Question

What are the reasons for unequal distribution of income? List at least six reasons.

Answer 1

The Reasons for unequal distribution of income are as follows:

Economic:

• Bad policy making (taxing system, monetary system, productive infrastructure, market intervention, etc)
• Low capacity of states to drive distribution
• Unbalanced/unchecked capitalism
• Urbanization (centralization vs decentralization)
• Education (Free, efficient and productive)
• Welfare and labor systems (minimum wage, the elderly, the sick, and the disabled, retirement and pension, etc)
• Lack of opportunities (Foreign direct investment, international relations and programs, import and export dis-variance)
• Accuracy of data collection and analysis system
• Inflation
• Unemployment
• Tax evasion
• Corruption and smuggling
• Greater Burden of indirect taxation or regressive tax structure

Political:

• Political will
• Lobbying and corruption systems
• Power dynamics

Social :

• Traditional Identifications or categorization; (Ethnicity, age, perceptions on job categories)
• Gender perceptions Area Destabilization (hostilities, conflict or war)