The paper is about the political consequences of increasing economic inequality in Western economies. Political theorists have often stressed that democracy is in troubles when its population is not broadly uniform in income and wealth because unequal economic resources can easily translate into a surplus of political resources in the hands of the few. The connections between economic inequality and democracy, however, are not easy to detect and the body of literature is not so large to provide robust assessments of their complex relationship. The aim of this paper is to review the links between the two and to offer some hints on the political relevance of the inequality consequences, if any, on democracy.
The paper is about the political consequences of increasing economic inequality in Western economies. Political theorists have often stressed that democracy is in troubles when its population is not broadly uniform in income and wealth because unequal economic resources can easily translate into a surplus of political resources in the hands of the few. The connections between economic inequality and democracy, however, are not easy to detect and the body of literature is not so large to provide robust assessments of their complex relationship. The aim of this paper is to review the links between the two and to offer some hints on the political relevance of the inequality consequences, if any, on democracy.
Wilkinson and Pickett consider the income distribution in 23 rich countries (U.S. included) and plot the ratio between the income received by the top 20% of the population to that received by the bottom 20% - as a measure of inequality - against the Index of health and social problems built on the UN Development Program data (averaged for the reporting period 2003-2006) for the same countries. This index - like the well known Human Development Index (HDI) - is a simple average of the data for the following social phenomenon: level of trust, mental illness (no data for Denmark), life expectancy, infant mortality, obesity, children educational performance (no data for UK), teenage birth, homicides, imprisonment rates, social mobility. Without entering into the details, the main and robust message coming out from the book is that among the 23 rich countries the more unequal ones do worse according to almost every quality of life indicator. The U.S. - the most unequal country in the sample - is the most striking example of that, followed by Portugal and the UK (both places where the gap between rich and poor is relatively large), whilst the Scandinavian countries invariably rank last. The message is clear: social problems were caused by material life conditions the more affluent countries should have performed better than the less affluent (still in the same basket of rich countries). Instead, the evidence suggests that it is the relative position within a society to matter the most: where income differences are bigger, social distances are bigger and social stratification more remarkable.
Economic theory has not been delving extensively and systematically into the strictly related phenomena of Foreign Direct Investment (FDI) and Multinational Enterprise (MNE) until the 1980s.1 Two distinct circumstances have been favouring this recent renewed interest: a big surge in the former and a new space for the latter in the mainstream economic theory. FDI – the main way through which MNEs act – has been growing recently at an impressive rate (more than world trade), and that this growth has had the puzzling feature of concerning particularly the industrialised countries, which have been reciprocally engaged in such capital movements. The emergence of a new body of trade and location theory made it possible to enhance the understanding of this phenomenon. The overall theme is on the frontier of the research in international trade and applied industrial economics, and it is complex and unsettled. The subject of this paper is just to fix up ideas about some selected topics. Section I briefly reviews the general theoretical setting from the appearance of the OLI paradigm in the late '70s to what has been evolving through the subsequent two decades. Section II surveys the main effects of FDI on the home and the host countries respectively. Section III focuses on European economic geography with the interest in the effects of European economic integration on MNEs' activity in the form of FDI. Some concluding remarks close the paper.
Introduction -- Why inequality is the real issue -- The long neglect of inequality -- The statistical drift of inequality studies -- Inequality and globalization -- Inequality and democracy -- The future of inequality
Di poche parole si è così abusato, nei dibattiti sui problemi economici, come del termine "competitività". Essa è al centro di programmi politici, di indirizzi di governo, di inchieste e articoli giornalistici. A fronte dello smodato utilizzo del termine, però, non fa riscontro una chiara e univoca definizione di questo concetto nelle scienze economiche.
Di poche parole si è così abusato, nei dibattiti sui problemi economici, come del termine "competitività". Essa è al centro di programmi politici, di indirizzi di governo, di inchieste e articoli giornalistici. A fronte dello smodato utilizzo del termine, però, non fa riscontro una chiara e univoca definizione di questo concetto nelle scienze economiche.
This paper presents an empirical investigation about the effect of an increase in economic inequality on some aspects of the quality of a democracy. The main novelty of the paper lies in its methodology: it applies to a single country (instead of a pool of countries) - the UK - in a long run perspective. Using survey data, we select three questions and check whether an increase in inequality alters the answers to these questions, subject to other control variables. Another novelty is the use of several measures of inequality (rather than the usual GINI only) both for disentangling what happens in the different parts of the income distribution and for avoiding the dependence of the results on the choice of the indicator. The main finding is that a higher level of income inequality impacts negatively on citizens' satisfaction with democracy and positively on their political participation.
This paper presents an empirical investigation about the effect of an increase in economic inequality on some aspects of the quality of a democracy. The main novelty of the paper lies in its methodology: it applies to a single country (instead of a pool of countries) - the UK - in a long run perspective. Using survey data, we select three questions and check whether an increase in inequality alters the answers to these questions, subject to other control variables. Another novelty is the use of several measures of inequality (rather than the usual GINI only) both for disentangling what happens in the different parts of the income distribution and for avoiding the dependence of the results on the choice of the indicator. The main finding is that a higher level of income inequality impacts negatively on citizens' satisfaction with democracy and positively on their political participation.
The European enlargement provides new space for re-organizing the production and re-locating the plants. Few studies approach the complex theme of industrial location in the EU new-comers: statistics are still scarce, language constitutes a barrier for assuming reliable information, and the differences in the economic and institutional structure bring further difficulties. This paper aims at investigating the relation between institutional change in this area and FDI. In particular, the focus will be on the privatisation process, which has played a major role in determining the behaviour of the firms and thus the direction of the FDI.
