Within-Country Income Inequality in Multi-decade Scenarios

The research argues that within-country income inequality is driven more by socio-political institutions and state ideology than by economic development or market forces. By integrating Chakravorty's qualitative model of state regimes (extractive, redistributive, and reinvestment) with the quantitative Selectorate theory, the author develops a model where the size of the 'winning coalition' and the bias toward redistribution versus reinvestment serve as primary predictors of the Gini coefficient. Empirical testing using data from 1970-1990 shows that the size of the winning coalition is a strongly significant predictor of inequality, while GDP per capita is not. The paper applies this model to 104 countries across three stylized 50-year global convergence scenarios, finding that redistributive regimes yield the lowest inequality and extractive regimes the highest.

• The author argues that economic development, as represented by average income, does not explain income distribution, noting that the classic "inverted-U" hypothesis has been largely abandoned because it failed to account for rising inequality in OECD countries and stable inequality in the "Asian Tigers".
• The paper posits that political and social institutions are more critical determinants of income distribution than market forces or skill-biased technological change.
• According to the integrated model, state ideology is categorized into three regimes: extractive regimes (high between-group inequality, low to moderate within-group), redistributive regimes (low to moderate inequality for both), and reinvestment regimes (high between-group inequality, moderate to high within-group).
• Empirical regression analysis indicates that the size of the winning coalition (winning.cln) is a strongly significant predictor of inequality; a change from zero to one is associated with a decline of nearly ten percentage points in the Gini coefficient.
• The model finds that ethnolinguistic fractionalization (elf) is a statistically and substantively significant factor that increases income inequality.
• Testing against data showed that income variables, specifically GDP per capita, were not significant predictors of inequality, with t-statistics close to zero.
• In stylized 50-year global convergence scenarios applied to 104 countries, the redistributive scenario produced the lowest levels of inequality, while the extractive scenario produced the highest.

APA

Kemp-Benedict, E. (2010). Within-Country Income Inequality in Multi-decade Scenarios. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/sei-workingpaperus-1002.pdf

Chicago

Kemp-Benedict, Eric. Within-Country Income Inequality in Multi-decade Scenarios. Stockholm Environment Institute, 2010. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/sei-workingpaperus-1002.pdf.

Wikipedia

{{cite report |last1=Kemp-Benedict |first1=Eric |title=Within-Country Income Inequality in Multi-decade Scenarios |publisher=Stockholm Environment Institute |date=16 March 2010 |url=https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/sei-workingpaperus-1002.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kempbenedict2010withincountry, author = {Kemp-Benedict, Eric}, title = {{Within-Country Income Inequality in Multi-decade Scenarios}}, institution = {Stockholm Environment Institute}, year = {2010}, month = mar, url = {https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/sei-workingpaperus-1002.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }