Distribution and Development in Developing Countries: An Empirical Assessment

This paper examines the effect of income distribution on growth in developing countries. Based on data from the World Bank and the United Nations Development Program and the use of a sample of twenty-eight developing economies, this study finds that income distribution does not affect growth in these countries, unlike the results of previous studies conducted by Alesina and Rodrik (1991, 1994). Neither does this study find that the level of democracy in a country has a statistically significant impact on growth. Observations of findings show that the coefficient estimate of one independent variable does not have the anticipated sign due to the severe degree of multicollinearity among statistically significant explanatory variables. Regression results show that the total fertility rate, the initial level of per capita GDP, and the ratio of female to male literacy rate, taken together, linearly influence growth in developing economies. The least-squares estimation technique is applied in a multivariate linear regression. Data for all variables are from the 1978 World Development Report, the World in 2007, and the 1999, 2000, and 2007/08 Human Development Reports.