LA_Today_Inequality_and_Redistribution (2) Flashcards

(94 cards)

1
Q

What explains the inequality divergence between the Global South and the Global North?

A

Institutional causes and redistribution systems are major factors

Redistribution systems, such as taxes and transfers, drive inequality divergence, while property and market access are secondary.

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2
Q

What is the Gini coefficient?

A

A measure of inequality within a distribution, ranging from 0 (perfect equality) to 1 (perfect inequality)

The Gini coefficient is often used to gauge income or wealth distribution.

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3
Q

What percentage of total excess inequality does Latin America have compared to countries of equal income?

A

30% total excess inequality

This is equivalent to 10 Gini points more compared to countries of equal income.

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4
Q

What are the two main factors contributing to inequality divergence?

A
  • Redistribution systems (taxes and transfers)
  • Property and market access

Redistribution systems are the primary driver, while property and market access play a secondary role.

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5
Q

True or False: The Global South has a fiscal welfare state that reduces inequality.

A

False

The Global South missed the emergence of a fiscal welfare state that reduced inequality in the North during the 20th century.

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6
Q

What type of institutions does the Global South predominantly have?

A

Extractive institutions

These institutions restrict property access and limit growth.

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7
Q

What is a key characteristic of the early institutional thesis?

A

Elites use the state to extract resources from citizens

This is a foundational concept in understanding the dynamics of inequality.

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8
Q

What is the main driver of inequality according to the lecture’s findings?

A

Redistribution systems

Taxes and transfers are crucial in determining levels of inequality.

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9
Q

Fill in the blank: The Global South has _______ less redistribution compared to countries of equal income.

A

two times

For example, Chile redistributes 12% compared to 27% in Romania.

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10
Q

What is the relationship between pre-redistribution factors and redistribution?

A

They have distinct political economies

This means that the political dynamics governing each are different.

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11
Q

What does the term ‘elite extraction’ refer to?

A

The process by which elites use state mechanisms to extract resources from the population

This is a core mechanism of inequality.

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12
Q

What is one of the limits of the institutionalist consensus?

A

Oversimplified causality

This can lead to inaccurate conclusions about the historical causes of inequality.

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13
Q

What is the significance of Gini coefficients before and after taxes and transfers?

A

They indicate the level of inequality in different contexts

Gini before taxes shows market inequality, while Gini after reflects the impact of redistribution.

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14
Q

What percentage of inequality does Latin America exhibit due to market factors?

A

Approx. 10% excess market inequality

This indicates a 3 Gini points excess before taxes and transfers.

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15
Q

What is the outcome of failed state capacity in relation to inequality?

A

Limits effective taxation and public goods provision

This leads to lower levels of redistribution and higher inequality.

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16
Q

True or False: Historical data is irrelevant for understanding current inequality patterns.

A

False

Historical data helps trace the evolution of inequality from colonial times to the present.

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17
Q

What is the goal of building executive checks in governance?

A

To limit extraction and ensure effective public spending

This is aimed at reducing corruption and enhancing state capacity.

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18
Q

What role do omitted channels like state capacity and education play in inequality?

A

They are critical factors that influence the level and distribution of inequality

Ignoring these factors can lead to incomplete analyses of inequality.

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19
Q

What do the new data contributions aim to achieve?

A

To identify causes and timing of inequality divergence

This includes modern and historical data to disentangle mechanisms.

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20
Q

What is the Gini Coefficient?

A

A measure of income inequality within a population

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21
Q

Which country has the highest Gini Coefficient according to the data?

A

South Africa

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22
Q

What percentage represents the Gini Coefficient in Brazil (pre-tax & transfers)?

A

39%

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23
Q

What is the OECD average Gini Coefficient (pre-tax & transfers)?

A

35%

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24
Q

What is the Gini reduction percentage (after tax & transfers) in Nordic Countries?

A

40%

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25
True or False: Higher inequality in the Global South is mainly caused by strong redistribution.
False
26
What percentage of the Gini points gap in the Global South is attributed to weak redistribution?
80%
27
Fill in the blank: The OECD-LIS Method is used for _______.
[analyzing income inequality]
28
What is the main characteristic of Economic Inclusion?
Benefits both citizens and elites via growth
29
What is required for State Redistribution to be effective?
Democracy and strong checks
30
Which countries are noted for their high levels of pre-redistribution inequality?
South Africa and Brazil
31
What historical framework is mentioned regarding progress in most nations?
Progress even under dictators in Asia
32
What is the trend in Direct Taxes (% GDP) for Western Europe from 1870 to 1992?
Increasing trend
33
What is the relationship between the fiscal-welfare state and effective spending?
Requires credible state commitments
34
What does the Great Divergence refer to in the context of fiscality?
Differences in tax-to-GDP ratios between regions
35
Which regions show a global rise in inequality during the First Globalization?
Notably in the Global South
36
True or False: The welfare state in the developing world has been successful in the same way as in the West.
False
37
What factor is crucial for the rise of the welfare state in the West?
Democratization
38
What does the Gini reduction indicate?
The effectiveness of redistribution policies
39
What trend is observed in the Gini Coefficient for Western Europe from 1900 to 1992?
Decline in inequality
40
What is the significance of property and market access in Economic Inclusion?
It does not require democratic checks
41
Fill in the blank: The fiscal contract between the state and citizens is often _______ in the developing world.
[broken]
42
What percentage of the Gini points gap is attributed to pre-redistribution inequality in most Global South countries?
13 of 16 a Gini points gap
43
What are the main sources for the data on inequality discussed?
OECD, LIS, ECLAC, and CEQ data
44
What does the Gini Coefficient measure?
Income inequality within a population ## Footnote A Gini Coefficient of 0 represents perfect equality, while a coefficient of 1 indicates perfect inequality.
45
What is the significance of historical inequality indexes?
They reflect the level of inequality in property and land access historically, often linked to colonialism ## Footnote Historical inequality indexes can help understand current socioeconomic disparities.
46
Fill in the blank: The Global South is marked by limited _______.
property access
47
What are some channels that contribute to inequality in the Global South?
* Limited property access * Limited market entry * Limited education access * Inequality-enhancing tax structures * Lack of equalizing welfare systems ## Footnote These factors create systemic barriers to economic advancement.
48
True or False: The redistribution of wealth is a key factor in reducing inequality.
True
49
What role do European settlements play in the context of inequality?
They are linked to the establishment of liberal institutions that can promote more equality ## Footnote Areas with significant European settlements often developed more inclusive political and economic systems.
50
List two significant factors that influence economic inequality according to the research.
* Pre-distributive factors * Redistributive factors
51
Fill in the blank: The _______ Democracy Index measures checks and balances and political voice.
Liberal
52
What does the term 'extractive colonial past' refer to?
A historical context where colonial powers exploited resources and populations, leading to long-term socioeconomic inequalities ## Footnote This term emphasizes the negative impact of colonialism on current wealth distribution.
53
What is the relationship between liberal democracy and inequality?
Liberal democracies tend to promote more equality compared to illiberal institutions ## Footnote This is often due to better governance and accountability in liberal democracies.
54
What is meant by 'pre-colonial institutions' in the context of inequality?
Institutions that existed before colonial rule, which shaped the economic and social structures of societies ## Footnote These institutions can affect how resources are distributed in the post-colonial era.
55
What does a high level of federal progressivity imply?
A more equitable distribution of income through tax and transfer systems ## Footnote Federal progressivity refers to the tax system's ability to tax higher incomes at higher rates.
56
Fill in the blank: Historical inequality in the United States is often linked to _______.
slavery
57
What are the two types of factors emphasized in the study of inequality?
* Redistributive factors * Pre-distributive factors
58
True or False: Limited education access is a factor that enhances inequality.
True
59
What is the impact of monopolies on market entry in the Global South?
They limit competition and access to markets, thereby enhancing inequality ## Footnote Monopolistic practices can prevent new businesses from emerging.
60
What does the term 'fiscality' refer to in the context of inequality?
The financial policies and structures that govern taxation and public spending ## Footnote Fiscality can either alleviate or exacerbate economic disparities.
61
What does the Gini Coefficient measure?
Income or wealth inequality ## Footnote It represents the distribution of income among individuals or households in an economy.
62
What was the Gini Coefficient for Brazil in the context of wealth inequality?
0.7591 ## Footnote This indicates a high level of wealth inequality in Brazil.
63
What is the significance of European Settlers circa 1900?
They represent the percentage of the population that was of European descent in specific countries during that time ## Footnote This demographic factor often influences economic and social structures.
64
What does a negative value in Gini change post-tax and transfers indicate?
A reduction in inequality ## Footnote This means that the tax and transfer policies are successful in redistributing wealth.
65
What is the relationship between settler mortality and democracy according to the data?
Higher settler mortality is associated with lower levels of democracy ## Footnote This suggests that conditions faced by settlers impacted the political institutions established.
66
True or False: Climate and geography controls were included in all regression models.
False ## Footnote Some models included these controls while others did not.
67
Fill in the blank: The average dependent variable for the Liberal Democracy Index is _______.
1.54 ## Footnote This value represents the average score on the index across the analyzed countries.
68
What does the term 'British Origins' refer to in the context of this data?
The percentage of settlers who originated from Britain ## Footnote This factor may influence cultural and political outcomes in former colonies.
69
What does the term 'Redistribution (%Gini reduction)' measure?
The effectiveness of fiscal policies in reducing income inequality ## Footnote It reflects how much inequality is decreased through government intervention.
70
What is the significance of the R² value in the regression analysis?
It indicates the proportion of variance in the dependent variable explained by the independent variables ## Footnote Higher R² values suggest a better fit of the model to the data.
71
What is the average dependent variable for Direct Taxes (% GDP) in the 20th century?
6.64 ## Footnote This reflects the average share of GDP that was collected as direct taxes during this period.
72
What does a positive coefficient for 'Settlers avg. Literacy' indicate?
Higher literacy rates among settlers are associated with better outcomes in the dependent variable ## Footnote This suggests that education levels influence economic and political development.
73
What percentage of the variation in democratic institutions is explained by the revised IV strategy?
67-78% ## Footnote This indicates a strong link between historical settlement patterns and current democratic outcomes.
74
True or False: The effects on pre-redistribution inequality are significant according to the analysis.
False ## Footnote The analysis found significant effects on fiscal redistribution but not on pre-redistribution inequality.
75
What does 'Native State History' refer to in this context?
The historical governance structures of indigenous populations prior to 1500 ## Footnote This factor may influence contemporary political and economic outcomes.
76
What is the implication of a high R² value in the context of fiscal capacity?
It suggests that the model effectively explains the variation in fiscal capacity ## Footnote This is crucial for understanding how different factors contribute to government revenue generation.
77
What does a coefficient of -10.10 for 'Native State History' imply?
It suggests a negative relationship with the dependent variable, indicating that historical governance may hinder current outcomes ## Footnote This points to the long-term impact of indigenous governance on contemporary society.
78
What is urbanization a good proxy for?
Development and literacy ## Footnote Based on AJR 2002 and Buringh and Van Zanden 2009.
79
Which years did Nasser rule Egypt?
1956-1970 ## Footnote Implemented land reforms, mass education, and improved working conditions.
80
What significant reforms did Nehru implement in India?
Criminalized caste discrimination, land reforms, and other public goods ## Footnote Nehru ruled from 1947 to 1964.
81
Which region has a lower education Gini than Western Europe at its peak equality level?
Latin America ## Footnote This was noted during the 1950s.
82
What characterizes the magical realist view of Latin America?
A rural region defined by landless peasants and a small elite of wealthy landowners ## Footnote This view juxtaposes the elite against exploited workers.
83
What percentage of Latin America's population is urban today?
82% ## Footnote Compared to 75% in Europe.
84
What is the main reason for limited redistribution in the Global South?
Approx. 90% of households pay no direct taxes ## Footnote According to Barreix et al. 2017.
85
True or False: Pre-redistribution and redistribution have distinct political economies.
True ## Footnote The first can be compatible with authoritarian rule, but not the second.
86
What explains 80% of higher inequality in the Global South?
Limited redistribution ## Footnote Pre-redistribution inequality explains the other 20%.
87
What type of rule led to convergence in economic inclusion in the Global South?
Strongmen rule ## Footnote This includes leaders like Nasser and Nehru.
88
What is a key reason for the failure of the fiscal welfare state in the Global South?
Unchecked states cannot credibly commit to effective spending ## Footnote This limits their ability to tax citizens and provide social protection.
89
Fill in the blank: The fiscal welfare state that compressed inequality in the Global North has failed to emerge in the _______.
Global South
90
What role did colonialism play in inequality?
Key role in creating political legacies ## Footnote Divergence took place during the 20th century.
91
What is the divergence in state redistribution attributed to?
Failure follows limited democratization and checks ## Footnote Redistribution is primordial, while pre-redistribution is secondary.
92
What does the education Gini coefficient measure?
Education inequality ## Footnote It reflects disparities in educational attainment.
93
What has been the trend in education inequality in Latin America since the 1950s?
Convergence in economic inclusion ## Footnote Noted in the context of post-colonial reforms.
94
Which leaders are associated with reforms under strongman rule?
* Sukarno (Indonesia) * Nasser (Egypt) * Paz (Bolivia) * Habib (Tunisia) ## Footnote These leaders implemented significant reforms in their respective countries.