In many cases Horizontal Inequalities or inequalities among groups (HIs) persist over long periods. Where they persist 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. Consequently, this paper is devoted to understanding the determinants of socio-economic HIs over time, why they are so persistent in some cases but prove temporary in others. It does so by presenting a general 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, particularly given the asymmetric social capital between different identity groups. Case studies of HIs over time in Peru, Ghana and the United States illustrate the persistence of HIs and the reasons for this; the examples of Northern Ireland and Malaysia show that HIs can narrow sharply, given strong government interventions; some Asian immigrant groups in the US (Filipino and Japanese) have caught up without government intervention, primarily because the immigrants were selected as having high levels of human capital and they brought with them a culture of achievement. The conclusion is that 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.
CRISE Working Paper 39, 40 pp.