The global diffusion of inequality since 1970

Abstract

Since 1970 income inequality has been stable or rising in almost every country in the world. It has not, however, risen at the same time or at the same rate throughout the world. This suggests the globalization, skills premium, and technological change explanations that prevail in the economics literature are likely incorrect, since all of these processes should in principle have relatively uniform global impacts. Instead, the timing and geo-cultural patterns of rising inequality bear the hallmarks of a diffusion model. Inequality has not arisen simultaneously around the world; it has "spread" from country to country in recognizable and sensible patterns. The diffusion model offers a simple, intuitively-appealing alternative to extraordinarily complex regression models of rising inequality. Diffusion can occur either through emulation (a macrophenomenological mechanism) or through coercion (a macrorealist mechanism). These two mechanisms are not mutually exclusive. Either or both can be used by national elites to effect major changes of policy regime. Diffusion by emulation and diffusion by coercion are two macro-level mechanisms that can be used as a template for understanding the implementation of inequality-increasing social and economic policies in diverse countries around the world. They can be differentiated through examination of the micro-level mechanisms through which diffusion occurred in specific historical cases. This injection of agency into the inequality debates requires extensive microlevel work on individual countries, but the clear existence of macro-level trends suggests that this micro-level work should be done within the context of some form of macro-level diffusion model.