Does Redistribution Promote Human Development? The Role of Migration and Inequality

This paper revisits the long-standing debate on whether fiscal redistribution hinders or supports economic development. Utilizing data from a diverse sample of more than 70 countries over the last three decades since 1993. The analysis explores the relationship between redistribution policies and national income levels, which represents the material basis for human development and its sub-aspects. Contrary to traditional efficiency-loss arguments, the findings suggest a positive and statistically significant association between higher redistribution rates and higher per capita income. In addition to income levels, the study examines how redistribution relates to income inequality and to migration. While initial correlation analysis suggested that countries with more migrants tend to be more equal, panel regression reveals a reversed relationship: an increasing migrant population is associated with rising inequality in host countries. Ultimately, the impact of migration on inequality, as well as on other aspects of economic development, depends on how well destination countries are able to integrate migrants into their social and economic systems.