Ph.D. Thesis: Economic Growth and Inequality: The ...

Ph.D. Thesis: Economic Growth and Inequality: The Colombian Experience 1930-1990

Simon G. Ford

London School o fEconomics and Political Science (4293) i W l

UMI Number: U615797

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Poverty makes a mockery o f what human life should be.

Bertrand Russell

Abstract

The thesis is concerned with the relationship between economic growth, defined by GNP per capita, and inequality. The latter is discussed with reference to income distribution and poverty.

Firstly, the theoretical background to the debate is outlined. While considering a wide array of positions, it focuses particularly on the influential thesis of Simon Kuznets (1955), which posits a relationship between a country's economic growth and its income distribution profile. Kuznets' thesis is discussed at length and compared to other interpretations of the relationship.

The Colombian experience is then brought in, as a case study with which to test Kuznets' proposition. Published research and other available data, covering the period up to 1978, is then reviewed, before the latest available data - official statistics and other sources, supplemented by interviews carried out by the author - covering the 1978-1990 period, is presented and discussed in detail. A comparison of the inequality profile in the period up to 1978 with that between 19781990 is then presented.

Following this, some possible determinants - both economic and sociological - of the income distribution and poverty trends between 1978 and 1990 are discussed. These include those related to the economy, the government, education, the drug-trade, and the 'culture of violence'. Conclusions are arrived at as to the influence of each.

An overall conclusion is then drawn, which attempts to highlight the links between the Kuznets thesis and the Colombian experience. The problems of a thesis such as Kuznets', arrived at with cross-sectional data, are discussed, as are those associated with using a case study approach to 'test' an hypothesis.

Finally, the thesis includes two appendices, the first discussing the data used to assess the income distribution and poverty profiles in the period 1978-1990, the second outlining the advantages and disadvantages of the various measures of inequality employed in the study.

Contents

Chapter 1 The Theoretical Debate (p.l)

1 - 4 (1) Introduction

4 - 1 4 (2) Inequality and Economic Development - Initial Interest and the Ideas of Simon Kuznets

14 - 23 (3) Responses to Kuznets (i)

24 - 38 (4) Responses to Kuznets (ii)

38 - 39 (5) Concluding Thoughts

40 - 44

Notes

Chapter 2

Inequality and Poverty in Colombia to the End of the 1970's (p.45)

45 - 48 (1) Introduction and Methodological Approach

48 - 65 (2) Income Distribution

66 - 75 (3) Poverty

75 - 79 (4) Two Further Aspects of Inequality: Regional Inequality and Social Mobility.

80 - 82 (5) Concluding Thoughts

82 - 87

Notes

Chapter 3 Income Distribution Trends in Colombia/ 1978 - 1990 (p.88)

89 - 105 (1) Urban Income Distribution: i) Household distribution of income (94 - 97)

ii) Household income per capita (97 - 100)

iii) Income distribution among receivers of income (100 - 102) iv) Labour incomes (102 - 105)

106 - 115 (2) Rural Income Distribution: i) Per capita income distribution (106 - 109)

ii) Household distribution of income (109 - 112) iii) Household income per capita (112 - 115)

115 - 117 (3) Wages During the 1980's 117 -118 (4) Unemployment 119 - 120 (5) Summary 121 - 123 Notes

Chapter 4

Poverty Trends in Colombia, 1978-1990 (p.124)

124 -131 (1) Two Methods of Estimating Poverty

131 -144 (2) 1985 Census and 1984/5 Survey of Incomes and Expenditures

144 -148 (3) Other Poverty Estimates for the 1980's

14 8 -154 (4) Who Are the Poor?

154 -156 (5) Summary

157 - 160

Notes

Chapter 5

Comparison of Pre-1978 Trends with 1978-1990 Trends (p.161)

161 - 168 (1) Overall Changes in Inequality

168 - 172 (2) Changes in Rural Inequality:

i) Income Distribution (168 - 170) ii) Poverty (171 - 172)

173 - 175 (3) Changes in Urban Inequality:

i) Income Distribution (173 - 174) ii) Poverty (174 - 175)

175 - 180 (4) Changes to the Functional Distribution of Income

180 - 181 (5) Summary

182

Notes

Chapter 6 Determinants (p.183)

183 - 187 Introduction 187 - 197 i) Economic Determinants 197 - 218 ii) Government-Driven Determinants:

a) Government Social Programmes (198 - 211) b) Taxation and Subsidies (211 - 218) 218 - 225 iii) Education-Related Determinants: a) Level of Educational Provision (218 - 223) b) Social Mobility (223 - 225) 226 - 234 iv) Drug-Related Determinants 234 - 238 v) 'Culture of Violence1 Related Determinants 239 - 253 vi) Conclusions: Substantive and Methodological a) Substantive (239 - 248) b) Methodological (248 - 251) 252 - 253 Notes

Appendix 1 Fieldwork and Data (p.254)

254 - 262 Fieldwork 262 - 266 The Data

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