What policies and interventions have been strongly associated with changes

The overall aim of this systematic review was to identify and synthesise the empirical evidence on the impact of government policies on income inequality in low and middle income countries. Following an exhaustive and comprehensive process of searching and screening, we identified a total of 407 studies meeting our inclusion criteria, each providing evidence regarding the effect of one or more government policies on income inequality. The vast majority of these studies cover fiscal and trade policy interventions, using either an ex-post observational or ex-ante simulation study design. Among the ex-post observational studies, we found some evidence of a moderate negative relationship between government spending and income inequality, which is strongest for social welfare and other social spending, but little evidence of a relationship between trade policy and income inequality. Among the ex-ante simulation studies, we found that fiscal policy can have a large impact on income inequality, but trade policy generally has a relatively small impact. We found much less evidence on the impact of other sorts of government policies on income inequality, such as labour market reform, pension reform, privatisation, and land reform. We also found that research has tended to focus predominantly on middle-income countries.

The systematic review was commissioned and funded by the UK Department of International Development; the final report is available here. The review was carried out by a team of researchers at the School of International Development at the University of East Anglia, consisting of Edward Anderson, Maren Duvendack, Maria Jalles D’Orey and Lucio Esposito.

Speaker 

Edward Anderson is a Senior Lecturer at the School of International Development, University of East Anglia. His research interests lie in the areas of globalisation, income inequality, and foreign aid, and he has published in a range of journals including World Development, Journal of Economic Inequality, Economic Letters, Review of World Economics and Journal of Development Effectiveness. He received his PhD from the University of Sussex in 2002.