Chapter 27 Review Questions Answer Key

Inequality and Social Policy
  1. Inequality in opportunity—deemed unfair—can relate to two things: differences in social treatment or discrimination, often related to gender, race, or ethnic group; and differences in conditions in family background and resources (social class). In a “meritocratic” view, inequality of outcome due to different efforts is deemed fair (or at least not necessarily unfair), and inequality due to different opportunities is not. For example, different performances in education (outcome) are not necessarily unfair, but certain groups being unable to go to school (opportunity) is. Measurement of inequality of opportunity is more complex than measuring inequality of outcomes. Most of the existing research has focused on assessing whether inequality in outcomes is due to discrimination against certain individuals or groups. [p. 491]
  1. While the two are not unrelated, it is not necessarily the case that more unequal countries have more poor people. This depends on two issues. First, how high or low the poverty line is set relative to the average income: in the imaginary perfectly equal country it is possible that all people live below the poverty line, if that line was above the average income. In reality, some low-income countries—like China in 1978—have low inequality and high poverty rates. Second, income inequality can change without a change in poverty rates: if income shifts from the top decile to the somewhat-less-rich, income inequality improves without a change in poverty rates. Or income inequality can worsen while poverty goes down, as has been the case in China. China’s poverty rate declined from 84 per cent of the population in 1980 to 16 per cent in 2005. Poverty reduction was directly related to the very high rates of economic growth, on average 8 per cent per year during that period. But inequality rose, too: from a Gini coefficient of 0.29 to 0.42 over the same 25 years. [p. 490]
  1. Social policy is a broader concept than poverty al­leviation. There are no generally agreed upon definitions of social policy. In fact, the term “social policy” is not widely recognized in the field of development stud­ies where a number of overlapping terms exist: “anti-poverty programs and policies,” “human development policies,” “social protection,” and “social security.” Aina’s definition distinguishes social policy from social work and social welfare, which are generally regarded as more “residual” or reactive programs designed for disadvantaged groups. His broad definition focuses on the role of the state in public provision of services to the entire population. As with the different definitions of inequality, defining “social policy” is not merely a technical or academic question. For some, social policy is merely about measures to mitigate the negative consequences of markets and economic processes, such as tempo­rary crises—often labelled a “safety net” or “welfarist” approach. For others, including Aina, social policies are broader, and they create the preconditions for market processes and even for nation-building. The first argue for a minimalist state, the second for a more interventionist state. [p. 493]
  1. Economic crises often prompt or create political opportunities for new social policies. The New Deal in the US was a policy response to the extended economic crisis of the Great Depression and the visible depriva­tion of large groups of people. In a series of both suc­cessful and failed steps, this radically changed the role of the US federal state. The UK welfare state, including its national health system, was designed during World War II. In East Asia, the 1997 financial crisis led to an expansion of what had been very limited social policies. [p. 495]
  1. In many countries private spending on health care is the main player. Private spending, provision, and insurance are not usually considered “social” policy, but in practice these are part of the overall provisioning of services and hence should be part of an overall analysis of social policy. In systems of universal care, services are provided by public institutions. Service providers are usually employees in government service, and government authorities decide what services will be available. In federally organized countries, states or provinces often have a key role in setting these social policies. This can lead to complex and overlapping responsibilities, as is the case in India where Centrally Sponsored Schemes implement health and education policies, sometimes bypassing the states that should have primary responsibility for those functions. A third type of actor in provision of social services is neither public nor private, but includes various types of non-state, not-for-profit organizations. [pp. 495-6]
  1. The relationship between democracy and social policy is complex. Amartya Sen emphasized the importance of democracy and freedom of expression in preventing famine. Non-democratic governments have expanded social provisions, too, and at times have done so effectively. Social policy also can contribute to democratization, notably through education and the norms expressed in the curriculum. Democratic process and political coa­litions play a crucial role in ensuring that public finances are well managed and that they do not excessively ben­efit one group over another or distort unduly. Well-functioning political systems facilitate both the growth and the reform of social policies when they start to expand in directions thought to be unfair or ineffective. In democracies, leftist or social democratic par­ties tend to be strong supporters of progressive social policies. But non-democratic governments create social policies too. [p. 497]
  1. Global poverty has been reduced significantly over the past few decades, supported by economic growth and by policies that have benefitted poor populations directly. But inequality has increased in many countries, particularly in countries such as China where economic growth has been rapid. In other countries, notably in Latin America, income inequalities are very high, with many countries in the region having managed to bring inequalities somewhat down. In South Africa and India, social or group inequalities are a central challenge of development policy. Even in the poorest countries, inequalities matter, including those between men and women. [p. 488]
  1. The unprecedented global COVID-19 pandemic is highlighting many aspects of inequalities, and the need for a universal social policy. COVID-19 is having a disproportional impact on more vulnerable groups, migrants, people working and living in crowded conditions, working in front-line occupations. The confinement measures tend to hit vulnerable, often female, workers hardest, and the lack of safety nets is likely to have long-term impacts. In a projection in October 2020, the World Bank estimated that the pandemic in Sub-Saharan Africa may lead to a decline in 3 per cent of GDP, 40 million people may be pushed into extreme poverty, and 250 million children are impacted by school closures. OECD countries have put in place policies and measures, to support businesses and groups of people impacted by then freezing of the economy. Developing countries, equally impacted by the pandemic, do not have the capacity and financial means for this. The package of fiscal and monetary stimulus in G20 countries was on average 25 per cent of GDP (with Canada’s almost 50 per cent), and in Sub-Saharan Africa only 3.5 per cent. The lack of adequate social protection globally has been felt more strongly than ever before Support for vulnerable groups, such as migrant workers in India, and workers in the informal sector, in many cases has fallen far short. [p. 488]
  1. The Sustainable Development Goals (SDGs), like the Millennium Development Goals (MDGs) that preceded the SDGs, principally emphasize poverty reduction. SDG #1 calls for ending poverty in all its forms everywhere. It defines (extreme) poverty as living on less than US$1.90 per day. This is an example of an “absolute poverty” approach, which counts the number of people living below a certain minimum standard of living. In the SDG approach, this is a poverty line that is internationally established and comparable; countries also have poverty lines tailored to their specific circumstances. How is inequality different from poverty? Is not a country that has, say, a larger number of people below a poverty line more unequal? The answer is: it depends. The extent of equality or inequality does not only depend on how many people are poor but also on how many people are not poor, or rich. It also depends on how poor poor people are and how rich the rest of the population is. [p. 488]
  1. Inequality of outcome, put simply, refers to how wealth or well-being is distributed across a population. This can be measured in income, assets, land, health, education levels, etc. If in a population of 100 people, each person has 1 per cent of the income, this country has perfect equality; if one person has all the available income or land, this country has maximum inequality. In practice, of course, all countries fall somewhere between these extremes. A number of indicators describes inequality. The Gini coefficient is possibly the most commonly used measure. Its value varies between 0 for perfect equality and 1 for complete inequality. The Gini reflects the area between the line of actual income distribution, also known as the Lorenz curve, and the line representing perfect equality (the 45-degree line): the larger the space between the two lines, the higher the Gini. Global income inequality is estimated to be about 0.65. High-inequality countries like Brazil and South Africa have Gini coefficients of 0.60, while in many European countries it is 0.30 or lower; importantly, in the latter case, this refers to net income, after taxation. A second main measure is income shares, based on a description of populations in, usually, 5- or 10-income groups (called quintiles and deciles, respectively). If a country is perfectly equal, of course, all income groups have equal income shares: each decile has 10 per cent of the total income. In the completely unequal country, the top 1 per cent has 100 per cent of the income. Mexico and Colombia are among the most unequal countries, with the richest 1 per cent of the population holding more than 20 per cent of the total income; in Denmark it is 9 per cent (again, after taxation). These examples refer to inequality across a country’s population; as with poverty measures, it can also be used at an international level, as well as at sub-national and group levels. [pp. 489-90]
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