Income Inequality within Countries

This chapter addresses the within-country component of global inequality and the impact of deindustrialization on national income inequality. The chapter focuses on the fourth great transformation outlined, specifically the shift to a form of immiserizing growth. This chapter revisits Kuznets’ seminal work and asks what trend might be expected for national inequality during deindustrialization. The chapter makes estimates of the empirical evidence on deindustrialization, tertiarization, and national income inequality in developing countries. The accompanying myth—that if developing countries integrate more and more into GVC world, the process will lead to broad-based economic development—is critiqued. A theoretical exposition to explain the connection between deindustrialization, tertiarization, and rising national income inequality in the developing world is given.