Integration, social distress, and policy formation

I study the integration of regions in the form of a merger of populations, which I interpret as a revision of people’s social space and their comparison set; I illustrate the way in which a merger can aggravate social distress; and I consider policy responses. Specifically, I view the merger of populations as a merger of income vectors; I measure social distress by aggregate relative deprivation; I demonstrate that a merger increases aggregate relative deprivation; and I show that a social planner is able to reverse this increase by means of least-cost, post-merger increases in individual incomes, but is unable to counter it by relying exclusively on a self-contained income redistribution that retains individual levels of wellbeing at their pre-merger levels.


Issue Date:
2012-01
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/120179
Total Pages:
8
JEL Codes:
D04; D63; F55; H53; P51
Series Statement:
ZEF - Discussion Papers on Development Policy
No. 162




 Record created 2017-04-01, last modified 2017-08-26

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