Explaining Odious Inequality

Abstract

Odious inequality is by no means restricted to developing countries only, but during the second half of the twentieth century it became endemic to the group of low- and middle-income countries that we are focusing upon. What is it about these countries, their histories, place in the global order, and their political and economic systems that precipitated this socio-economic disaster? This chapter uses the theoretical literature on income distribution and the global division of labour to show that the level and nature of economic inequality in developing countries is a function of a number of historical and contemporary economic and political factors, namely initial factor endowments coupled with the process whereby most of the developing states were incorporated into the world capitalist system as vulnerable economic units, the processes of household formation and economic modernization, and the nature of governance within such countries. In Chapter 3, we shall turn to the empirical record concerning five centuries of inequality in developing countries in order to test the expectations and hypotheses generated by this chapter.