Economic Inequality in South Asia

Type Journal Article - Routledge Handbook of South Asian Economics, Oxon, UK: Routledge
Title Economic Inequality in South Asia
Author(s)
Publication (Day/Month/Year) 2010
Page numbers 61-75
URL http://www.ier.hit-u.ac.jp/~kurosaki/india_ineq_eg.pdf
Abstract
On August 14, 1947, the eve of India’s independence, Jawaharlal Nehru enthusiastically said
“The service of India means the service of the millions who suffer. It means the ending of poverty
and ignorance and disease and inequality of opportunity” (italic added by the author). Similar
statements can be found from other leaders of South Asian countries during that period. Here begins
the quest for South Asian nations to end inequality of opportunity. However, even today we
continuously hear similar statements in South Asia, implying that the end of inequality of opportunity
has not yet been realized.
From the view point of development economics, reducing inequality is important in
enhancing the welfare of nations for two reasons. First, reducing inequality has an intrinsic value.
Second, reducing inequality has an instrumental value for economic development --- equal
opportunity contributes to development through overcoming market failures via more equal
distribution of assets and through efficient institutions and social arrangements (World Bank 2005, Bardhan 2009). In addition, reducing inequality in economic outcomes can contribute to a rapid
reduction of absolute poverty.

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