The Political Economy Of Equality And Inequality: Income Distribution, Technological Change And Power

Although income distribution is one of the oldest parts of economic theory, we are still far from having any satisfactory theory explaining why income distribution in one country is more or less equal than in another, or what makes distribution move towards or away from equality over time. Behind the development of equality and inequality lie a variety of forces that do not guarantee that this development necessarily continues in the same direction, towards either a greater or smaller degree of equality. At the heart of this combination of forces that shape income distribution lies the key factor of the nature and rate of technological progress. But technology is not the only factor. There is also the nature of power structure, the rate of population growth and the degree of integration with the outside world. This paper attempts to show the likely impact of each of these factors on the trend and changes in the degree of equality and inequality. A final section applies this analysis to the development of the pattern of income distribution in Egypt over the last 200 years, followed by a few observations comparing Egypt in this respect with other Arab countries.