IDEAS home Printed from https://ideas.repec.org/a/bla/ehsrev/v68y2015i2p683-706.html
   My bibliography  Save this article

The inequality trap. A comparative analysis of social spending between 1880 and 1930

Author

Listed:
  • Sergio Espuelas

Abstract

type="main"> It is often assumed that the fight against inequality played an important role in the rise of the welfare state. However, using social transfers as an indicator of redistribution and three alternative proxies for inequality—the top income shares, the ratio of the GDP per capita to the unskilled wage, and the share of non-family farms—this article shows that inequality did not favour the development of social policy between 1880 and 1930. On the contrary, social policy developed more easily in countries that were previously more egalitarian, suggesting that unequal societies were in a sort of inequality trap, where inequality itself was an obstacle to redistribution.

Suggested Citation

  • Sergio Espuelas, 2015. "The inequality trap. A comparative analysis of social spending between 1880 and 1930," Economic History Review, Economic History Society, vol. 68(2), pages 683-706, May.
    • Handle: RePEc:bla:ehsrev:v:68:y:2015:i:2:p:683-706
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/1468-0289.12062
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    2. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    3. Kristov, Lorenzo & Lindert, Peter & McClelland, Robert, 1992. "Pressure groups and redistribution," Journal of Public Economics, Elsevier, vol. 48(2), pages 135-163, July.
    4. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    5. Lindert Peter H., 1994. "The Rise of Social Spending, 1880-1930," Explorations in Economic History, Elsevier, vol. 31(1), pages 1-37, January.
    6. Guilera, Jordi, 2010. "The evolution of top income and wealth shares in Portugal since 1936," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 28(1), pages 139-171, March.
    7. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    8. Williamson, Jeffrey G, 1997. "Globalization and Inequality, Past and Present," The World Bank Research Observer, World Bank, vol. 12(2), pages 117-135, August.
    9. Berg, Andrew & Sachs, Jeffrey, 1988. "The debt crisis structural explanations of country performance," Journal of Development Economics, Elsevier, vol. 29(3), pages 271-306, November.
    10. Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
    11. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    12. Lane Kenworthy & Jonas Pontusson, 2005. "Rising Inequality and the Politics of Redistribution in Affluent Countries," LIS Working papers 400, LIS Cross-National Data Center in Luxembourg.
    13. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
    14. Keefer, Philip & Knack, Stephen, 2002. "Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-154, March.
    15. Huberman, Michael & Lewchuk, Wayne, 2003. "European economic integration and the labour compact, 1850–1913," European Review of Economic History, Cambridge University Press, vol. 7(1), pages 3-41, April.
    16. Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-187, June.
    17. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    18. Ramesh Mishra, 1999. "Globalization and the Welfare State," Books, Edward Elgar Publishing, number 826.
    19. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    20. Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
    21. Prados De La Escosura, Leandro, 2008. "Inequality, poverty and the Kuznets curve in Spain, 1850–2000," European Review of Economic History, Cambridge University Press, vol. 12(3), pages 287-324, December.
    22. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    23. Acemoglu, Daron & Robinson, James A., 2001. "Inefficient Redistribution," American Political Science Review, Cambridge University Press, vol. 95(3), pages 649-661, September.
    24. Allan Meltzer & Scott Richard, 1983. "Tests of a rational theory of the size of government," Public Choice, Springer, vol. 41(3), pages 403-418, January.
    25. Peter Lindert, 2004. "Social Spending and Economic Growth," Challenge, Taylor & Francis Journals, vol. 47(4), pages 6-16.
    26. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't the United States Have a European-Style Welfare State?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(2), pages 187-278.
    27. Sergio Espuelas, 2012. "Are dictatorships less redistributive? A comparative analysis of social spending in Europe, 1950-1980," European Review of Economic History, European Historical Economics Society, vol. 16(2), pages 211-232, May.
    28. Erling Barth & Karl O. Moene, 2009. "The Equality Multiplier," NBER Working Papers 15076, National Bureau of Economic Research, Inc.
    29. Perotti, Roberto, 1994. "Income distribution and investment," European Economic Review, Elsevier, vol. 38(3-4), pages 827-835, April.
    30. Bassett, William F. & Burkett, John P. & Putterman, Louis, 1999. "Income distribution, government transfers, and the problem of unequal influence," European Journal of Political Economy, Elsevier, vol. 15(2), pages 207-228, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martínez-Carrión, José Miguel & Cañabate-Cabezuelos, José, 2016. "Poverty and rural height penalty in inland Spain during the nutrition transition," MPRA Paper 74356, University Library of Munich, Germany, revised 01 Sep 2016.
    2. Maurizio Bussolo & Ada Ferrer‐i‐Carbonell & Anna Giolbas & Iván Torre, 2021. "I Perceive Therefore I Demand: The Formation of Inequality Perceptions and Demand for Redistribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(4), pages 835-871, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grossmann, Volker, 2003. "Income inequality, voting over the size of public consumption, and growth," European Journal of Political Economy, Elsevier, vol. 19(2), pages 265-287, June.
    2. Andrew Berg & Jonathan D. Ostry & Charalambos G. Tsangarides & Yorbol Yakhshilikov, 2018. "Redistribution, inequality, and growth: new evidence," Journal of Economic Growth, Springer, vol. 23(3), pages 259-305, September.
    3. Aysan, Ahmet Faruk, 2005. "The Role of Efficiency of Redistributive Institutions on Redistribution: An Empirical Assessment," MPRA Paper 17773, University Library of Munich, Germany.
    4. Mark Gradstein & Branko Milanovic, 2004. "Does Libertè = Egalité? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economies," Journal of Economic Surveys, Wiley Blackwell, vol. 18(4), pages 515-537, September.
    5. Guizzo Altube, Matías & Scartascini, Carlos & Tommasi, Mariano, 2023. "The Political Economy of Redistribution and (in)Efficiency in Latin America and the Caribbean," IDB Publications (Working Papers) 13194, Inter-American Development Bank.
    6. Christian Bredemeier, 2014. "Imperfect information and the Meltzer-Richard hypothesis," Public Choice, Springer, vol. 159(3), pages 561-576, June.
    7. Enea Baselgia & Reto Foellmi, 2022. "Inequality and growth: a review on a great open debate in economics," WIDER Working Paper Series wp-2022-5, World Institute for Development Economic Research (UNU-WIDER).
    8. Philip Nel, 2006. "When Can the Rabble Redistribute? Democratization and Income Distribution in Low- and Middle-income Countries," Working Papers 43, ECINEQ, Society for the Study of Economic Inequality.
    9. Martin Baur, 2010. "Politics and Income Distribution," Chapters, in: Neri Salvadori (ed.), Institutional and Social Dynamics of Growth and Distribution, chapter 3, Edward Elgar Publishing.
    10. Peter Lambert & Thor Thoresen & Runa Nesbakken, 2010. "On the Meaning and Measurement of Redistribution in Cross-Country Comparisons," LIS Working papers 532, LIS Cross-National Data Center in Luxembourg.
    11. Verónica Amarante & Gioia de Melo, 2004. "Crecimiento económico y desigualdad: una revisión bibliográfica," Documentos de Trabajo (working papers) 04-02, Instituto de Economía - IECON.
    12. Malte Luebker, 2014. "Income Inequality, Redistribution, and Poverty: Contrasting Rational Choice and Behavioral Perspectives," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 133-154, March.
    13. Andros Kourtellos & Charalambos G. Tsangarides, 2022. "Robust Correlates of Growth Spells: Do Inequality and Redistribution Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(6), pages 1302-1328, December.
    14. Malte Luebker, 2014. "Income Inequality, Redistribution, and Poverty: Contrasting Rational Choice and Behavioral Perspectives," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 133-154, March.
    15. Sergio Espuelas Barroso & Margarita Vilar Rodriguez, 2008. "The determinants of social spending in Spain (1880-1960): Is Lindert right?," Working Papers in Economics 209, Universitat de Barcelona. Espai de Recerca en Economia.
    16. Dotti, Valerio, 2020. "Income inequality, size of government, and tax progressivity: A positive theory," European Economic Review, Elsevier, vol. 121(C).
    17. Jaejoon Woo, 2023. "The long-run determinants of redistribution: evidence from a panel of 47 countries in 1967–2014," Empirical Economics, Springer, vol. 64(4), pages 1811-1860, April.
    18. Keefer, Philip & Knack, Stephen, 2002. "Polarization, Politics and Property Rights: Links between Inequality and Growth," Public Choice, Springer, vol. 111(1-2), pages 127-154, March.
    19. Woo, Jaejoon, 2011. "Growth, income distribution, and fiscal policy volatility," Journal of Development Economics, Elsevier, vol. 96(2), pages 289-313, November.
    20. Micael Castanheira & Gaëtan Nicodème & Paola Profeta, 2012. "On the political economics of tax reforms: survey and empirical assessment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 598-624, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ehsrev:v:68:y:2015:i:2:p:683-706. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ehsukea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.