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openness and wage inequality in developing countries

DIVERGENCE IN EQUALITY The empirical finding of convergence in the growth literature is contrary to the evidence of global divergence in the inequality literature explains the puzzle by the conditional convergence requirement that all countries share similar values for the determinants of growth and the same steady state value of longrun income per capita. In his view the strong assumptions of equality of determinant factors whose differences are the core of differential growth performance across countries and international inequality limits the usefulness of conditional convergence. Heterogeneous development has given rise to uneven and complex regional convergence and divergence in GDP per capita and growth rates increases the world inequality which are driven by international or between country inequalities. To narrow global inequality it is required that a sustained acceleration in the rate of economic growth of low and middle income regions combined with the decline in domestic or within country inequality to improve the welfare position of the world’s poor. 5 It is pointed out by that income inequality exploded since the early 19th century. This evolution is essentially due to the increase in inequality among countries or regions of the world. The contribution from the between country component have more impacts on the world distribution of income inequality than the within country component. This is also confirmed by Bourguignon and Morrisson (2002) who find evidence of convergence process among European countries but also divergence among regions and an increasing concentration of