Is There a Link between Income Inequality and Economic Growth in the Balkans? Testing the Kuznets Hypothesis

This paper makes an effort to test the Kuznets hypothesis in selected Balkan countries by applying panel data regression analysis for the period 2001-2012. We analyzed the following Balkan countries: 1) EU member states – Croatia, Slovenia, Greece and Bulgaria and 2) EU candidate states – North Macedonia, Bosnia and Herzegovina, Albania and Serbia. The results indicate the existence of the Kuznets curve that is flatter at initial stages of economic development, with income inequality declining at later stages of economic growth. In addition, the EU membership is correlated to lower income inequality, indicating better redistribution efforts in these countries compared to the EU candidate countries. Keywords: income inequality, Kuznets curve, Gini index, panel data model.

Analisis Ketimpangan Antarwilayah dan Pergeseran Struktur Ekonomi di Kalimantan

Inequality is a common problem in development, including in Indonesia. The development of Kalimantan is inseparable from the problem of inequality. This study aimed to analyze the uneven development across districts and economic structure shift of 56 districts, also to prove the capability of Kuznets Hypothesis in Kalimantan during 2012-2019. This study used secondary data which was processed by Williamson Index, Entropy Theil Index, Pearson Correlation, and Shift Share analysis. The result of study showed that: (1) regional inequality in Kalimantan is high but shows decreasing trend for the period of observation; (2) inequality between regions in Kalimantan is more caused by inequality between provinces. Province of East Kalimantan provides the largest contribution towards the inequality between and within provinces; (3) There is a strong relationship between the variable of per capita GRDP and the inequality index. Meanwhile, the relationship between the economic growth variable and the inequality index is less strong; (4) Kuznets hypothesis is not applicable in Kalimantan; (5) and the economic structure of Kalimantan has shifted from the agricultural sector to the industrial sector. Ketimpangan merupakan permasalahan umum dalam pembangunan, tidak terkecuali di Indonesia. Pembangunan wilayah Kalimantan juga tidak terlepas dari masalah ketimpangan. Penelitian ini bertujuan untuk menganalisis ketidakmerataan pembangunan antarwilayah dan pergeseran struktur ekonomi di 56 kabupaten/kota, serta membuktikan Hipotesis Kuznet berlaku atau tidak di Kalimantan selama periode 2012--2019. Studi ini menggunakan data sekunder yang diolah dengan analisis Indeks Williamson, Indeks Entropi Theil, Korelasi Pearson, dan Shift Share. Hasil penelitian menunjukkan bahwa: (1) ketimpangan antarwilayah di Kalimantan tergolong tinggi dengan tren yang cenderung menurun; (2) ketimpangan antarwilayah di Kalimantan lebih diakibatkan oleh ketimpangan antar provinsi. Provinsi Kalimantan Timur memberi sumbangan terbesar terhadap ketimpangan antar dan dalam provinsi; (3) Terdapat hubungan yang kuat antara variabel PDRB per kapita dan indeks ketimpangan. Sedangkan hubungan antara variabel pertumbuhan ekonomi dengan indeks ketimpangan kurang kuat; (4) Hipotesis Kuznets tidak berlaku di Kalimantan; dan (5) struktur ekonomi Kalimantan mengalami pergeseran dari sektor pertanian ke sektor industri.

FINANCIAL KUZNETS CURVE, GLOBALISATION AND INCOME DISTRIBUTION: THE ELEMENTS OF TRIPARTITE RELATIONSHIP

This paper reexamines the empirical validity of financial Kuznets hypothesis in terms of looking for functional income distribution and economic globalisation for OECD countries over the 1980-2017 period. In doing so, the current study applies the panel fixed-effects and the system-GMM approaches to show that the estimates are complemented with the traditional assumptions on the financial Kuznets hypothesis. From a functional income distribution perspective, the empirical findings highlight the importance of financial sector development in reducing the income distribution between labor and capital. Also, the paper then provides new evidence on economic globalisation dynamics in exacerbating a more uneven distribution of income. Finally, the empirical findings imply that if any economic unit opens its borders without developing its financial sector, the labor’s share accruing in national income would be narrowed on behalf of capital over time.

ANALISIS KETIMPANGAN PENDAPATAN DAN POLA PERTUMBUHAN EKONOMI DI WILAYAH BELAJASUMBA TAHUN 2013-2017

This research attempts to understand income disparity and to identify the pattern of economic growth in Belanjasumba region at 2013-2017 years. The tools of analysis are Williamson Index, Klassen Typology and correlation curve among of economic growth and Williamson Index. Base on Williamson index found that income disparity in Belajasumba region low relative and tended to decreasing. Klassen typology analysis shows that Belajasumba region can be classified into three types: high growth and high income is Jambi, high income but low growth is South Sumatera and Bangka Belitung and high growth but low income is Bengkulu and Lampung. More importantly, findings confirmed that Kuznets hypothesis not could be found in Belajasumba.

Rural-Urban Population Growth, Economic Growth and Urban Agglomeration in Sub-Saharan Africa: What Does Williamson-Kuznets Hypothesis Say?

The study analyses the dynamic effect of rural-urban relationship, economic growth and urban agglomeration in sub-Saharan Africa with a view of testing the validity of the Williamson-Kuznets hypothesis. The study utilized panel data analysis with pooled ordinary least squares with secondary annual time series data ranging from 1970 to 2017 and sourced from the World Bank database. The study equally employed both homogeneous and heterogeneous panel unit root tests to verify the stationarity of the panel data variables before estimating the model. However, the estimation result revealed that both rural and urban population growth has a negative impact as well as a statistically significant result on urban agglomeration in sub-Saharan Africa. The result equally showed a negative impact but statistically insignificant relationship between urban agglomeration and foreign direct investment. Also, a statistically significant and positive relationship was recorded between economic growth and urban agglomeration, thereby validating the Williamson-Kuznets hypothesis in sub-Saharan Africa. Based on the findings, the study among other numerous policy recommendations calls for a critical review of policies in the economies of sub-Saharan Africa to ensure effective utilization of the foreign direct investment net inflows towards initiating more and robust development projects both in the cities and rural areas, as well as expand the provisions of the basic infrastructural facilities and development projects. This would aim to curtail any perceived and unwarranted influx to the urban areas by the rural dwellers, hence they do not contribute significantly to growth in urban agglomeration.