Kwan S. Kim

Income distribution and poverty: An interregional comparison

Abstract This paper compares experiences in economic growth, income distribution, and poverty in different regions of the world. It examines the causes of interregional disparities in growth and distribution, assessing the nature of the link between growth and distribution. Among other results, it concludes that low inequality is most likely to be consistent with sustainable growth, and that positive growth is neither a sufficient nor a necessary condition for low inequality or poverty incidence. In the context of the new global economy, alleviation of inequality and poverty calls for an articulate strategy targeting on the marginalized population at large.

Introduction: Themes and Challenges

In the recent past, the industrialized world as well as a large part of the developing world including the emerging market economies in Eastern Europe and China has witnessed growing income inequity in their societies, accompanied by widespread poverty. Severity in inequality varies from country to country and from region to region in the global economy. Among the OECD nations, the United States is currently the most unequal nation, and the inequality has increased in the 1980s (Chapter 10 in this volume). Japan is still one of the countries with equal income distribution in spite of the increase in inequality in the 1980s (Chapter 3 in this volume). Although among the emerging democracies in the developing world income inequality appears relatively less severe in the newly industrialized and industrializing countries in Asia, the levels of inequality seem to have risen despite their rapid economic growth even in those countries.

Equitable, productive employment targets for the international development strategy

Abstract Although economic growth in many developing countries has matched and even surpassed the growth targets of the UNs International Development Strategy (IDS), it often has failed to alleviate the problems of employment and income distribution. Nonetheless, preparations for an IDS for the Third Development Decade continue to focus on aggregate and sectoral growth targets. Recognizing the essential linkage between growth, employment and poverty, this paper formulates targets for employment and growth with equity and integrates them with the proposed overall IDS growth objective using a consistent macro framework. This paper examines the dynamic implications of this equitable, productive employment strategy for the sectoral distribution of labour and capital and for the income distribution and compares it with alternative scenarios. The basic results show that an equitable productive employment strategy will not only raise absolute incomes of the poor but improve the income distribution, whether measured by the relative income of the poorest 40% or, perhaps more important, of those who continue to obtain only low-productivity employment. Evidence from some countries in the 1970s indicates that the strategy is feasible, provided appropriate policies are pursued. An important element in the strategy appears to be the maintenance of a demand for goods produced by the poor; in this context the high growth of industry recommended in the IDS for low-income countries is likely to lead to increasing inequality. This paper concludes with some broad policy recommendations for achieving the equitable productive employment target.

China’s Turning Point from an East Asian Perspective: Prospective Recapitulation

Part I of this volume evaluated the turning point experiences in China’s neighboring countries of Japan and South Korea. Another fast-growing country outside the East Asian region, Indonesia, was included for added comparison. We then analyzed China’s labor market conditions to determine whether or not China has reached the Lewisian turning point. Other Asian neighbors provided us with useful benchmarks in determining China’s turning point in the context of the dualistic Lewisian model, that is whether its unlimited surplus labor has approached its end. While Japan, Taiwan 1 and South Korea have already passed the Lewisian turning point in 1960, 1967 and 1973 respectively, from a comparative East Asian perspective, there are good reasons to doubt that China has passed the turning point.

Japanese Experience in Technology: A Survey

Japan commenced her ‘modern economic growth’ a la S. Kuznets in 1886, following an eighteen-year transition period in the wake of the Meiji Restoration in 1868.1 Japan in the pre-war period had relatively high economic growth rates: the annual growth rate of Gross National Product (GNP) in real terms for the period 1889–1938 was 3.2 per cent. With a rate of population growth of 1.1 per cent, per capitum GNP grew at 2.1 per cent.2 Pre-war growth in Japan compares favourably with the Western nations: for instance, during the period from 1900 to 1938, the average long-term rates of growth in GNP in the UK, Germany, the USA and Japan were 1.4 per cent, 2.9 per cent, 3.0 per cent and 3.8 per cent, respectively.3 This shows the success of Japan as a latecomer in industrialization.