Why does equity matter for development?
Some groups have consistently inferior opportunities. Within imperfect markets, inequalities in power and wealth translate into unequal opportunities, leading to wasted productive potential and to an inefficient allocation of resources. Microeconomic case studies often suggest that and inefficient allocation of resources is often associated with differences in wealth or status.
Performance is effected by:
- wealth / status > efficient allocation of resources relies on these. If wealth or status is low, systems of distribution are too.
- stereotyping > mahor effect of self-esteem and effort.
Market failures increase inequality:
- Land markets have imperfections associated with the lack of clear titling (not sure of who owns what). e.g. Ghana where women's ownership is insecure, land fallowing is less frequent. Thus the land becomes less productive.
- Human capital market: imperfect because parents make decisions on behalf of their children (education and health in particular). Investment is lower than it could be because of the devaluation of education. This, in conjunction with stereotyping and discrimination lowers self esteem and effort. This reduces their productivity and potential for individual…