Income inequality in low-income countries: reasons and fundamental solutions

Abstract

This paper presents the problem of unequal distribution of income in low-income countries - according to classification of World Bank - through introducing and heavily reviewing theoretical and empirical studies. Exploring the reasons of income inequality in those countries one must assert that there are complex interactions between past and present and between the diverse political, economic and social processes, cultural values, national and external factors and institutions. Keeping in mind all these aspects of historical interaction, many scholars, researchers and policy makers suggest apparent solutions for concerning issue that are , briefly, taxing the poor less, taxing the rich more, and providing more social services for the poor, working, and middle social classes.