Article ID Journal Published Year Pages File Type
884217 Journal of Economic Behavior & Organization 2010 15 Pages PDF
Abstract

If relative deprivation matters to welfare in poor countries as much as it apparently does in rich ones then one would have to question the priority given to economic growth over redistribution in current development policies. We look for evidence in one of the world's poorest countries, Malawi. Using new survey questions that help address likely biases in past tests, we find that relative deprivation is not the dominant concern for most of our sample, although it is for the comparatively well off, including in urban areas. Our results strengthen the welfarist case for a policy focus on absolute levels of living in poor countries. The pattern of externalities suggests that there will be too much poverty and inequality from the point of view of aggregate efficiency.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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