Inequality and Economic Prosperity: What Accounts for Social Justice and Inclusive Growth? Bertelsmann Stiftung Impulse #2015/03

Schraad-Tischler, Daniel (2015) Inequality and Economic Prosperity: What Accounts for Social Justice and Inclusive Growth? Bertelsmann Stiftung Impulse #2015/03. UNSPECIFIED.

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Abstract

There is much debate nowadays on the massive problem of rising social and economic inequalities. Many studies criticize the disturbingly unequal distribution of income and wealth – within nations and across countries. Such rising inequality often not only contradicts fundamental principles of social justice, as it undermines the idea of equal opportunity, but can also have negative effects on growth. Both dimensions – social inequality and growth – are interrelated. Only when this relationship is taken seriously is it possible to give meaning to the notion of “inclusive growth” and to attach a clear political agenda to it. Otherwise the concept remains empirically intangible and politically irrelevant. This paper will therefore first discuss the concept of inclusive growth by outlining the potential positive-sum-relationship between greater social inclusiveness and economic prosperity. It is important to see that reducing inequalities can be conducive to growth. The paper then looks at what governments could do to reduce inequalities in several key areas

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