As this is a report on a global scale we can see the

  • No School
  • AA 1
  • 61

This preview shows page 29 - 30 out of 61 pages.

As this is a report on a global scale, we can see the trend in inequality across the world, providing a comparative perspective across countries. Since 1980, while the Chinese economy has grown 800% and India’s a far lower 200%, inequality in China today is considerably lower than in India. The share of the top 1% of the Chinese population is 14% as opposed to the 22% reported for India. The report emphasises that growing inequality need not necessarily accompany faster growth, observing that inequality actually declined in China from the early 21st century. By then China had grown faster for longer than most countries of the world ever did . China has grown faster, has far lower poverty and far higher average income, and its income distribution is less unequal at the very top. The World Development Indicators data released by the World Bank show that per capita income in China was five times that of India in 2016 while the percentage of the population living on less than $1.90 a day was about 10 times less at the beginning of this decade. India has a forbidding gap to traverse in all directions, but for now let us focus on inequality. A comparison of the progress made in China and India meaningful because though representing different political systems, they had both been large agrarian economies at similar levels of per capita income when they had started out in the early 1950s. Moreover, the absence of democracy in a society does not by itself guarantee faster economic growth and greater income equality. For a populous poor country to lift itself to a higher growth path and stay there requires imaginative public policy and a steady governance. If there is to be a meta narrative for China’s economic development, it is that its leadership combined the drive for growth with the spreading of human capital. Human capital may be understood as a person’s endowment derived from education and robust health. When a population is more or less equally endowed, as it was in China when it began to draw ahead, the human capital profile of a country may be represented by a rectangle. Now the returns to labour would be relatively equal compared to the country in which the distribution of human capital is pyramidical, which is the case for India. To see the latter better, note that the share of the Indian population with secondary schooling is less than 15%. China had by the early 1970s achieved the level of schooling India did only by the early 21st century. The spread of health and education in that country enabled the Chinese economy to grow faster than India by exporting manufactures to the rest of the world. These goods may not have been the byword for quality but they were globally competitive, which made their domestic production viable. The resulting growth lifted vast multitudes out of poverty. As the human capital endowment was relatively equal, most people could share in this growth, which accounts for the relative equality of outcomes in China when compared to India. An ingredient of this is also the greater participation of
Image of page 29

Subscribe to view the full document.

Image of page 30
  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask bonus questions You can ask questions ( expire soon) You can ask questions (will expire )
Answers in as fast as 15 minutes