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Income distribution policy in developing countries : a case study of Korea (English)

The authors have developed a dynamic computable general equilibrium model that provides a laboratory for investigating the potential impact of various policy instruments and programs intended to improve the relative and absolute incomes of the poor. The model is rooted in an actual economy--that of the Republic of Korea. From their results, the authors conclude that policy instruments in current use are largely ineffective when used singly because the effects of even substantial governmental intervention are quickly dissipated over time, with few of the hoped for trickle-down effects. However, their results also show that if a government chooses to make anti-poverty policy the major focus of its development strategy and uses a coordinated package of diverse instruments that affect a large part of total economic activity, it can do much to reduce poverty and inequality. Such coordinated packages are feasible within the existing economic structure, though they have a major impact on the relative position of different socioeconomic groups and hence on the balance of political power within the country.


  • Author

    Adelman, Irma Robinson, Sherman

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  • Country

    Korea, Republic of

  • Region

    East Asia and Pacific,

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    Income distribution policy in developing countries : a case study of Korea

  • Keywords

    computable general-equilibrium;egalitarian distribution of wealth;gross national product deflator;primary factors of production;circular flow of income;dynamic computable general equilibrium;analysis of poverty;factor of production;structure of production;terms of trade;effects on income;categories of income;national income account;foreign trade sector;foreign trade policy;impact of policy;investment by sector;degree of poverty;wholesale price index;process of development;agricultural labor force;economies of scale;government tax revenue;Poverty & Inequality;living in poverty;alleviation of poverty;distribution of ownership;Rate of migration;short time horizon;demand for product;flow of fund;supply of credit;cost of capital;nominal investment expenditure;market clearing price;expenditure by groups;price of capital;redistribution of wealth;evidence of convergence;number of workers;partial equilibrium model;return on investment;prices of input;rate of inflation;access to job;Access to Education;share of income;economic growth rate;degree of monopoly;extent of poverty;balance of payment;rate of change;firm size;Population Growth;size distribution;household income;market behavior;traded goods;loanable fund;general-equilibrium model;world price;absolute income;functional distribution;product price;development policy;factor payment;skill category;Labor Market;product market;labor intensity;small-scale industry;import substitution;factor income;factor price;political power;distribution consequences;accounting consistency;rural-urban migration;exogenous variable;expenditure function;Trade Policies;Population Policy;institutional rigidity;market mechanism;behavioral specifications;intergenerational transfer;factor market;technological change;household category;production function;human capital;credit market;capital stock;retained earnings;finance minister;model estimation;international standard;investment good;economic instrument;international community;real cost;domestic product;binding constraint;computer center;demand pattern;institutional factor;social end;financial market;behavioral features;test case;industrialization strategy;export orient;literate population;factor supply;fixed point;programming technique;linear equation;nonlinear systems;capital accumulation;economic relationship;government constraint;wage structure;urban production;neoclassical tradition;monetary phenomenon;output model;resource endowments;behavioral parameters;household groups;consumption expenditure;dynamic adjustment;recursive functions;equity objective;dynamic development;factor share;Economic Policy;optimizing behavior;fixed proportion;farm size;computer program;investment commitment;productive sector;household distribution;household formation;expenditure decision;trade account;household level;government transfer;labor supply;linear model;recipient on account;social accounting;expenditure account;macro level;exogenous shock;government response;social tension;institutional change;demographic effect;human asset;socioeconomic systems;forecasting model;cyclical variation;commodity price;oil crisis;research design;analytical method;conventional policy;relative income;equitable development;institutional rule;government investment;monetary policy;investment policy;general development;important policy;government service;subsidized rate;foreign exchange;policy tool;parameter estimation;productive enterprise;production process;profit rate;saving behavior;agricultural worker;labor demand;standard economic;agricultural sector;Real estate;industrial production;market socialism;expenditure elasticity;market economy;retrieval system;empirical evidence;relative distribution;expenditure share;social framework;political will;paid leave;statistical agency;policy purposes;policy package;alternative program;social structure;policy program;empirical study;policy formulation;Government Accounts;equal distribution;rural income;urban income;present study;research program



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Adelman, Irma Robinson, Sherman

Income distribution policy in developing countries : a case study of Korea (English). Washington, D.C. : World Bank Group.