Inequality and Growth in a Panel of Countries - Essay Example

Economic reforms have been targeted to mitigate income inequality by the provision of aids to the poor, better job opportunities, and higher salaries. However, amidst the ardent effort of the government to curb income inequality, their efforts remain futile as figures indicate that income inequality has worsened over time. Economists have long struggled to curb income inequality through various measures. In some cases, subsidies are given to the poor that adds up as additional income to them.

Governments also pursue projects that aim to improve the livelihood of the poor like the provision of farm to market roads for farmers. Some develop the quality of education that the poor receive in order for them to qualify for higher-paying job opportunities. Still, others mandate a compulsory rise in salary level. Amidst the effort of economists to promote income equality among citizens, there has been some debate regarding the relationship between income equality and economic progress. While it is maintained that income inequality should be curbed in order to promote economic progress, "studies show that the relationship between income inequality and the rate of growth and investment is indeed robust however not linear" (Economic Inequality 9) Barro (4) argues that income inequality retards growth in less developed economies while it promotes growth in highly developed ones.

Contrary to all of this, the World Bank maintains that growth and inequality are not related at all (The World Bank Development Report 2000/2001).