When economic development takes place, how are the benefits of growth distributed? This chapter explores various ways of determining who receives how much of the benefits.

Three general methodological points bear mention at this stage. The first is that the bulk of discussion in this book is in terms of distribution of income. Of course, the benefits of growth may be measured in other ways: by attainment of such basic needs as nutrition, by physical quality of life indicators, by health statistics, by educational levels, as well as by economic measures other than income. A large literature exists on these other indicators. Yet, without dismissing their importance, I feel, as do many other economists, that income is the single best measure of economic condition and that change in income is the single best measure of improvement in that position. Consequently, income distribution–what we mean by it, how we measure it, what we know about it–is the focus of discussion in what follows.

A second methodological point concerns the essence of economic growth. I see growth as having two kinds of components: Some persons' incomes are raised within economic sectors, and a larger proportion of persons come to be employed within the higher-income sectors. To be relevant to the distributional aspects of growth, any measurement approach must be sensitive both to changes in intrasector income levels and to the changing allocation of the population amongst sectors.