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Economic Globalization, Domestic Politics and Income Inequality in the Developed Countries: A Cross-National Analysis

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  • Vincent Mahler

Abstract

During the last decade, few issues have generated as much debate among scholars, policy-makers and political activists as the relationship between economic globalization and domestic income inequality in the developed world. The central aim of this paper is to offer an empirical assessment of the impact of economic globalization on the distribution of income generated by the market and the ability and willingness of states to redistribute it. Three basic analyses will be conducted. The first and most extensive is an unbalanced pooled cross-sectional time-series analysis of the international and domestic sources of cross-national variance in income distribution and redistribution for various years between the early 1980s and the early 1990s. This analysis will employ measures of post-government disposable income, pre-government earnings and fiscal redistribution that have been calculated from household-level income surveys available from the Luxembourg Income Study (LIS), which provides by far the most comprehensive, detailed and accurate cross-national data on income inequality currently available. The second analysis will offer a full-scale pooled cross-sectional time-series analysis of less complete and comparable annual data from non-LIS sources on pre-government wage dispersion between 1970 and 1990. Finally, the paper will examine trends over an even longer period in the distribution of post-government income in a single country, the United States, for which reliable annual figures are available for the period from 1967 to 1996. Among the questions addressed in the paper are the following: Is integration into the world economy systematically related to domestic income inequality across countries or over time? Can any economic dislocation resulting from globalization be ameliorated by the redistributive activities of the state? Are there differences in the impact of the three main modes of international integration, trade, direct foreign investment and global financial flows? To what extent are income distribution and redistribution the product of essentially domestic political variables not directly associated with economic globalization?

Suggested Citation

  • Vincent Mahler, 2001. "Economic Globalization, Domestic Politics and Income Inequality in the Developed Countries: A Cross-National Analysis," LIS Working papers 273, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:273
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    Cited by:

    1. Almas Heshmati, 2006. "Continental And Sub-Continental Income Inequality," The IUP Journal of Applied Economics, IUP Publications, vol. 0(1), pages 7-52, January.
    2. Heshmati, Almas, 2004. "Data Issues and Databases Used in Analysis of Growth, Poverty and Economic Inequality," IZA Discussion Papers 1263, Institute of Labor Economics (IZA).
    3. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 13(4), pages 55-121.
    4. Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute of Labor Economics (IZA).
    5. Heshmati, Almas, 2004. "The World Distribution of Income and Income Inequality," IZA Discussion Papers 1267, Institute of Labor Economics (IZA).
    6. Heshmati, Almas, 2004. "The Relationship between Income Inequality, Poverty and Globalisation," IZA Discussion Papers 1277, Institute of Labor Economics (IZA).
    7. Tausch, Arno, 2009. "Schaufenster Griechenland – was kann aus dem aktuellen Debakel für das soziale Europa gelernt werden? [Showcase Greece – what can be learnt from the current debacle for a Social Europe?]]," MPRA Paper 14251, University Library of Munich, Germany.
    8. Tausch, Arno, 2008. "On the world market trajectory of 21 major book publishing companies in globalization and European studies in 100+ countries. From “Amsterdam University Press” via “Palgrave” and “Nova Science Publish," MPRA Paper 9613, University Library of Munich, Germany.
    9. Almas Heshmati, 2003. "Measurement of a Multidimentional Index of Globalization and its Impact on Income Inequality," WIDER Working Paper Series DP2003-69, World Institute for Development Economic Research (UNU-WIDER).
    10. Almas Heshmati & Sangchoon Lee, 2010. "The Relationship between Globalization, Economic Growth and Income Inequality," TEMEP Discussion Papers 201051, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jan 2010.

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