lives and furthered the spread of the virus. 


More investment in infrastructure and healthcare in Native Nations is needed
A number of policy recommendations emerge from our research. There must be greater prioritization and investment in infrastructure on tribal lands (i.e., safe drinking water, quality housing, electricity, broadband) by the federal government. This has been a consistent call by bipartisan federal commissions. Greater investment must also be made in growing the healthcare capacity of Native nations including investment in greater quality access, culturally relevant healthcare practices, capacity to respond to health crises and increasing tribal stockpiles for lifesaving equipment and personal protective equipment. The right to quality healthcare is a treaty right of Native nations and the federal government must honor these treaties and their relationship with Native nations in the US. Finally, both federal and state governments, as well as American citizens, must recognize the inherent sovereign rights of Native nations and respect their policy decisions passed to protect their tribal citizens.


This article is based on the paper, ‘“I Hope to Hell Nothing Goes Back to The Way It Was Before”: COVID-19, Marginalization, and Native Nations’ in Perspectives on Politics.


By                             :              Raymond Foxworth – First Nations Development Institute

                                                 Laura E. Evans – University of Washington

                                                 Gabriel R. Sanchez – University of New Mexico

                                                 Cheryl EllenwoodWashington State University

                                                 Carmela M. Roybal  University of New Mexico


Date                          :               July 7, 2021

Source                      :               LSE Phelan US Centre


The Simple Rules of Wealth Inequality

The rich won’t be paying their fair share of taxes as long as our tax system speeds wealth’s concentration.

A  great deal of confusion surrounds America’s extreme inequality, what causes this inequality, and how we can check and then reverse it.

That needn’t be. Ultimately, economic inequality comes down to the concentration of wealth at the top, and we can explain the dynamics of that concentration in a few simple rules — and one not so simple, but understandable, computation.


Rule One: For those at the top, every tax is a wealth tax.

In America, we have many types of taxes. We have income taxes, sales taxes, excise taxes, property taxes, and estate taxes. For most of us, how we’re taxed matters. Sales taxes impact our spending decisions. Income taxes impact how hard we work, how much we save, and when we retire.

For those at the top, the type of tax doesn’t matter so much. From the perspective of the wealthy, every tax amounts to a wealth tax. Why should that be the case? Income, sales, and other existing taxes don’t particularly influence the spending decisions the wealthy make or such mundane judgments — to them — as how many hours they work, when they may be able to retire, or whether they need the additional income from a spouse’s job.

Our existing taxes only impact the wealth of our ultra-wealthy. Tax payments, to be more specific, only determine how fast or how slow the wealth of the wealthy grows.


Rule Two: Wealth concentrates at the top when we have insufficiently taxed wealth.

Thomas Piketty’s best-selling book, Capital in the Twenty-First Century, has one core takeaway, the simple notion that the wealth of those at the top will grow at a rate faster than the rate of growth for a nation’s overall wealth, unless taxes on the wealthy reach a sufficiently high level.

The reason? The super-wealthy have built-in advantages over the rest of us when it comes to growing wealth. They hire professionals to manage their investments. They have the financial wherewithal to make high-yielding investments — provide the seed money for a promising start-up, for instance — that the rest of us don’t have the resources to make. And the living expenses of the ultra-wealthy consume only a tiny portion of their wealth compared to the rest of us.

Only stiff taxation on the rich can level the wealth accumulation playing field.


Rule Three: Wealth doesn’t concentrate when the rich pay their fair share of taxes.

Politicians and pundits often tell us that the rich must pay their fair share of tax. Nobody disputes that point. The dispute centers on how we define “fair share.”

Let’s start our defining here: Society suffers when wealth continually concentrates at the top. If the rich are increasing their wealth at a rate faster than society at large, the concentration will continue. Inequality will become more extreme, to the detriment of most all members of that society.

So when are the rich paying their fair share in tax? They’re paying that fair share when wealth is no longer concentrating at the top. Over the past four decades, unfortunately, American tax policy has offered a shining example of the exact opposite. We’ve had a tax system that has sped the concentration of wealth. Since 1980, our tax policy in the United States has taxed work more and wealth less. As a direct result, taxes on America’s wealthy have declined dramatically.

A recent Institute for Policy Studies briefing paper estimates that billionaire tax payments, as a percentage of their wealth, have dropped by an astounding 79 percent since 1980.

We can, fortunately, measure how tax policy is impacting wealth concentration and, in the process, estimate how far short of “fair share” the taxes rich people pay end up falling.

Suppose the aggregate wealth of a nation doubles over a given period and, during that same period, the wealth of the nation’s topmost group — say the top .01 percent — quadruples. Without knowing anything else, we’d know that the top .01 percent’s share of that nation’s wealth has doubled over that period. Similarly, if the wealth of the nation’s top .01 percent had increased eight-fold while the country’s aggregate wealth merely doubled, we’d know that the wealth share of that nation’s top .01 percent had quadrupled.

That’s roughly what happened in America over the last four decades. In 2018, the wealth of the average American ran about 8.4 times the wealth of the average American in 1980. But the wealth of the average top .01 percenter in 2018 ran 35 times the top .01 percenter average in 1980. Do the division: 35 divided by 8.4 matches up to slightly more than a four-fold increase in the wealth share of the top .01 percent: from 2.3 percent in 1980 to 9.6 percent in 2018.

That’s runaway wealth concentration — and increasingly extreme inequality — in action.

Things didn’t have to work out that way. They would have not worked out that way if we taxed the wealthy more heavily.

Between 1950 and 1980, we did tax the wealthy more heavily. The wealth of the average American in 1980 ran approximately five and a half times the wealth of the average American in 1950. The wealth of the average top .01 percenter in 1980, meanwhile, also ran about five and a half times the wealth of the average top .01 percenter in 1950. The end result: Top .01 percenters had the same share of the nation’s wealth in 1980 as they had in 1950: 2.3 percent.

At that level of wealth concentration, the average top .01 percenter held about 230 times as much wealth as the average American. In dollar terms today, a 2.3 percent wealth share for the top .01 percent would have fewer than 13,000 households sharing over $2.5 trillion in wealth, an average wealth of approximately $200 million per household.

American society found that level of wealth concentration far from ideal, but tolerable. The more than four-fold increase in wealth concentration since 1980, by contrast, has been intolerable.

How did that transformation occur? America’s tax policy changed radically. After three full decades at the “fair share rate”, the tax payments required of America’s wealthiest dropped precipitously. The taxes paid by top .01 percenters, as a percentage of their wealth, dropped more than four percentage points below the fair share rate — the rate that would have prevented American wealth from concentrating at the top.

Put another way, tax policy in America between 1950 and 1980 kept wealth of the average member of the top .01 percent at 230 times the net worth of the average American. Then, changes in tax policy allowed the wealth of America’s average top .01 percenter to increase to 960 times the wealth of the average American.

If we’re ever going to stop — and reverse — America’s extreme inequality, the radical tax policies of the past four decades must change and must change soon.

Phoenix attorney Bob Lord, an Institute for Policy Studies associate fellow, has practiced tax law for most all of the years since 1980.


By                          :                    Bob Lord

Date                       :                    March 11, 2021 

Source                   :                    Inequality.Org



Green infrastructure can limit but not solve air pollution injustice


Outdoor air pollution contributes to millions of deaths worldwide yet air pollution has differential exposures across racial/ethnic groups and socioeconomic status. While green infrastructure has the potential to decrease air pollution and provide other benefits to human health, vegetation alone cannot resolve health disparities related to air pollution injustice. We discuss how unequal access to green infrastructure can limit air quality improvements for marginalized communities and provide strategies to move forward.

Outdoor air pollution is a leading contributor to the environmental burden of disease and linked to over four million deaths worldwide each year1. The World Health Organization (WHO) reports that almost half of cities with more than 100,000 residents, and most (97%) cities in low- and middle-income countries of that size, do not meet WHO air quality guidelines2. From 1960 to 2009, global levels of fine particulate matter increased by 38% leading to a greater health burden from polluted air3. Even in the midst of the current pandemic, evidence of higher COVID-19 deaths among people with pre-existing conditions was linked to elevated air pollution exposure4,5 and/or residing in areas with historically higher levels of air pollution6. Exposure to air pollution, however, is not evenly distributed, especially within cities. Many studies document differential exposure to air pollution by race/ethnicity7,8 and socio-economic status8,9,10 in cities across the world. Neighborhoods segregated by race and class often have less political and economic power, and are often neglected by government institutions such that they receive fewer resources compared to privileged communities11. This predicament results in disproportionate and overlapping exposures to environmental burdens11. Through the years, some approaches to decrease outdoor pollution include regulation of air pollution sources, emission controls on personal vehicles, and—more recently—the expansion of green infrastructure. The expansion of green infrastructure can mitigate urban air pollution to some extent. Yet, urban greening cannot compensate for systemic injustices that lead to disproportionate burdens in environmental health, and therefore, green infrastructure investments need to be balanced with other efforts to ameliorate air pollution injustices.


Green infrastructure for air pollution mitigation
Many cities have explored the potential of green infrastructure to mitigate urban air pollution and studies estimate that the value of this ecosystem service is worth about $3.8 billion dollars in the United States alone12. The definition of green infrastructure varies by discipline and scope. In this article, we focus on the broader role of all urban vegetation that provides ecosystem services via the mitigation of air pollution. For example, roadside green barriers can block the movement of traffic pollution into surrounding communities, mitigating some air pollution exposure and its resulting negative health effects13.

Green infrastructure is one variable that makes up the collective infrastructure that supports city dwellers. While the extent of air pollution removal by green infrastructure can vary14, many researchers note the benefits of green infrastructure to a city’s ambient environment12,15. In some cases, increased tree density and leaf area index are associated with a variety of health benefits including fewer cases of respiratory illness16. The net benefits of green infrastructure, however, should be balanced with their potential to increase pollen and other compounds that contribute to air pollution17. Special attention to tree size, condition, density, and species is also needed to increase a tree’s capacity to provide benefits and decrease disservices14. Although green infrastructure can provide benefits to urban air, urban settings have their own stressors (e.g., compaction, high levels of air pollution) that can impede the ability of green infrastructure to provide ecosystem services. For example, factors such as meteorology, mixture of air pollution, and urban layout can affect the ability of green infrastructure to remove air pollution18. Along with ecosystem services related to air pollution removal, mounting studies document various physical and mental health benefits related to green spaces19,20,21,22,23. Green infrastructure in the form of parks, street trees, and other urban vegetation can also buffer against health disparities for conditions such as obesity, cardiovascular disease, psychological distress, and heat-related illness24.


Unequal access to green infrastructure
While there is ample evidence for health benefits of vegetation, widespread inequities in urban vegetation by race and income25,26 prompt concerns of limited ecosystem services from green infrastructure in marginalized communities around the world. For example, findings of disparate access to green infrastructure are documented in parts of Canada27, South Africa28,29, the United Kingdom30, China31, and Colombia32. Many underlying drivers (e.g., exclusionary practices) that result in unequal exposure to environmental burdens reflect factors that also lead to unequal access to green infrastructure33. Systemic racism prompted practices such as residential segregation in various locations34. Residential segregation can force racial and ethnic populations to be located in areas with limited resources, greater community stressors, and exposure to pollutants that contribute to environmental health disparities35. To illustrate, the report ‘Toxic Waste and Race at Twenty,’ found that race continues to be the most important factor determining hazardous waste facility siting in the U.S36. Also, scholars describe how the legacy of apartheid and segregation negatively influenced the availability and access to urban green infrastructure in South Africa today29. Another example of this was redlining—a discriminatory mortgage appraisal process that began in the 1930s in the U.S36—which has been linked to disparate air pollution exposures34, health disparities37, and inequitable access to green infrastructure36,38. For example, Schell et al.34 describes how redlined neighborhoods have on average twenty-one percent less tree canopy compared to other communities. A study in Baltimore, Maryland observed that patterns of residential segregation contributed to the unequal distribution of green infrastructure and greater presence of stressors such as pollution, flooding, and urban heat islands39. Variations of green infrastructure access can also relate to the type of vegetation, urban form, and methodological approach being explored30. Therefore, unequal access to green infrastructure and its ecosystem services can have various implications in environmental health.


Part of the solution, but not a panacea
Given the range of benefits from green infrastructure, more attention should be directed to sustainably increase the presence of and access to it within vulnerable urban communities. We acknowledge, however, that the strategy to reduce air pollution’s inequitable health impacts should not rest solely on the effectiveness of green infrastructure. Multiple systematic and long-lasting processes of discrimination (e.g., inequitable citing of industrial facilities and high traffic roads33,34,35,36,37,38) have resulted in unequal exposure to air pollution. Therefore, one strategy alone cannot solve the associated problems of inequitable exposure to air pollution. Without addressing these persistent and structural factors, green infrastructure can only taper air pollution injustice, without solving it sustainably.

Similar to other environmental perils, air pollution in disadvantaged communities must be mitigated at the source—through regulating pollution emissions equitably and dismantling systems that lead to disproportionate exposures in the first place. Improving management strategies also applies to other sectors of the environmental field. Comparable to the sentiment expressed in Hardin’s Tragedy of the Commons37, underestimating the importance of sustainable stewardship of natural resources will lead to environmental and health burdens. The idea that the social forces that lead to inequitable systems should then govern and allocate the benefits that nature offers perpetuates environmental injustice. For example, developing cities in a way that regards vegetation as merely an aesthetic accessory instead of a key part of its ecological backbone can be detrimental in many ways. On the other hand, increasing natural amenities in disadvantaged communities can result in gentrification if housing protections are not put into place38. Solutions are needed that relieve the burden that air pollution has on public health through green infrastructure while not inducing further harm to environmental justice communities. A key component of this is the comprehensive inclusion of affected communities at all levels of decision-making.


Making green infrastructure work to promote air pollution justice
Given these systemic issues, we suggest that green infrastructure development be partnered with actions to ensure equity and environmental justice. First of all, environmental justice calls for the involvement of diverse residents in environmental decision making. With concerns that urban green space development may lead to population displacement (i.e., green gentrification)39,40 and strains to public health41, re-engaging community members and professionals in this arena is imperative. Surface level involvement of local communities is not sufficient to mitigate such effects25. Therefore, we suggest that community inclusion be placed at the center of green infrastructure development. Also, urban foresters, planners, and dendrologists that participate in green infrastructure projects should be trained in inclusive community engagement to secure beneficial outcomes for residents.

In order for communities to be engaged in air pollution mitigation in a meaningful way, they need access to inventories of emissions data and ambient air quality monitoring in formats that are user-friendly and publicly available. This is essential for affected communities, researchers, and other stakeholders to have accurate data for mitigation measures like green infrastructure. Recognizing that air pollution can negatively impact health at multiple scales, mitigation strategies must note the importance of green infrastructure policies at larger (e.g., regional) geographic levels42. Likewise, infrastructure to monitor air pollution should be refined at smaller geographic scales, such as census block groups or city blocks, that more accurately reflect community demographics. Current regulatory monitoring does not adequately represent disparate air pollution exposures at the community scale, particularly for low-income and communities of color43. Accounting for these challenges relates to quantifying air pollution exposure in different locations44 and understanding spatial patterns of air quality.

While we acknowledge the importance of equal access to green infrastructure, it is crucial to ensure that related professionals uphold ethical practices and dismantle further marginalization. Many organizations have standards related to justice and fair treatment of all people in their mission41,42, but the actual implementation of these standards in green infrastructure projects needs to be evaluated. A code of ethics is shortsighted without objective oversight in place to verify that it is being practiced. Therefore, we suggest more emphasis on how environmental, urban planning, and public health professionals are evaluated on their ethical practices.

In many sectors of society, marginalized people and communities are treated without the value and significance that they inherently possess. To actualize equitable policies on green infrastructure and air pollution, we must honor the moral and ethical tenets of equal protection under our laws (and create those that do not exist). This means reducing pollution exposure and repositioning vulnerable populations to receive ecosystem services. Although scholars have long expressed how systemic racism and disenfranchisement create health disparities45,46, the seeds of inequality planted centuries ago have perpetuated unequal exposure to environmental hazards and access to environmental benefits. Developing green infrastructure projects can bring great benefits to marginalized communities, but cannot on its own solve historical and systemic inequality. In the same way that we invest to protect ecological diversity, we must act to eliminate inequity for marginalized people by effectively partnering nature with all of the people that it supports.


Jennings, V., Reid, C.E. & Fuller, C.H. Green infrastructure can limit but not solve air pollution injustice. Nat Commun 12, 4681 (2021).

Nature Communications:


Income-related health inequalities associated with the coronavirus pandemic in South Africa: A decomposition analysis




The coronavirus disease 2019 (COVID-19) has resulted in an enormous dislocation of society especially in South Africa. The South African government has imposed a number of measures aimed at controlling the pandemic, chief being a nationwide lockdown. This has resulted in income loss for individuals and firms, with vulnerable populations (low earners, those in informal and precarious employment, etc.) more likely to be adversely affected through job losses and the resulting income loss. Income loss will likely result in reduced ability to access healthcare and a nutritious diet, thus adversely affecting health outcomes. Given the foregoing, we hypothesize that the economic dislocation caused by the coronavirus will disproportionately affect the health of the poor.


Using the fifth wave of the National Income Dynamics Study (NIDS) dataset conducted in 2017 and the first wave of the NIDS-Coronavirus Rapid Mobile Survey (NIDS-CRAM) dataset conducted in May/June 2020, this paper estimated income-related health inequalities in South Africa before and during the COVID-19 pandemic. Health was a dichotomized self-assessed health measure, with fair and poor health categorized as “poor” health, while excellent, very good and good health were categorized as “better” health. Household per capita income was used as the ranking variable. Concentration curves and indices were used to depict the income-related health inequalities. Furthermore, we decomposed the COVID-19 era income-related health inequality in order to ascertain the significant predictors of such inequality.


The results indicate that poor health was pro-poor in the pre-COVID-19 and COVID-19 periods, with the latter six times the value of the former. Being African (relative to white), per capita household income and household experience of hunger significantly predicted income-related health inequalities in the COVID-19 era (contributing 130%, 46% and 9% respectively to the inequalities), while being in paid employment had a nontrivial but statistically insignificant contribution (13%) to health inequality.


Given the significance and magnitude of race, hunger, income and employment in determining socioeconomic inequalities in poor health, addressing racial disparities and hunger, income inequality and unemployment will likely mitigate income-related health inequalities in South Africa during the COVID-19 pandemic.


Nwosu, C.O., Oyenubi, A. Income-related health inequalities associated with the coronavirus pandemic in South Africa: A decomposition analysis. Int J Equity Health 20, 21 (2021).


International Journal for Equity in Health : 


How research covering more than 5,000 years sheds light on income inequality today


Analysis based on data spanning millennia reveals link between when governments were established and income inequality.

King Menes unified Egypt around 5,000 years ago, making it among the world’s first central governments.

Millennia later, Namibia, on the southwest coast of Africa, was under German then South African rule until 1990, when its independent government was formed.

Egypt’s history of statehood is old and Namibia’s is new, yet both countries have this in common: relatively high levels of income inequality today.

Central governments that are very old or new tend to have higher inequality than those in the middle — a “just right” Goldilocks zone of lower inequality for countries with governments established sometime between Egypt and Namibia.

That’s the essential finding from a recent paper in Economic Modelling, “Statehood experience and income inequality: A historical perspective,” based on data covering more than 5,000 years.

“A key argument is that both newly established and older states tend to suffer from the persistence of poor governance, making it difficult to establish an egalitarian society,” author Trung Vu, a doctoral researcher in economics at the University of Otago in New Zealand, explained by email.

Countries in the Goldilocks zone, with intermediate statehood experience and relatively low levels of inequality, include Austria, Belgium, Germany, Japan and Switzerland


Vu’s U: Statehood and inequality
Vu uses historical data spanning 3500 B.C. to the year 2000 to determine when 128 countries developed statehood.

Statehood happens when a central government is established that has the power to enforce laws and regulations, collect taxes, and perform other functions on behalf of a large number of people.

Some modern countries have had many kinds of central governments over the years — monarchies, dictatorships, representative democracies.

But statehood is not about what kind of government a territory has or had. It’s simply about the existence of centralized governance.

Vu then takes an average of Gini coefficients, a widely used measure of income distribution, for those 128 countries from 1960 to 2015. Italian statistician Corrado Gini developed the measure in 1912. It’s often produced on a 0 to 100 scale. A score closer to 0 indicates less inequality while a score closer to 100 indicates more inequality.

For Vu, a U-shaped relationship between historical statehood and income inequality emerges.

Central governments that are very old or new tend to have higher inequality than those in the middle. There are outliers. Peru, Guatemala and Mexico have relatively high inequality but are in the intermediate, Goldilocks zone. Slovakia and Finland have relatively little experience with statehood and relatively low inequality, according to Vu’s analysis.

The U.S., too, has a relatively new central government. Although income inequality in the U.S. has risen in recent decades, it’s still lower than in many other countries.

Still, the overall trend goes high-low-high, like a U.

“Understanding whether history casts a long shadow on current development outcomes is the first step toward managing the long-term legacy of history,” Vu wrote by email.


Institutions and income distribution
Separate researchers developed the historical data on statehood Vu uses, publishing their findings in a 2017 paper in the Journal of Economic Growth. Those researchers used a variety of secondary sources, including the Encyclopedia Britannica, academic journal articles and books, to determine when places established statehood.

Newer and older states tend to have higher income inequality because they lack institutional quality and stability, according to Vu.

Long-standing governments may suffer from institutional stagnation, he explained. Powerful bureaucrats emerge who manipulate established systems to their benefit, increasing inequality.

Newer governments, meanwhile, are susceptible to regime change, outside attack and internal corruption from officials who take advantage of laws that are not well established. Steady economic growth and equitable income distribution are difficult in a nation that is political unstable.

Countries in the Goldilocks zone tend to be more stable and less corrupt: “A unified society reduces conflicts and political instability, thus improving income distribution,” Vu writes in his paper.


Upending Kuznets?
Russian-American economist Simon Kuznets, writing in The American Economic Review in March 1955, offered a theory of a frown-shaped, or inverted-U relationship between economic development and income inequality.

The theory goes that income inequality in a country starts low, rises as economic development continues, then settles down again when the country develops a mature economy.

Today, the inverted-U is known as the Kuznets curve.

Kuznets wrote in his paper that his theory was based on “perhaps 5% empirical information and 95% speculation, some of it possibly tainted by wishful thinking.” (He went on to win the Nobel Prize in economics in 1971 for his work on how national economies grow.)

The Kuznets curve is “a story of adjustment over time, even though many of the empirical studies on [it] rely on cross-sectional data — a snapshot of cross-country variation at a particular time,” Dorian Owen, Vu’s academic advisor, explained by email. “Increases in inequality in developed economies post-1960 and the East Asian growth experience — with both increasing income per capita levels and reduced inequality — are often cited as counterexamples to the dynamics of adjustment assumed by the Kuznets curve, so the relevance of the Kuznets curve is contested.”

Vu noted by email that his findings do not necessarily contradict recent research supporting the Kuznets curve, adding that “there are many factors shaping the evolution of income inequality.” 

Also, Vu’s research looks specifically at statehood as a driver of inequality. He weighed experience with statehood for recent 50-year periods more heavily into the analysis than distant periods, because recent events are more likely than ancient history to affect today’s economies.

Vu also controlled for geographic characteristics as well as recent income levels, trade openness, development of governmental and financial institutions and human capital.

Those indicators are associated with a country’s economic development. But Vu is examining the relationship between statehood and inequality, not economic development and inequality.

Though Vu noted there is no way to rule out every factor other than statehood that affects inequality today, there is no other variable he considers that “completely absorbs the effects of state history on income inequality.”

For government officials and others working to reduce disparities, “curtailing income inequality requires treating the disease not just its symptoms,” Vu writes in his paper.

“Policymakers need to recognize the historical legacy that has a persistent influence on the environment within which current policies are designed, including, in some countries, potential resistance to reducing inequality,” Owen explained.


Clark Merrefield joined The Journalist’s Resource in 2019 after working as a reporter for Newsweek and The Daily Beast, as a researcher and editor on three books related to the Great Recession, and as a federal government communications strategist. He was a John Jay College Juvenile Justice Journalism Fellow and his work has been awarded by Investigative Reporters and Editors. @cmerref


By                              :          Clark Merrefield 

Date                          :           April 26, 2021

Source                      :           The Journalist's Resource