Publications  Income Distribution


Hypothesis 7:

Regional Differences



There are no good reasons for differences in income distribution because a country is in a particular geographic location, but regions tend to share a variety of attributes. A number of such region-related variables education, socio-political dualism, Communist governments and structure of exports were identified, mea­sured and independently tested.

But some of the geographic regions differ significantly in income distribution, even when account is taken of all the other explanatory variables and the Gini coeffi­cient is the dependent variable. This is partly due to the fact, already noted several times, that the regions differ in mean value of other significant explanatory variables. The regions that tend to have less equal income distribution West Asia, North Africa and Sub-Saharan Africa are also the regions with more dualistic societies, more raw material exports and a lower rate of educational participation.12 But there appear to be other, excluded variables associated with geographic regions. The distribution of wealth and particularly of land is undoubtedly one factor which affects income distribution, but which is not separately included in our analysis. Historical circumstances largely determine the land tenure system and history also affects the distribution of other assets.

The extent of effective fiscal redistribution of income and wealth may also distinguish the regions. This too we have not attempted to measure, except to the extent that it is reflected in government’s share in investments.







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