A paper from the IMF finds that redistribution does not damage growth, and may help it. “Lower net inequality is robustly correlated with faster and more durable growth”, and “redistribution appears generally benign in terms of its impact on growth”. This is not any great surprise. Richer countries tend to better public services and greater equality; transfer payments have limited economic effects; the evidence over many years has been that welfare does not damage an economy. However, it may be surprising that it’s the IMF saying it.
Apology: I originally posted this with a link to an older IMF paper. The link has now been corrected. PS
One thought on “Redistribution, inequality and growth”
It always amazes me how grudgingly and self-consciously the IMF acknowledges stuff like this when you compare the way in which neo-liberals ram their doctrines down our throats.
Mark Crown | Housing Project and Research Officer | Derby