Inequality Matters

Nancy Birdsall writes about inequality in developing countries:

where the institutions of government are weak to start with, inequality makes strengthening them harder, and in general of maintaining accountable government. That in turn makes it less likely that the government will provide adequate public services, thus reducing the economy’s growth potential. If the rich fail to support public education, for example, favoring public policy that preserves privileges even at the cost of growth, inequality not only inhibits growth given government failure (as outlined above), but itself contributes to government failure. The problem is worse in countries with substantial poverty at the bottom and without a strong middle class to demand accountability from government.