The Journal of Economic Inequality

, Volume 4, Issue 3, pp 279–301

A simultaneous equation model of economic development and income inequality


    • Department of EconomicsUniversity of Otago
  • Sebastian Torres
    • Department of EconomicsUniversity of Leicester

DOI: 10.1007/s10888-005-9016-2

Cite this article as:
Fielding, D. & Torres, S. J Econ Inequal (2006) 4: 279. doi:10.1007/s10888-005-9016-2


The paper extends existing work on inequality and economic development by estimating a cross-country structural model that identifies bi-directional relationships between income inequality and other indicators of social and economic development. Overall, lower inequality is associated with improvements in other development indicators, but this is the result of several complex interactions. The most striking feature of the structural model is the insight it provides into the reasons behind the negative ‘Africa dummy’ in previous cross-country growth studies.

Key words

income distributionsocial and economic development

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© Springer Science+Business Media, Inc. 2006