Exploring Dynamics of Inequality in Human Development

Human development is about putting people at the centre of the development debate. The human development approach traditionally goes beyond economic growth to assess human development around the world. The present paper explores how inequalities emerge, interact and persist throughout generations. It will present literature arguing that income inequality adversely affects four constitutive areas of human development that are connected to one another. Two are straightforward and from the human development concept: education and health. The third and fourth areas go beyond individual outcomes, referring to the circumstances that frame human development: social cohesion, the extent to which people trust each other and participate in the civic and social life of their communities, and peace and security, the safe environment people need to develop their full potential. The paper finds that impairments in each of these areas are not only consequences of inequality, but also create more inequalities in other areas of human development, as they are connected to each other. Moreover, inequalities are often transmitted intergenerationally and thus perpetuated. These mechanisms will be called the dynamics of inequality. Finally, the paper will outline some policy options that aim at decelerating dynamics of inequality.