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10.3. “A Necessary Given” or “Social Illness” in Society? Public Policy Perspective on Inequality

Ubaidillah Nugraha (Universitas Bina Nusantara)

Abstract

Inequality can be classified as a classical as well as a contemporary issue. It was discussed in early years and still relevant until recent time. In the 1800s, most of inequality has been caused due to “class inequality” while in the 1900s was the result of gap in “average incomes” (Wade, 2011). International Monetary Fund (IMF) mentions that inequality is a growing concern for policymakers around the word. The Economist states that this issue is the biggest social, economic and political challenge. Inequality issues are multidimensional. It is not found only in the economic point of view but also in various social settings like inequality before the law, basic liberties, opportunity and outcomes (Boston, 2013). Inequality does matter. Many people regard inequality as a synonym for “unfair” (Schillerm, 2008). Inequality would potentially destroy the landscape of society both economically and sociologically. According to Pickett and Wilkinson (2013), unequal societies are less functional, less cohesive and less economically sound that their more equal counterparts- and these weakness are felt widely. Stiglitz (2012) echoed this by referring to a less efficient and productive economy and lower trust in most of unequal countries. The other significant impacts of inequality are also captured by several studies. Reich (2011) states that inequality could undermine democracy with money transfer to political power to favour the interest of collusive elites. Several new terms describe the impact of inequality such as energy/power poverty, housing apartheid and shameful and corrosive social relations (Lister, 2011).

This paper will focus on the income inequality issue and use example of income inequality in both Indonesia and New Zealand. It will use two paradigms form suggested by Burrell and Morgan (1979) the usage of paradigm to identify the roots and how to responds to the issue by drawing policy options. At the end the main question is  whether inequality is considered “A Necessary Given” or “Social Illness” in society  and how to respond from the perpective of public policy.

Keywords: Income inequality, Public Policy, comparative public policy