Income distribution and inequality: an analysis of authors in Economic Development Theory

Starting from the conception of “development style” addressed by Rugistky (2019), this paper analyzes, from a comparative point of view, the role of income inequality for someauthors of the Development Economics Theory. From Lewis’ (1954) conception of the economic development process as inexorable, income inequality is temporary and can be interpreted as a driving element of growth. The passage to the state of development is not inevitable when we abandon the assumption -adopted in Lewis - of constant returns of scale. For theorists Nurkse (1953) and Rosenstein-Rodan (1963), inequality is harmful to development as it interferes with the demand “spillover effect”, blocking the growth of the consumer market. For Hirschman (1958, 1992), inequality acts as a constraint on the consumer market and, consequently, on the induced effects of investment. Finally, for Furtado (1966; 1952), income concentration conditions demand and prevents an appropriate diversification of consumption and, therefore, of investments and supply structure.

Keywords:
Economic developement; Income inequality; Underdevelopment; Cummulative causation; Increasing returns to scale.