Structural transformation, income inequality and government expenditure: evidence from international panel data
In the past few decades, several developing countries have experienced a notable increase in income inequality along the path of economic development. Widening income inequality has been accompanied by growing demand for redistributive policy measures. The purpose of this paper is to examine the gov...
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Penerbit Universiti Kebangsaan Malaysia
2022
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| Online Access: | http://journalarticle.ukm.my/21387/1/Structural%20Transformation%2C%20Income%20Inequality%20and%20Government%20Expenditure.pdf http://journalarticle.ukm.my/21387/ https://ejournals.ukm.my/jem/ |
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| author | Wannaphong Durongkaveroj, |
| author_facet | Wannaphong Durongkaveroj, |
| author_sort | Wannaphong Durongkaveroj, |
| building | Tun Sri Lanang Library |
| collection | Institutional Repository |
| content_provider | Universiti Kebangsaan Malaysia |
| content_source | UKM Journal Article Repository |
| continent | Asia |
| country | Malaysia |
| description | In the past few decades, several developing countries have experienced a notable increase in income inequality along the path of economic development. Widening income inequality has been accompanied by growing demand for redistributive policy measures. The purpose of this paper is to examine the government spending and income inequality nexus in the context of structural transformation using an international panel data set covering 51 countries over the period 1990 to 2018 and an analytical framework that draws on Kuznets (1955). The system GMM estimates show that an expansion of government expenditure first generates rising income inequality but falling at the later stage, suggesting an inverted U-shaped relationship. Compared to developed nations, this inequality-reducing effect of government expenditure is more pronounced in developing countries. In addition, the relationship also varies by specific types of government expenditure and sample composition. For instance, inequality–reducing effect of government spending in Asian countries is only limited to health expenditure, indicating that the redistributive impacts of government expenditure may partly depend on the extent to which the primary beneficiaries of such spending are low-income people. |
| format | Article |
| id | my-ukm.journal.21387 |
| institution | Universiti Kebangsaan Malaysia |
| language | en |
| publishDate | 2022 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| record_format | eprints |
| spelling | my-ukm.journal.213872023-03-27T00:29:19Z http://journalarticle.ukm.my/21387/ Structural transformation, income inequality and government expenditure: evidence from international panel data Wannaphong Durongkaveroj, In the past few decades, several developing countries have experienced a notable increase in income inequality along the path of economic development. Widening income inequality has been accompanied by growing demand for redistributive policy measures. The purpose of this paper is to examine the government spending and income inequality nexus in the context of structural transformation using an international panel data set covering 51 countries over the period 1990 to 2018 and an analytical framework that draws on Kuznets (1955). The system GMM estimates show that an expansion of government expenditure first generates rising income inequality but falling at the later stage, suggesting an inverted U-shaped relationship. Compared to developed nations, this inequality-reducing effect of government expenditure is more pronounced in developing countries. In addition, the relationship also varies by specific types of government expenditure and sample composition. For instance, inequality–reducing effect of government spending in Asian countries is only limited to health expenditure, indicating that the redistributive impacts of government expenditure may partly depend on the extent to which the primary beneficiaries of such spending are low-income people. Penerbit Universiti Kebangsaan Malaysia 2022 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/21387/1/Structural%20Transformation%2C%20Income%20Inequality%20and%20Government%20Expenditure.pdf Wannaphong Durongkaveroj, (2022) Structural transformation, income inequality and government expenditure: evidence from international panel data. Jurnal Ekonomi Malaysia, 56 (3). pp. 29-44. ISSN 0127-1962 https://ejournals.ukm.my/jem/ |
| spellingShingle | Wannaphong Durongkaveroj, Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title | Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title_full | Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title_fullStr | Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title_full_unstemmed | Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title_short | Structural transformation, income inequality and government expenditure: evidence from international panel data |
| title_sort | structural transformation, income inequality and government expenditure: evidence from international panel data |
| url | http://journalarticle.ukm.my/21387/1/Structural%20Transformation%2C%20Income%20Inequality%20and%20Government%20Expenditure.pdf http://journalarticle.ukm.my/21387/ https://ejournals.ukm.my/jem/ |
| url_provider | http://journalarticle.ukm.my/ |