Why do Horizontal Inequalities (HIs) persist in some cases and narrow in others? This paper from the Centre for Research on Inequality, Human Security and Ethnicity (CRISE) explores case studies of HIs over time in different countries. It presents a framework in which complementarities between the productivity and accumulation of different types of capital tend to lead to self-perpetuating cycles of success and failure. Persistence of HIs is not inevitable, but interventions are generally needed in relation to both human capital accumulation and economic disadvantage if groups are to catch up.
Horizontal Inequalities are inequalities among groups. Where they persist over long periods, they are particularly deleterious as they trap people, generation after generation, in a situation of poverty. These conditions may also give rise to greater social instability. Case studies of HIs over time in Peru, Ghana and the United States illustrate the persistence of HIs. The examples of Northern Ireland and Malaysia, on the other hand, show that HIs can narrow sharply, given strong government interventions.
HI is different to vertical inequality (VI), or inequality among all individuals or households in a society. Individuals/families are ‘trapped’ to a greater degree with persistent HI because of the difficulties of moving across groups. The welfare cost of HI is therefore greater.
- HI is often initiated by a foundational shock such as colonialism or slavery and often lasts for centuries.
- HI is initiated by group inequalities in capital and returns to capital. However it is often perpetuated by inequality of accumulation and by differential returns across groups.
- HI traps people of certain ethnicities or races in relative poverty and powerlessness. It also threatens political stability, since cultural difference provides a powerful potential mechanism of political mobilisation.
- It can be very difficult to reduce poverty without reducing HIs, since general anti-poverty measures will not take into account the special circumstances of deprived groups.
Some groups do succeed in catching up either through strong support by policy or through their own group efforts. Policies can be effective in reducing long term HIs substantially over a fairly short period. Factors that help reduce HIs over time include:
- processes that reduce the tightness of group boundaries: These are likely to be a product of norms, culture and changing social relations as much as explicit policies.
- processes that reduce inequalities in capital accumulation: It is usually necessary to go beyond out-ruling existing discriminatory practices to affirmative action.
- processes to improve the returns to different types of capital and to outlaw discrimination.
- offsetting asymmetries in the quality of social capital: To do this, it is necessary to promote ‘bridging’ social capital for poorer groups so that more of their contacts are with the richer groups. However, this should not be at the expense of bonding social capital (contacts within groups).
- political support: The role of politics and dominant political groups is critical. The political system has to back the policies fully.