INCOME INEQUALITY, WEALTH DISTRIBUTION AND SUSTAINABLE ECONOMIC DEVELOPMENT: A REVIEW OF STEADY STATE ECONOMIC THEORY FOR DEVELOPING ECONOMIES

Abstract

Ecological economists and environmental scientists have challenged the possibility of our current economic system being driven by more growth to guarantee a healthy environment, achieve human well-being and promote social equality. This issue emerged because of growing rates of environmental degradation, social breakdowns, and income inequality that have characterised the world system. In response to these concerns, Daly (1996) proposed the concept of “steady state economy (SSE)” as an alternative economic model. The concept deviates from mainstream economics, which focuses on growth. It draws attention to the need to improve the quality of life and maintain stable and sustainable resource use that is kept within the ecological limits. Using a critical review approach, I explored the relevance and applicability of this concept in developing countries. The study posits that although SSE is more suited for developed countries, some of its principles can be adapted to advance sustainable economic development in developing economies, particularly regarding income inequality.