Equality and Efficiency: What history teaches us about the trade-offs

By Peter Lindert

untuk memacu pertumbuhan, haruskah negara sedang berkembang menerapkan kebijakan yang membuat pemerataan pendapatan menjadi lebih buruk? Apakah negara yang menerapkan pro-growth strategies cenderung memilih kebijakan pembangunan yang memperbesar jurang antara si kaya dengan si miskin?

To promote growth, must a developing country adopt policies that make incomes more unequal? Do countries that adopt pro-growth strategies tend to choose policies that widen the gap between rich and poor within the country?

History and common sense say “no” to the first question about trade-offs. It has never been true that the only way to improve efficiency and raise GDP per capita is to accept greater inequality, and what we know about the political process says that no country must accept such a choice today (at least not yet). On the second question, history suggests an intriguing long-run evolution. In the earliest phases of economic development, the countries achieving greater growth were indeed those choosing institutions that rewarded rich groups. Yet midway through the evolution—around the year 1800 for the North Atlantic region—the countries leading the growth race became those that implemented more egalitarian (and pro-growth) policies, a choice that was always available and still is available today.