Development and Inequality: What Can the Asian Experience Teach Us?

This study aims to throw light on the relationship between development and inequality by analyzing the Asian experience after 1950s. In the first wave of Asian growth, some Asian economies (such as Japan and the ‘Tiger’economies) experienced a relatively equal early capitalist growth/development process between 1950s and 1980. Subsequent growth however became much more unequal. In the second wave of growth in countries such as China and India, early capitalist growth/development since 1980 is associated with a sharp increase in inequality. How might one understand these different phenomena, given that there is no standard economic theory that provides an explanation? In this study, I propose to test the novel and intriguing hypothesis that these seemingly diverse phenomena can be explained by the shift in the ‘regime’ of global capitalism around 1980.