Reasons for global income inequality

Global factors:

The main global factors that contribute to inequality between nations include:
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• Global trade system
  • high global protection in agriculture sector causes high inequality globally
    • as developing economies aren’t exporting to developed economies
• Global financial architecture
  • many advanced economies engage in short-term financial investment in emerging economies (high returns for high risk)
    • creates economic volatility → effects investor confidence & market stability
• Global technology flows
  • advanced economies have access to greater capital (robots n shit)
    • → boosts productivity

Domestic factors:

causing global income inequality:
Economic resources:
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• lack of natural resources
  • higher opportunity costs across an entire economy
• labour supply and quality
  • high population growth, poor education & health standards
    • → shit quality labour
• lack of infrastructure and capital formation
• low per capita incomes:
  • reduce overall spending and investment rate of a nation
    • → poverty cycle:
      

Institutional factors:
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• political instability and corruption → low investor confidence
• economic policies
  • Govs that tax less (due to low incomes of citizens) cant provide as much public services and social welfare
• High foreign debt:
  • → high debt servicing costs (less money other essential services)
    • → limits eco growth & development