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>Date: Sat, 12 Aug 2000 10:19:26 -0500
>To: [EMAIL PROTECTED]
>From: "James K. Galbraith" <[EMAIL PROTECTED]>
>Subject: Fwd: Re: FW: CEPR paper--World Bank Research Faulted
>
>Those following the controversy over Dollar and Kraay's "Growth is Good for
>the Poor" will find the issue addressed directly in Web Presentation #1 on
>the UTIP web-site.
>
>We have no complaint with the proposition that growth usually helps the
>poor. In fact, our evidence points fairly consistently to an even stronger
>result: in most developing countries strong growth reduces inequality; slow
>growth and recession increase it.
>
>The failure of the World Bank and other studies to find this relationship
>is mainly traceable to their data: the lack of comparability both through
>time and across countries that afflicts the major data set on income
>inequality, the Deininger and Squire compilation on which Dollar and Kraay
>(and many others) rely. This is no fault of the Bank's researchers; they
>are only compiling many disparate studies done haphazardly over the years
>by other researchers. Our work at UTIP is more narrowly focussed on pay,
>rather than income, but that is where the theoretical relationship between
>inequality and growth ought to be found, and with greatly superior data
>coverage we do, in fact, find it.
>
>But Mark Weisbrot puts his finger on the problem: growth has slowed
>dramatically in the developing world, and distributions have therefore
>worsened. This is the failure of the globalized financial system and of
>its agents, the Bank and Fund.
>
>There is no paradox of "poverty amidst plenty" or "growth with inequality."
>The fact is, the policies of tearing down social institutions that provide
>health care, education, housing, food and direct support for the wages of
>low-income workers are not good for growth. And crises, which are endemic
>to an unregulated global capital market, have disastrous effects on
>inequality.
>
>JG
>
>
>*****
>James K. Galbraith
>LBJ School of Public Affairs
>The University of Texas at Austin
>Austin TX 78713
>Phone: 512-471-1244 (o)
>Fax: 512-471-1835 (o) 512-480-0246 (h)
>Email: [EMAIL PROTECTED]
>See the UTIP web-site at http://utip.gov.utexas.edu/
>See the ECAAR web-site at http://www.ecaar.org/
