The last thirty years in the analysis of inequality and poverty, especially in developing countries, has seen two phases-a phase of conceptual advancement, followed by a phase of application and policy debate. Both phases were exciting and useful in their own way, but the applied phase has significantly exhausted the potential of the conceptual advances of two decades ago, and new advances have been few and far between. However, there is now a need, and an opening, for a new phase of conceptual advances, advances that will make use of shifting methodological terrain in mainstream economics, and that will answer emerging policy questions that would otherwise have no easy answers (or, perhaps, too easy answers).


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