Re: WB article on economic growth and income inequality

[vuca@envi.env.civil.saitama-u.ac.jp (Vu Thanh Ca)]

Dear anh Tuan,

This is a very good analysis, and I aggree.

Also I aggree with anh Aiviet's yesterday message regarding
this thread.

Cheers,

Ca.

At  2:46 AM 97.5.15 -0500, Tuan Pham wrote:
>Dear friends
>
>Thank you An Hai for posting the WB paper.
>
>All the books (not that many! :) I've read on economic
>development indicate that the initial stages of development
>is always associated with worsening income distribution,
>as investment is spearheaded by a small group of rich. 
>Then, when development reaches a certain stage, income
>starts to level up as a middle class develops. So, the 50-50
>split between developing countries with worsening gaps and those
>without may be a result of what stages of development the 
>countries are in.
>
>Given that, I think the role of government is not to interfere
>with income distribution in general but in ensuring that the
>poorest people do not suffer excessive hardships, and that
>social equity is maintained. These measures are not economic but
>legal and social:
>
>- Develop and enforce a legal system to prevent corruption, 
>abuse of power, ensure equality of all before the law, preserve
>the rights of the poor (the recent unfortunate golf course
>incident is an example).
>
>- Encourage the activities of voluntary aid agencies
>
>- Microcredit schemes to help the poor start up their own 
>businesses
>
>- A clear set of law
>
>- Transparency and accountability of the law enforcement
>agencies. Clear separation of national security matters
>and ordinary criminal and other legal matters, which must be
>handled by different agencies.
>
>Unless the government take an active approach, the poor
>will be at the mercy of the rich developers and corrupt
>officials. If this can be prevented, then increasing
>income gaps is a fair price to pay for economic development,
>not to mention that they will ALSO greatly stimulate
>the rate of economic development itself by providing a
>clear legal framework and encourage investors, foreign 
>and local.
>
>Cheers
>Tuan Pham