Kuznets's Inverted U-Curve Hypothesis: The Rise, Demise, and Continued Relevance of a Socioeconomic Law Author(s): Timothy Patrick

Moran Reviewed work(s): Source: Sociological Forum, Vol. 20, No. 2 (Jun., 2005), pp. 209-244 Published by: Springer Stable URL: http://www.jstor.org/stable/4540893 . Accessed: 01/01/2012 18:39
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SociologicalForum,Vol.20, No. 2, June2005 (2005) DOI: 10.1007/s11206-005-4098-y

Kuznets'sInverted U-Curve Hypothesis:The Rise, Demise, and ContinuedRelevance of a Socioeconomic Law

Timothy Patrick Moran1

This paper provides a historical analysis of the changing significance of the most influential statement ever made on inequality and developmentSimon Kuznets's "inverted U-curve hypothesis." The shifting interpretations and appropriations of the hypothesis over time-from its status as a speculative supposition in 1955, to its rise and fall as a reified socioeconomic law, to its contested standing in the social sciences today -demonstrate how Kuznets's arguments, originally advanced under more limited conditions, became transformed into overarching theoretical, empirical, and political constructions. This history suggests that even empirically grounded and testable social science models are contingent on the broader social and political contexts in which they are produced and negotiated.
KEY WORDS:Kuznets'sU-curve;income inequality;development;comparativetheory; socialscientific knowledge.

Simon Kuznets's "inverted U-curve hypothesis" is one of the most enduring and remarkable arguments in the history of the social sciences. First made public in his 1954 Presidential Address to the American Economic Association, the hypothesis, simply stated, is that inequalities first rise with the onset of economic growth, eventually level off over time, then begin to fall in advanced stages of development-thus the growth-equity relationship is characterized by a trajectory in the shape of an inverted U. At the time, Kuznets could not possibly predict that this pattern he half detected and half intuited of rising then falling inequalities would become one of the
IDepartmentof Sociology, State University of New York - Stony Brook, Stony Brook, e-mail:timothy.p.moran@stonybrook.edu. New York 11794-4356; 209
0884-8971/05/0600-0209/0 2005 Springer Science+Business Media, Inc.

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most significant consequentialpropositionsin developmentacademics and and policy. In the 30 years following its 1955 publication,the invertedUcurve was transformedacross the social sciences from a speculativehypothesis to an inevitable and unavoidablesocioeconomic"law"that provided both scholarsand policymakerswith an articulated worldviewof the nature of growthand inequality.Kuznets'shypothesisshifted the framing of income inequalityas a social problemto the examinationof size distributions, spurredthe firstworldwideefforts to collect such data, created a prolificprogramof research,and helped establishworld economic policy the at a time when policy mattered.Characterizing prevailingview at the of the U-curve'sascendancy, Srinivasan height (1977:15)calledthe hypothesis "somesort of 'ironlaw' of development." Now nearly50 yearslater,the theoreticaland empiricalstandingof the and hypothesisis still ambiguous,controversial, relevant.Accordingto the
Social Science Citation Index, in the 5 years prior to 2000, nearly 500 articles

from a wide cross-sectionof social science inquiryreferencedthe U-curve article.Withvariousamountsof fervor,manyscholarsnow aimto refutethe hypothesis,while others continueto arguein its favor.Nielsen (1994:654), for example, concludes that "despite some isolated skepticism... the existence of this curve has been well documentedfor developing societies by later research." Dovring (1991:101)underthe heading"Is the U-Curve Inevitable?"states that "the empiricalmaterialdoes, on the whole, support Kuznets'hypothesis.... [It] has withstoodthe test of time as well as that of ongoingresearch." Other scholarswritingin the last decade still refer to the U-curveas "a naturaland unavoidable(growth-equity)conflict" law"(Sundrum, or "Kuznets's (Fei andRanis,1997:324), 1990:78), justplain wisdom"(Lanticanet al., 1996:243). "conventional In this article,I analyzethe historyof the theoreticalandempirical conceptualizationof the world known as "Kuznets'sinverted U-curve,"with the aim of accomplishing goals. The study'sprimaryaim is to provide two time andplace contextto the shiftingapplications interpretations the and of how the U-curve(and by extensioninU-curvehistorically. Understanding equalityitself) fit withinlargeracademicand policy contexts,and how this fit changedthroughtime, will help us to understandboth past evaluations of the U-curve as well as the currentambiguitiessurrounding set of ara centralto many areas of currentsociologicalinquiry.Second, the guments analysishas importantimplicationsfor a broaderset of theoreticalissues concerningthe nature of social scientificpractice and its location within largersociopoliticalcontexts.In this sense, the storyof the U-curve-a theory that triumphedin certaintimes and places and failed in others, yet is still hotly contestedhalf a centuryafterits publication-is relevantto modin els of "progress" social scientificknowledge (as explored,for example,

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by Rule, 1997and Hamilton,1991)and of changein the researchfieldsthat produceit (Crane,1972;Latour,1987;Yonay, 1998). The intellectualhistory of the U-curve hypothesiscan be partitioned I into three periods.After a reviewof Kuznets'soriginalcontribution, anathe firstperiod,from1955throughthe 1970s,whenthe U-curvebecame lyze whatsociologistsof scientificknowledgecall a "blackbox"-an unproblemfor atic and largelyundisputedfact that served as a "foundation" the new In the secondperiod-from field of developmenteconomics(Fuchs,1992).2 the 1980s into the early 1990s-the unanimityregardingthe U-curve became widely challenged,leadingto a long decade of contradictory findings the and ambiguousconclusions: opening of the black box. This shift in the of interpretation the U-curveis explainedby the broadercounterrevolution in that dismantleddevelopmentalism theory and practice,and reinvented the academicand policy climatesin which inequalitywas interpreted.As of opposed to a Kuhnian(Kuhn, 1962) process of a gradualaccumulation the story of the U-curve,it is argued,supportsthe problematicanomalies, school's claim that "factsdo not speak for themselves"but constructivist are producedand interpretedwithin sociopoliticalcontexts (Fuchs, 1992; Latour and Woolgar, 1986;Rule, 1997;Yonay, 1998). The third periodfrom the mid 1990sto today-is characterized continuedcontroversies by the U-curvehypothesisresultingfromthe intellectualpersistence regarding of of old black boxes and different conceptualizations what the U-curve means as a theoretical,analytical,and/orpoliticalstatement.I concludeby of and these different"U-curves," examiningthe implications summarizing for this historiography futurework as well as analyzingthe productionand of knowledge. interpretation social-scientific
THE INVERTED U-CURVE AND SIMON KUZNETS'S HYPOTHESIS

Kuznets'scentralpurposewas to establishthe characterand causes of seculartrends in the size distributionof income, and specificallyto question whether income inequalityincreasesor decreases duringthe process of economic growth.His concludinghypothesiswas derived using a combination of sparse empiricaldata, simplisticmathematicalextrapolation,
issuesin the soci2Thereis a greatdeal of debatetodaysurrounding namingandclassification to of knowledge" referto the work ologyof sciencefield.I use the phrase"sociology scientific scholarswho researchthe internalworkingsandcontentsof science,the of the constructivist difis Thisapproach cognitively of "internal (Fuchs,1992:3). dynamics sciencein the making" fromboth "classical" ferentiatedby its practitioners sociologyof knowledge,and Mertonian sociologyof scienceperspectives.

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and pure theoreticalspeculation.Kuznets began by examiningwhat tentative empiricalevidence was availableat the time.3Using historicaldata on the size distributionof income within the United States, England, and Germany,Kuznets found that inequalitywas characterized longby term stability,before beginning to decline startingat least around 1920 (and probablysince the period before World War I). This trend was accompanied by significantincreases in real income per capita. Thus, he concluded that at advancedstages of economic development,inequality first leveled off then began to decline as these economies continued to expand. Kuznets was somewhat surprisedby these findings, noting that "a long-termconstancy,let alone reduction,of inequality... is a puzzle"(7). More specifically,he wondered how two developmental processes that economistshad long assumedto be fundamentally inegalitarian-the concentrationof savingsat the top of the income distribution, the simultaand shift from agricultural industry-could resultin conto neous intersectoral the vergingincomes.After summarizing prevailingthinkingon the former, Kuznetsdelvedmore analytically the latterpartof the puzzle.Through into a simple mathematical exercise conductedon a stylized,dual-sectoreconinto agricultural/rural industrial/urban and sectors),Kuznets omy (one split that the narrowingof inequalityobservedin these three develsuggested recentand probablydid not characoped countrieswas actually"relatively terize the earlierstages of their growth"(18). Since, accordingto Kuznets, the intrasectoraldistributionof income is necessarilywider in the urban sector than in the rural sector, a major shift in populationfrom a sector with low inequalityto one with greater inequalityincreasesthe weight of the unequal sector, thus raisingoverall however,this patternholds even if inequality.Perhapsmore significantly, the assumptionof widerinequalityin the urbansector is relaxed.If income levels between urbanand ruralsectors widen (due to greaterproductivity gains in the former), then overall inequalitywill again have to rise, even if intrasectoral inequalitiesare assumedto be the same. These two mathematicaltruismsprovidethe basisfor explainingincreasing inequalitysimultaneous with economicgrowthin less developedcountries,and lead to the of "inevitability" the growth-equitytradeoff,as many authorshave come to characterizethe "Kuznetsprocess."While either one of these scenarios alone would lead to increasinginequality,Kuznets thought that both conditionswere probablypresentin developingeconomies.
3Speaking to the quality of the data he employed, Kuznets (1955:4) characterized the results as "preliminary informed guesses." This work is subsequently cited by page number in the text.

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If the nature of sectoral imbalancesleads to widening inequality as populationshifts from ruralto urbanproduction,what causes the reversal of this trend?Kuznets'sanswerwas rooted in the dynamicsof the production process,but he also recognizedthe importanceof political,sociological, and demographic processes.Kuznetsarguedthat "the majoroffset to the wideninginequality...musthave been a rise in the income share of the lower groupswithinthe nonagricultural sectorof the population"(17). This is accomplishedthroughthe institutionaland politicalchangesinherentin "the dynamism a growingand free economicsociety."These changesinof volve shiftsin the economicand politicalexpectationsregarding "longthe term utility of wide income inequalities,"the growth of a "native"urban population"moreable to take advantageof the possibilitiesof city life in for and preparation the economicstruggle," the growingpoliticalpower of this groupleadingto protectiveand supporting legislation(9-17). In other revolutioneventuallylead to words,the dislocatingeffects of the industrial social and politicalorganizationat the bottom,which ultimatelytranslates into improvingabsoluteand relativeeconomicpositionsover time. In keeping with his unique scientificphilosophy,Kuznetswas deliberate in recognizingthe limitationsof both the availabledata and his theoretical ventures.He openly cautionedthat "no adequateempiricalevidenceis availablefor checkingthis conjecture" (19), and he prefacedhis concluding remarkswith the caveat that the invertedU-curve was based on "perhaps 5% empiricalinformationand 95% speculation,some of it possiblytainted by wishfulthinking" (26). But evokinghis genuineconcernfor the scientific Kuznetsarguedthat "aslong as (this research)is recognizedas enterprise, a collection of hunches calling for furtherinvestigationrather than a set of fully tested conclusions,little harm and much good may result"(26).4 The U-curve, however, was quickly appropriatedby practitionerswho were much less cautious,an academicprocess of which Kuznetswas well aware:
The time lag maybe long betweenthe establishment empirical of findingsandtheir into a tested theoryof reliablyinvariant patterns... But the time lag is absorption short between new findingsand their use to enrichthe background againstwhich broadcurrent Indeed,the dangeris not thatsuchfindings problemsare considered. will be used for practical purposes,but ratherthat the resultswill be eagerlyseized upon to yield a spate of hypothesesthat claimtoo muchgenerality,... (that) may providea startingpoint for distorteduse or for unwarranted dogmaticgeneralizations. (Kuznets,1961:13) 4Kuznetspracticeda distinctiveand nearlyinvariantapproachto social scientificresearch. in summarizes his excellentreviewof Kuznets'sscholarship, "The As Lundberg(1984:528) specialfeaturesof Kuznets'sanalysisare derivedfromhis attemptsto combinequantitative precisionwith total overview,includingthought-provoking speculationson differentways andmeansto identifysecularinterconnections."

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PART I: THE RISE OF A SOCIOECONOMIC "LAW" In the firsttwo decades after its publication,the invertedU-curvehypothesisthatKuznetshadcautiouslywarnedwasbasedon "95percentspec"blackbox" so widely aculation"was transformed into an unproblematic the social sciencesthatits existencewas seen as a matter cepted throughout of fact, and the processes that created it were consideredlawlike. Using the languageof Latourand Woolgar(1986), blackboxes are establishedor ordinarystatementsturnedinto universalfacts-through the "deletion of modalities"such as those identifyingtime, context, or other factorsthat bound statementsby particularities. the U-curve,such modalitieswere For removedwithinthree intersectingdiscoursesthat togetherdefinedthe academic and political consensus in the nascent field of development economics in the 1960sand 1970s:the empiricaldiscoursesurrounding newly collected socioeconomicdata;the theoreticaldiscoursesurrounding dualisand tic development; the politicaldiscoursesurrounding developmental the projectwritlarge. The U-Curveas an EmpiricalRegularity One of the most profoundand lastingimpactsof Kuznets'sarticlewas a new sense of urgencyregardingthe need to collect and analyzereliable cross-nationaldata on income inequality.Inspiredby Kuznets'spreliminaryresearch,economistsbegan to move awayfromconceivingof inequality as the functionaldistributionbetween factor shares and started to assemble data on the size distributionof personal income within nations.5 Kravis (1960), a student of Kuznets's,was the first to apply such data to the U-curve hypothesis.He found a positive (althoughcomplex) relationship between income inequalityand incomeper capita,and in generalconfirmed most of Kuznets's arguments.Oshima (1962), in a study of four Asian countries,then concludedthat althoughchangesin income distribution are not a result of economic growthper se, the relationshipis indeed curvilinearand explainedby the process of dualisticdevelopment.Using intersectoralincome distribution data collectedby Kuznets(1963) himself, conductedone of the firstquantitative Cutright(1967:578) inequalitystudies in sociologyand ended by statingthat "theeconomistmay be heartened
5This movement represents a significant intellectual shift. Although the study of personal income distributions dates back to Pareto and earlier, social scientists prior to Kuznets conceptualized inequality as differentiation between the factors of production more than people or households. In fact, many thought the latter to be an uninteresting if not unimportant social phenomena.

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that his interpretation inequalityas a functionof the level of economic of also receivedsolid empiricalsupport." development The numberof studies addressingKuznets'shypothesissurgedin the 1970s. Scholarsaffiliatedwith variousinternationaldevelopmentagencies (primarilythe World Bank) began a concerted effort to collect and consolidatesignificant amountsof nationalsurveydata, and the appearanceof severallarge aggregatesof cross-national data by the mid-1970sbegot substantialamountsof quantitative literature.6 cross-sectional opposed The (as to longitudinal)characterof this early data proved importantfor evaluations of the U-curve. During this period, in nearly every dataset and for nearly every time period, high-incomecountriesshowed the lowest levels of inequalityfollowedby the low-incomecountries,and the middle-income countriesdisplayedlevels of inequalityconsiderablygreaterthan those of the other groups.Thus when levels of economicdevelopmentwere plotted on the horizontalaxis againstlevels of inequalityon the vertical,the resultant shape was a clearinvertedU with the fittedregressionfunctioninvariably revealinga negative,statisticallysignificant quadraticterm. Although the shortcomings such data were well known at the time, and although of most recognizeda degree of scatteraroundthe curve, scholarsproceeded to take this place-in-timesnapshotand infer that the countriesformingthe invertedU-shape in cross-sectiongot to these positionsby followingan inverted U-trajectoryof rising then falling inequalitiesover time. In retrospect, Fei and Ranis (1997:324)describethis traditionof researchas "providing verificationof the seemingly incontrovertiblenature of Kuznets's cross-sectional evidence,accompanied some plausible,if loose, hypotheby ses as to its causes." Majorstudiesof the period includeAdelman and Morris(1973,1978), Ahluwalia (1974, 1976a,b), Chenery and Syrquin (1975), Jain (1975), Paukert (1973), Srinivasan(1977), and Weisskoff (1970). In perhaps the most influentialof these papers,Ahluwalia(1976b:38)certifiesthat "there is strong supportfor the propositionthat relative inequalityincreasesin the earlystagesof development,with a reversalof this tendencyin the later stages."In a rare instancewhere longitudinaldata was available,Fishlow (1972, 1973) found that the Brazilianhigh-growth"miracle"of the late 1960s and early 1970s was not egalitarianbut detrimentalto low-income groups.In the late 1970s,Ranis (1977:44)reviewedthe assembledempirical
6Themostprominent datasetsto emergeduringthis erawere compiledby MontekAhluwalia (1974)andShailJain(1975)withthe WorldBank;OscarAltimir(1974)withthe WorldBank in conjunction for with the EconomicCommission LatinAmerica;Felix Paukert(1973) and LabourOrganization; MalcolmSawyer JacquesLecaillonet al. (1984)withthe International effortby IrmaAdelmanandCynthia TaftMorris (1976)withthe OECD;andan independent (1973).

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research and concluded that "it is fair to say that the overwhelming evidence to date points in the directionof an inevitable,and rathersevere, conflictbetween most measuresof equityfor a given society and its growth performance." The U-Curveas an ImplicitAssumption While the U-curve emerged as an empiricalregularityin the early ideas do not ascend cross-national literature, plentyof seeminglyconfirmed to lawlikestatus;that is, they do not become closed blackboxes. As Yonay (1998:20)explains,it is not enough for a contributionto be recognizedas which and "valid" then set aside;it must "becomepartof a largerapparatus can be used regularly withoutneed to justify(its) use."For the U-curve,the was largerapparatus the academicand politicalconsensusthat definedthe regimefrom the 1950sto the 1970s. postwardevelopmentalist Muchhas been writtenfrom variousperspectiveson the researchand politicsof the formativeperiodof developmenteconomicsfollowingWorld War II (Datta, 1986; Escobar, 1995; Hunt, 1989; Leys, 1996; Meier and Seers, 1984;Sachs, 1976). Nearly all agree, however,to the high degree of consensusthat definedthe period.Newly identified"developparadigmatic ment economists"combineda strong practicalorientationwith real optimism that intellectualefforts to understandthe "viciouscircle of poverty" (as Nurkse (1953) famouslystated the problem)would translateinto theoreticallyinformed,state-led planningthat would yield rapid results. As Martin (1991:27)recalls,by the end of the 1950s "somethinglike a mainstreamtheory of EconomicDevelopment had emerged,"a set of propositions and a common logic of approachemanatingfrom England and the United States, rooted in classicaltraditions,that equated "development" with risingoutputgrowth,agrarian transition,and industrialization. Hunt (1989:86)calls the early developmentconsensusthe "paradigm of the expandingcapitalistnucleus,"because at the time nearly everyone agreed that the initial goal for poor countries seeking to jump-startthe was process of industrialization to nurturea class of investorsthat could labor out of agriculslowly accumulatecapital and transferunderutilized ture into industry.At the discursivecore of this paradigmwas agrarian transformation based on the concept of the dual economy, best exemplified by ArthurLewis's(1954,1958)highlyinfluential"surplus labormodel." Dualismreferredto the asymmetrical coexistenceof (andconflictbetween) a "modern"(somewhatindustrialized)sector with a "backward" (mostly sector. Accordingto Escobar (1995:78),the concept of dualagricultural) ism "pervaded developmentview of most economistsand international the for organizations severaldecades."

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In Lewis's model, later elaboratedmathematically Fei and Ranis by (1964), industrialproductionslowly expands on the basis of agricultural labor"drawnfrom surplusavailableas wage goods and unlimited"surplus the countryside.The key ingredientin this process,emphasizedby Nurkse (1953), Lewis (1954), and many others,was the role of savingsand specifito callyits relativecontribution nationalproduct.As Lewis (1954) explains,
The centralproblemin the theoryof economicdevelopmentis how to understand whichwas previouslysavingand investing4 or the processby whicha community 5 percentof its nationalincomeor less, convertsitself into an economywherevolat untarysavingis running 12 to 15 percentof nationalincomeor more.

The emphasison savingsin the dualisticframework proved important for the ascendence of the U-curve because it implied a necessary link in the early stages of development between the goal of rapid capital accumulation the need to (re)distribute and income to those who can best save and invest. This "growth-equitytradeoff"is one of the oldest tenets in economics,and it proved to be a centralidea in the early development consensus.Developmentscholarsheld a fundamental belief in the classical since wages are fully spent on consumption,the savings presumptionthat, rate of workersis always assumedto be zero. Kalecki's (1942) aphorism the tersely articulated idea: "Workers spend what they earn and capitalists earn what they spend." Since only capitalists save and invest (at least to a significantdegree), economic growth requires a change in the class distributionof control over these resources;hence, the wealth-generating advantagesof inequality are not only to be expected, but inequality is actuallyseen as a necessarypreconditionto growth(indeed,this was one of the reasonsKuznetsexpressedsurpriseat his initial findings).Inequality's role in the developmentprocessis explainedquite clearlyby Lewis (1954): "We are not interested in the people in general, but only say in the 10 90 percentof them withthe largestincomes... the remaining percentof the never manageto save a significant fractionof their income.... The people centralfact of economicdevelopmentis that the distribution incomesis of alteredin favorof the savingclass." While the growth-equitytradeoff Kuznets discovered was theoretically built into the structureof early models of development, empirical research at the time also seemed to confirm the intersectoralassumptions of Kuznets'smodel; thus, it became an intuitivebelief that the existence of the invertedU-curvecould be explainedby the problemsinherent in dualisticdevelopment.Weisskoff (1970) and Swamy (1967), for example, showed that inequalityin low-incomecountriesis generallygreaterin sector. Adelman and Morris the industrialsector than in the agricultural also confirmedthat economicgrowthusuallyproceedsin a dualistic (1973)

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fashion-growth in the industrial sector was found to be more rapid than growth in the agricultural sector. These two factors combined with and rural-to-urban rapidpopulationgrowth, migration,ensure that, ceteris in nationalincome becomes more concentrated the earlystages of paribus, and more equally distributedlater on. Robinson (1976:437) development derived the U-curve from a simple, two-sector econometricspecification of and concludedthat the hypothesisis a "necessary implication the workings of such models"(emphasisadded). Combinedwith such overwhelmingempiricalsupport,Kuznets'shypothesis thus providedan eloquent and coherent synthesisof the analytical and theoreticalconsensusesthat definedthe field of developmenteconomics in the 1960sand 1970s.It affordedan empiricallygroundedmodel of the prevailingexpectationthat intersectoral inequalitiesmustrise as surlabor moves from the countryto the city, and may only be mitigated plus in an advanced stage of development when the modern sector becomes start large enough to continue generatingcapital as wages simultaneously to rise (i.e., after the labor surplusprocess runs its course). The U-curve demonstratedthe inevitable results of dualisticdevelopment working in practice,and the hypothesiscan be seen as an importantcorollaryto this theoreticalconstruct. Some arguethat the theoreticalconsensusand the Ucurveto whichit fit combinedto form a sort of self-fulfilling developmental prophecy,as Datta explains:
The Kuznets inverted U hypothesis can be derived from the Lewis model and hence, undermining the inverted U hypothesis also undermines the Lewis model... Neither in its original elaboration nor in its prevalent implementation has the Lewis model been different in spirit or approach from the perception of the Kuznets hypothesis, so much so that in writing a critical survey Ranis (1977) himself lumped Kuznets and Lewis together in his paper. (Datta, 1986:18)

As a result of its paradigmatic "fit"withinthe largerapparatus the of developmentalconsensus,the invertedU-curve ascendedin statusuntil, as Srinivasan the state, it had "acquired force (1977) and Robinson(1976:437) of economic law." By the end of the 1970s, the invertedU-curve process considereda generalstatementof the historicalanduniverwas universally sal relationshipbetween income inequalityand economicgrowth.As early as 1974, Ahluwalia (1974:17)refers to the invertedU-patternas "a characteristicof the developmentprocessaffectingunderdeveloped countries." Frankand Webb (1977:10)call the hypothesisa "natural effect"causedby dualisticdevelopmentand reinforcedby governmentpolicy. In an influential and widely cited review of the distribution and developmentliterature in which they call the U-curve a "stylizedfact," Adelman and Robinson (1989:960)write, "The initial decline in the share of income of the poor is inevitable and arises through the introductionof a small high-income

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island in a large low-incomesea;.., overall the tendency is for inequality to increasefor a considerabletime."It is duringthis time that the scope of the U-curve'sstaturespreadsfrom developmenteconomicsto widespread recognitionacrossthe social sciences.In sociology and politicalscience, as well as economics,scholarsstoppedtestingfor the presenceof the U-curve and began to debate the relativeweight of differentindependentvariables involvedin its persistencein cross-sectional data. The U-Curveas PoliticalAffirmation The transformation the U-curve into a universal"blackbox" enof tailed a third intersectingdiscoursein which the U-curve became an imradicaland revolutionary idea portantpoliticalmetaphorin the historically that the richcountriesof the worldcould and would facilitate"developing" the formercolonies of the so-calledThirdWorld.Fromthe very startof this projectin the 1940s,the concept of developmentwas reducedto growthin income per capita.As discussedabove, developmentalthinkingquicklycoalescedaroundthe problemsof limitedcapitalaccumulation inefficient and laborand capitalallocation,and these concernscame to be regardedas the problems of development,irrespectiveof the social, cultural,or political involved.Inequalityand povertyin this worldviewwere either implications ignored,or consideredautomaticbyproducts,"undesirable" certainly,yet necessarypreconditionsand inevitable outcomes of the successfuldevelopment process. As Lewis (1976:26)flatly stated, "developmentmust be inegalitarian." But the worseningof wages and living standardswere not somehow to indeed,they peripheral the models and policiesof developmentpractice; to their inner architecture" Within the du"belonged (Escobar,1995:80). it alisticframework, was all too easy to rationalizemeasuresto hold down termsof tradein the "efficient" allocationof laborand wages in rural-urban use of profits.In this sense, the metaphorof the invertedU-curvecould be invoked, either explicitlyor by unstatedintuition,to pacify concernsover the detrimental effectsof the ideologyof economicgrowth-anything that's with economic growthwill eventuallygo away, all that's needed is wrong more growth.7 At the same time, a real (some have said naive) optimismpermeated the developmentalconsensusbased on widespreadfaith in the inherently The progressivenatureof industrialization. developmentcommunityof the
7The politicalmessageof the invertedU-curvemetaphorlives on in the various"U-curves" in existence today, includingthe environmental U-curve and the demographictransition U-curveto nametwo.

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1950s and 1960s expected quick success, and scholars and policymakers tosketchedoptimisticpicturesof steadyprogressfromunderdevelopment ward advanced,industrialcapitalism.Kuznets'shypothesispresented the calculatedmessagethat the growthprocessitself was eventuallyequalizing. or Thus high-growth towardequalpolices antithetical, at least ambivalent, ity would not condemnsociety to acceptingcurrentinequalitiesforeverof the institutional politicalchangesinherentin "thedynamism a growand ing and free economic society" would eventuallyprove to be egalitarian (Kuznets,1955:9).A commonpracticein the empiricalarticlescited above, for example,involvedsolvingthe quadratic equationsyieldingthe inverted U-curve shape to obtain "turningpoints" indicatingwhen in fact these "Much changescouldbe expected.As Kuznets(1955:17)himselfremarked, is to be said for the notion that once the early turbulentphases of indushad passed, a variety of forces convergedto trializationand urbanization bolster the economicposition of the lower-incomegroupwithinthe urban population." Thus, beyond the unquestionable impactof the U-curvehypothesisin the academy,its largely unqualifiedacceptancewas also groundedin the politics of the international policy arena.During this period, development scholarsregularly workedfor international suchas the United organizations diNations and WorldBank and often advisedindustrializing governments "enormousinfluence upon the developmentdiscourse... rectly, exerting and thereforeon developmentin practice"(FitzGerald,1991:16).
PART II: THE OPENING OF A BLACK BOX

The unanimitysurroundingthe U-curve hypothesis began to face a wide challenge in the 1980s.By the end of the decade, the interpretation of the U-curve turned from being generallyregardedas an "iron law of development"to a contentious hypothesis associated with contradictory findingsand ambiguousconclusions.At first glance, this transitionmight seem like an apt description the sort of scientificrevolutionsKuhn(1962) of described-routinized puzzle-solvingleading to the discoveryof empirical anomaliesthat could not be explainedwithinthe U-curve framework. But the reinstatementof modalitiesthat were previouslyconsidereddeletedblack box into a limited statementdethe transitionof an unproblematic on particular contexts-needs to be preceded by the deconstrucpendent withinwhichthe blackbox was seen as an essention of the widerapparatus tial foundation.In the case of the U-curve, this process was accomplished in counterrevolution developmenteconomics throughthe very un-Kuhnian that by the end of the 1980sleft the field in completeruins.

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A ParadigmDestroyed During the 1970s,the sociopoliticalclimatesurrounding development academicsand policymakingwas being completelytransformedfrom the one that emerged duringthe formativeperiod. As Leys (1996:20)characterizes the shiftingtimes, "Theworld in which Keynesianpolicy makingand its offshoots,developmenteconomicsand developmenttheory-made sense had changedfundamentally." During this decade, the developmentalistprojectbeganto drawfirefrom all politicaldirectionsfor two reasons. of First,it became increasinglyclear that the identification social progress with economic growth was not solving the long-standingproblems of inequality and poverty as the early developmentalmodels had predicted. Fishlow's (1972, 1973) celebrated finding that the Brazilianhigh-growth was to "miracle" inegalitarian such an extent that the poor (and especially the ruralpoor) had become worse off despite rapidgrowth,was followed by Bardham's(1973)study,whichfound the same effect in India.Second,a series of politicaldisastersoccurredin the ThirdWorld,rangingfrom civil wars in Africa to the spread of violent militarydictatorships throughout Latin America, and these were taken to be, in the words of one development pioneer,"clearly somehowconnectedwith the stressesand strainsaccompanyingdevelopmentand 'modernization' (Hirschman,1981:23).In " was short, developmentalism not working,and by the end of the 1970sthe postwardoctrineof ThirdWorlddevelopmentwas being both "destroyed" fromwithinand "radically redefined" (ArrighiandSilver, (Martin,1991:52) 2000:24)from outside. The initial response within the development communitywas not to abandonthe field but, ironically,to enlargeit throughinternalself-critique. The meaningof developmentwas expandedto includenew objectivessuch as social welfare, environmentalprotection, and women's rights, and in the early 1970sthe Robert McNamara administration introduceda poverty no at the WorldBank.Accordingto this new approach tradeoffwas agenda between the goals of output growthand worseningsocial condinecessary tions such as inequality;the fruitsof growth,it was now thought,could be withouteffectingfutureeconomicperformance. 1974, In better distributed Hollis Cheneryand his associatesat the WorldBank wrote Redistribution with Growth,a seminal culminationof work under the new World Bank approachthat ultimately "changedthe course of development thinking" (Bruno and Pleskovic, 1996:2).Chenery and his colleagues attemptedto refocusthe field on the need to allocatea greatershareof investmentgains into formsthat would benefitthe poorest groupsin society. But, as Korzeniewiczand Smith(2000:30)explain,"No clear and generally acceptedframeworkhad been establishedas yet for these concerns;

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... the Bank's staff was only weakly committedto the McNamaraagenda, and even the institution'sknowledge about poverty, inequality,and possible policies was limited."Thus, despite internalreevaluationswithin the development orthodoxy,the black box of the invertedU-curve remained with Growth closed. The theoreticalframeworkunderlyingRedistribution so much a refutationof the "ironlaw," but a tacit acceptanceof was not it. Since income distributionshows a naturaltendency toward increased polarizationin the firststages of development,Chenery'sgroupwas left to argue that policy could make a differencein speedingthe Kuznetsprocess 1996;Fishlow,1996).In a separateseries of papersby along (Bourguignon, Ahluwalia MontekAhluwaliaandothersat the WorldBank (1974,1976a,b; et al., 1979), often reprintedand widely cited throughoutthe field, the Ucurve hypothesiswas still understoodto be a centralconstruct.Regarding the policy implicationsof this series, Anand and Kanbur(1993b:20)say, "In an influentialliterature,these have become influentialpapers."Based on this research, the World Bank adopted the inverted U-relationship in the late 1970s and early 1980s to make projectionsof inequality and poverty to the year 2000, and publishedthese forecastsin the 1978, 1979,
and 1980 World Development Reports (Anand and Kanbur, 1993b).

Lackingthe means for effective implementationas well as experiencing "oppositionto its aims by a broad range of actors,"the McNamara agenda was rapidly dropped in subsequentWorld Bank administrations (Korzeniewiczand Smith,2000:31).Worse still, the very concept of development as an intellectualand politicalprojectwas in deep crisis.The field vocal criticismsfrom the old guard(Bhagwati, faced not only increasingly in 1989;Lewis, 1984;Sen, 1983;Stern, 1989;and the variouscontributions Meier and Seers, 1984),but also causticattacksfromprofessedcriticswith
titles such as The Poverty of "Development Economics" (Lal, 1985), and Development Economics on Trial (Hill, 1986). While some were character-

izing the field as being merely at an "impasse"(Booth, 1985;Schuurman, 1993;Sklair,1988;Vandergeestand Buttell, 1988),others,includingprominent formerpioneers,were writingobituariesof the developmental project 1981;Seers, 1979).In short,the old consensuswas "witnessing (Hirschman, its progressivedissolution"(Escobar,1995:94). What came to be known as and "world-systems" "dependancy" perspectivesprovidedalternativeconof the problems(and possibilities)of nationaldevelopment ceptualizations and industrialization, became penetratingcritiquesof mainstream and deThe field was growingcognitivelyfracturedand invelopment orthodoxy. creasinglycontroversial,and "development"was becoming "a shapeless, amoeba-likeword"(Sachs,1990:109). It was againstthis backdropthat the neoliberalcounterrevolution in the 1980s effectively ended internal efforts to recast the developmental

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projectin whatbecamea motivateddestructionof all that the developmental regimehadcome to be (ArrighiandSilver,2000;Leys, 1996;Toye, 1993). As Arrighiand Silver(2000:21)argue,"Thiswas no Kuhnianscientificrevolution.It was a strictlypoliticalcounterrevolution." as the birthof deJust velopmentin the 1940sdid not resultfroma naturalprocessof scientificadvancements,neitherwas its death hastenedby theoretical,institutional,or that methodological"progress" somehowuncoveredproblemsand eventudealt with them. Both were radical,politicalresponsesby powerfulacally tors in the capitalistworld-economy. the end of the decade,the research By and practiceof developmenteconomicsquicklywent "frompromisedland to wasteland"(Arrighiand Silver,2000:11),until the field became "a ruin in the intellectuallandscape" land" (Sachs,1990:2),a "mined,unexplorable (Esteva, 1992:22). The originsandprocessesinvolvedin the neoliberalcounterrevolution, and the consequentcollapse of the postwardevelopmentregime,have not been the subjectof much scholarlyinquiry,and the full explanationis obviously beyond the range of this study.8Scholarshave largely focused on the effects of the transformation, for our more limited purposeshere and it is enough to analyzehow changesin the broaderapparatus whichthe in U-curvepreviouslyfit (in this case the completerejectionof the apparatus) in producedchangesin the way the U-curvewas interpreted theoryand apin practice.The developmental that emergedin the postwar plied paradigm period had formed,as Escobar(1995:40)describes,a "systemthat allowed the systematiccreationof objects,concepts,and strategies... [and]defined the conditionsunderwhichobjects,concepts,theories,andstrategiescan be into the discourse." The counterrevolution incorporated destroyedthis sysof tem, allowingfor the reinterpretation its componentparts-the opening of previouslyclosed blackboxes. Questioningan EmpiricalRegularity Beginning in the 1980s, scholars began finding difficultieswith the overwhelmingempiricalsupport the U-curve received in the 1960s and
Arrighiand Silver(2000) 8Therehave been a few attemptsto explainthe counterrevolution. attributethe events to a concertedpoliticalmovement,led by a radicalchange in United States militaryand financialpolicies, to respondto the hegemoniccrisis of the 1970s and (re)consolidatethe establishedhierarchyof global wealth. Cockett (1995) emphasizesthe role of a handfulof economistsin slowlydevelopingneoliberal/anti-Keynesian doctrineuntil materialforces(similarto those emphasized Arrighiand Silver,2000)changedin theirdiby rection.Similarly Sklair(1997:524) was arguesthatthe counterrevolution a "socialmovement led class." for capitalism" by a "transnational capitalist

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1970s.This empiricalincrimination based on two interrelated was critiques that combinedto reveal the U-curve to be a sort of "empirical mirage"-a self-contradictory pattern often visible in cross-section(and with certain data and methods) while simultaneouslydisappearinglongitudinally(or with other data and methods). One line of argument focused on the reliability of the cross-sectionaldata itself in light of wide intercountry variation in data-collectionmethods, and possible measurement errors resulting from systematicreportingbiases (e.g., Gagliani, 1987; Nugent, 1983). As a group, the inequalityestimates assembledin the 1970s were associatedwith large inconsistenciesin variabledefinitionsand collection techniques renderingcomparabilitybetween countries (and often within countries over time) suspect at best. Plagued by severe limitationsin the documentationof secondarysources and accuracyof the data, inequality frominformedguessesbased on national estimateswere often extrapolated or established using surveys conducted on nonrepresentative accounts, subsets of the national population (e.g., taxpayers, or urban residents only). On many occasions,it was not altogetherclear who conductedthe Saith (1983:367)used originalsurveyor how it was actuallyadministered.9 Ahluwalia's (1974) materialto argue that the inverted U-curve has only been confirmed becauseof statistical difficulties, notingthat "evenmarginal in variations" availabledatasetslead to the "virtualdisappearance" the of inverted U-curve. Fields (1984a) conducted a similar reevaluationusing Paukert's(1973) data, and againvoiced considerabledoubt concerningthe commonalityof the U-curvefindings. Another critical track concerned the use of cross-sectionalresearch because historidesigns to infer longitudinalpatternsof change.Primarily cal information lacking,empiricalresearchfollowingKuznetsreliedon was methodsthat entailed "(1) measuringthe relativelysimple,cross-sectional of inequalityin each (country),(2) measuringother characteristics degree of each country(e.g., level of GNP, rate of growth,importanceof agriculture in total product,etc.), and (3) relatingthe level of inequalityto that economy'scharacteristics, usingcorrelationor regressionanalysis"(Fields, The idea was to take these place-in-time 1980:59). snapshots,almostalways depictingan invertedU growth-equity pattern,and infer that the countries
of 9Overtime these datasetsgrew into jumbledconfigurations differenttypes of aggregated estimates.Importantdefinitionaldifferencesbecame blurredor forgottento the point of the across(and often within)countries.For example, rendering datavirtually incomparable Paukert's(1973:124) of widelyused datasetis basedon a compilation 44 countriesproduced He by Adelmanand Morris"as set forth in variouspapersby these authors." then deletes four countriesin whichdata were "so bad that they were unsuitable," replaces3 countries with "superior data from other sources,"and adds information 19 countriesfrom new for sources.

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formingthe curvilinear shape in time t, got to these positionsby following the path of the U-curvefrom some time to.10 These procedurescame underheavy criticismin the 1980sand in time becamethe targetof one of the most damagingcritiquesof the U-curvehypothesis (Datta, 1986;Fields, 1980, 1984a;Gagliani,1987;Papanek, 1978; Saith, 1983;Stewart,1978;Sundrum,1990). The argumentwas that while an inverted U-curve might accuratelydescribe the growth-equitytrajectory of the three nations included in Kuznets'slongitudinalanalysis,and even though such a curve might also be observed in cross-sectionaldata, the actualpath of changefor most countriesmightnot be accurately represented by the U-curvemodel. As Gagliani(1987:323) explains,"Theavailable cross-sectionalscattermight perfectlyfit an increasing450 line while each countryis silently moving along a 450 decreasingone." Or as Tilly (1984:35)arguesmore broadly,"Thereis no logicalconnectionbetween the countriesand the differences sequenceof change ... followedby individual that show up in cross-section." Some maintainedthat the U-curve representedcross-regional op(as variationin inequalitystructures, arguingthat the posed to cross-national) U-curve is little more than a depiction of averagesamong groups of similarly developed countries (Fields, 1980). Papanek (1978:265)recognized that, instead of curvilinearshape existing acrossthe entire sample, "there are probablyfour groups of countrieswith differencesin averageincome analysisan per capita and inequality,which may permit in cross-country invertedU form to be imposed upon the data."Papanek'sfour groupings were developednations,EasternEurope,rawmaterialexporters,andother LDCs, but this observationalso applies to clustersof nations groupedby (see, for exgeographicregion and/orby similarinstitutionalarrangements and Kyn, 1987;Sundrum,1990). Lecaillon ample, Fields, 1984b;Papanek et al. (1984) furtherobservedthat small variationsin sample composition, or minor adjustmentsto individualobservations,can make the U-curve statistically disappear. Given the purposesof this study,it is interestingto note that these empiricalcritiqueswere well known yet overlooked in the decades in which the U-curve gained ascendence.Researchersoften recognizedthe seemesnatureof the growth-equityrelationship, inglyrandomand insignificant within the left-handportion of the U-curve pattern. Ahluwalia's pecially with Growth,for example, analyzes (1974) contributionto Redistribution 13 developing countries in the 1960s and finds that as many countries
scholars wereworkingwithina well-established that 10Previous practice pioneeredat Harvard drewlongitudinal inferencesaboutdynamic growthprocessesfromjoint estimatesthatintewith cross-section data (see Chenery,1960;Chenery gratedlimitedtime-seriesinformation and Syrquin, 1975;CheneryandTaylor,1968).

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experience declining inequality (6) as rising, with 1 showing no change. He then concludes(1974:13)that, "the scattersuggestsconsiderablediversity of countryexperiencein terms of change in relative equality ... [and] there is no strong pattern relating changes in the distributionof income to the growthof GNP." Moreover,the relationshipbetween cross-section and time-seriespatternshas long been debated (with broaderimplications thantestingthe U-curve(see, for example,KuhandMeyer,1957),andthese debates were also well known to researchersof the 1960sand 1970s.They knew the limitationsof cross-national data,as Srinivasan (1977)statesin his "Thereare well-knowndifficulties with interpreting projectinga and study: cross-sectional over time."Kuznetshimselfwarnedin the late relationship 1960s:
The valueof such(cross-section) evidencefor generating somepreliminary hunches cannotbe denied.But unlessinnovational changescan somehowbe taken onto accountin the use of cross-section dataproper,use of its resultsmaylead to erroneous inferencesconcerning in past changesin structure the processof growth.And the same applies,paripassu,to application cross-section of into analysisto projections the future.(Kuznets,1966:436)

Whenthe blackbox was being closed,these critiqueswere overlooked, often mentionedin footnotes and as asides,and modalitiessurrounding the U-curve continuedto be deleted. Not until the social and politicalclimate shifted did these same critiquesbecome accepted;they were moved out of footnotes and into central arguments,and modalitiesbegan to be added back on. This suggests, as the constructivist school claims, that the value and meaning of empiricalevidence is not objectivelygiven but in some context withinwhichsuch ways is also contingentupon the time-and-place evidence is being producedand negotiated.
Shifting Theoretical Discourse

Remarkableshifts in the broader social and political context led to intellectual shifts in the ways inequality was being conceptualized,thus bringingchanges to the realizationof the U-curve and its academic and policy relevance.New debates emerged outside of economics aroundthe relative importanceof social and political factors effecting growth-equity processes. Some investigatedthe impact of differentialaccess to education (e.g., Meyer, 1977; Milner, 1987;Teachman,1983). A different line of interpretationemphasizedthe importanceof nondemocraticforms of political rule in promoting greater inequality (e.g., Muller, 1985, 1988, 1989; Simpson, 1990; Stewart, 1978). This perspectivewas challengedby a group of scholarsanalyzingthe impactof democracyon inequality(e.g.,

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Bollen and Jackman,1985;Jackman,1974;Rubinson and Quinlan, 1977; Weede, 1982;Weede and Tiefenbach,1981).Still anotherseries of debates developed aroundthe issue of economic dependencyand a country'sposition in the structureof the world-economy.Some argued that the dynamics of "dependentdevelopment,"most often operationalizedas the degree of multinationalcorporationpenetration or the amount of foreign direct investment,promotes inequalityin noncore economies (e.g., Bollen and Jackman,1985;Bornschier,1983;Bornschierand Ballmer-Cao, 1979; Bornschierand Chase-Dunn, 1985; Chase-Dunn, 1975; Evans and scholarsquestioned Timberlake,1980;Rubinson, 1976).11 World-systems the utilityof conceptualizing growthand inequalityas a national-levelphenomena in the firstplace, arguingthat the axial division of labor between zones of the capitalistworld-economy the key procore andperipheral was cess generatingand reproducing inequalities. In the shiftingacademiclandscape,inequalitywas no longerconceptualized as a black box simplistically mechanicallygeneratedby growth and it was a social problem that itself needed to be theorized. Reprocesses; gardingthe interpretationof the U-curve, this opened to question more specificallythe twin metaphorsof the U-curve argumentas developed in the previoustwo decades:(1) that a growth-equitytradeoffis economically and necessaryat low levels of development; (2) that growthprocesseseventuallyreducethis inequalityat advancedlevels of development. The firstof these theoreticalchallengeswas generatedby the discovery of the East Asian developmentexperience.In 1979,Fei et al. publishedtheir
influential volume Growth with Equity: The Taiwan Case, a study that raised

the lid on what would later be called "the East Asian Miracle"(Birdsall et al., 1995;Findlay and Wellisz, 1993;World Bank, 1993). The development experiencesin East Asia were particularly challengingto the U-curve In the last half of the twentieth century,these were the only hypothesis. to poor countriesactually"developing" any significantand lastingdegree, Yet and they did so via dualisticrural to urban industrialization. the deof East Asia largelychallengedthe theoreticalasvelopmentalexperience dualisticdevelopmentandshowedwhy, sumptionsKuznetsmaderegarding the U-curveprocessfar frominevitable,could be altogetheravoidable. UnderlyingKuznets'soriginalanalysiswas an importantpresumption that the industrialsector is the only dynamicsector in the economy. Contraryto what Kuznets (and other scholarsof that time) thought,development in East Asia showed that intersectoraltransitionscould lead to rising
11Yet this argument was actively disputed by others (Weede, 1980; Weede and Kummer, 1985; Weede and Tiefenbach, 1981; and later by Crenshaw, 1992; Firebaugh, 1992; and Simpson, 1990).

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sector and fallingurban-rural incomes in the agricultural inequalities.Fei to et al. (1979)foundthe most important contribution Taiwan's"equitywith agricultural output mix, growth"phenomenonwas a more labor-intensive activities. combinedwith a tremendousexpansionof ruralnonagricultural These factorstogetherdisprovedKuznets'sassumptions demonstrating by to activities "does not that: (1) A shift from agricultural nonagricultural to have to entail a shift from a more equal distribution a less equal distrisector are bution if output mixes and technologies in the nonagricultural the poorest and landless labor-intensive, becomingincreasingly absorbing and (2) income levels in the ruralsector could farmers"(Ranis, 1996:51); and improvewith growth(as a consequenceof risingproductivity increaslabor-intensive technologies). ing confirmed WhatFei et al. (1979) found in Taiwanbecameincreasingly when the broader"miracle" analyzedas a more regionalphenomenon. was In six of the Asian economies experiencingrapideconomicgrowthduring the last half of the twentiethcentury-Indonesia, Japan,Korea,Malaysia, and sectorswere substantial highly Thailand,and Taiwan-the agricultural land ownershippatterns(Indonesiaand dynamic.12 Traditionally equitable Thailand) or extensive land reform (Korea and Taiwan) allowed for initially equitableruralsectors (Berry and Cline, 1979), while wide adoption of Green Revolution technology,high investmentsin ruralinfrastructure, and limited taxation of agriculture meant that ruralincomes and producin East Asia than in other regions.As a result,rutivity rose more rapidly inral incomes actuallyimprovedwith industrialgrowth,and urban-rural in most other developing come differentials were smallerin East Asia than economies.13 The East Asian experiencewas not kind to the labor surplusmodel, nor the concepts of dualisticdevelopmentand the growth-equitytradeoff upon which it was based. Theoretically,the concept of inequalitybecame inverted.Thinkingof inequalityas a necessaryand unavoidableside-effect of growthgives way to a transposedrelationshipwhere initial distribution of assetsdetermines(or is at least a preconditionof) futureratesof growth. Instead of generatingwealth accumulation, in the dualisticmodels, inas is now seen as growth-adverse. Varioustheories now seek to capequality of the ture this phenomenon,whetherby emphasizing unequaldistribution
12HongKong and Singaporeare two countrieswithinthe "EastAsian miracle"that almost sectors. entirelylack agricultural in to between1965and 1988, 13According Turnham (1993;reproduced WorldBank,1993:34), to incomesgrewat an averageannualrateof 3.2%in EastAsia (compared 2.4% agricultural in South Asia, 2.3%in LatinAmerica,and 1.9%in sub-Saharan Africa),and productivity roseby 2.2%on averageannually to (compared 0.6%in SouthAsia, 1.55%in LatinAmerica, and0.3%in sub-Saharan Africa).

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land, unequal investmentsin humancapital (especiallyeducation),or the instabilitygeneratedby conflictover distribupoliticaland macroeconomic tional issues. While the East Asian model fundamentally changedthinkingaboutinand dualisticdevelopment,a secondtheoreticalchallengecame via equality changingpatternsof inequalityin the developed world. In what has been called the "greatU-turn,"long periods of convergingincomes in several wealthy nations have ended, giving way to a significantresurgencein inequalities (Atkinson, 1995;Danziger and Gottschalk,1993;Harrisonand Bennett, 1988).While there is some debate on the extent to whichthis phenomenon extends beyond the United States and Great Britain, the idea that equalitycould worsenin developedeconomiesunderminesthe second Kuznets metaphor,that "the dynamismof a growing and free economic and society"is fundamentally unendinglyegalitarian. The theoreticalargumentsused to explainthis effect emphasizeshifting patternsin the location and dynamicsof industrial productionand the terms of internationaltrade.More broadly,so the consensusgoes, the dynamicsof technologicalchangehave resultedin the "deindustrialization" of wealthycountriesand the simultaneousrise of a new skill-driven economy in which high-valueinformationand technologicalservices replace highas volume manufacturing the leadingeconomicsector.This shift in leading alteredthe relativedemandfor and supplyof skilled sectorshas drastically and unskilledworkers,generatingdownward pressureson the wages of the while dramatically returnsto the skilled, thus creatunskilled, increasing ing a newly polarizedearningsdistribution(Bluestone and Harrison,1982; Bound and Johnson,1992;Katzand Autor, 2000).
PART 3: U-CURVE(S) IN THE TWENTY-FIRST CENTURY

(This) study'sfindingsoffer broadsupportfor Kuznets'shypothesis. -Randolph and Lott (1993)

The empirical status of the Kuznets hypothesis in ... multicountry

contextsremainsunsettled. -Ram (1997) The Kuznetscurveis fiction. -Rodrik (1998) What are we to make of Kuznets'sU-curve hypothesistoday? Have 50 years of continuous intellectual attention resulted in any substantive

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of progressregardingthe general applicability Kuznets'sarguments?Obsuch an evaluationdependson one's idea of "progress," if value yet viously is measuredsimplyby the power of theoreticalinsightsto outlast the social and intellectualcontexts in which they arise, Kuznets'shypothesisis statementsin the social sciences. certainlyone of the most extraordinary As the quotations above signify, contention still exists surroundingthe both the lastingintellectuallegacyof Kuznets'scontriU-curve,illustrating bution and the lingeringallureof its intellectualand policy interpretations. As describedabove,shiftinginterpretive climatesopened the U-curveas an "blackbox."Yet the theoreticaland empiricalscrutinythat unproblematic resulteddid not lead to the abandonment Kuznets'sideas,but to the creof The U-curvenow means differentthingsto difation of many "U-curves." ferent communitiesof scholars,and its status thereforeremainscontested and relevantacrossthe social sciences. The continueduncertaintysurrounding U-curve in the academic the in literatureis mirrored its mixedapplication policycircles.In an influenby tial reporton inequalityin LatinAmericaproducedby the Inter-American DevelopmentBank (1998:2),U-curveprocessesare still presentedas "frustrating"necessities on the "tortuouspath" of development-that is, until the long-runoptimismof the U-curve can be evoked: "It has long been at acceptedthat economicdevelopmentworsensincome distribution, least in the early stages.... After a certainpoint, the relationshipbetween development and equalityis a win-win situation,but until then, results can be frustratingat best." Yet elsewhere the World Bank (2000:15),once a devout adherentof the U-curve, now concedes that "[e]videncefrom recent decades has not validated [Kuznets-based theories], and it now apthat growth,equality,and reductionsin poverty can proceed pears likely together." Findingthe EmpiricalU-Curve assessments Despite the empiricalcriticismsin the 1980s,quantitative of Kuznets's hypothesis have continued uninterruptedand undeterred. Notwithstandingthe sheer volume of articles addressingthe inverted Ucurve (or perhapsbecause of it), researchers continueto produceambiguous empiricalfindingsand contradictory assessments.Some are continuing the traditionof Fields (1980) and Robinson (1976) by attemptingto model form"of Kuznets'shypothesis,includingeconometricconthe "functional ditions for a turning point in the inequality-developmentrelationship (Anad and Kanbur,1993a;Galor and Tsiddon,1996;Glomm and Ravikumar,1998;andRam, 1995).Manymore applyvariousregressiontechniques

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to assortedcross-national samples.Of these, Dovring(1991),IADB (1998), Jha (1996), Randolph and Lott (1993), Milanovic(1994), Nielsen (1994), and Nielsen and Alderson (1995) continueto advocatethe existenceof the while Fishlow(1996),Bourguignonand Morrison U-curvecross-nationally, Lanticanet al. (1996), and Ogwang (1995) offer more cautious or (1998), mixedsupport. People continue to find empiricalsupportfor the U-curve for three of reasons.First,no consistentcriteriaexistsfor whatsignifies"support" the termin regressionmodels?Or a squaredquadratic U-curvehypothesis.Is it variablemeantto capturedualisticdevelopment?Is a statistically significant it any indicationthat inequalityhas increasedin less-developedcountries? Or evidence of an up and then down inequalitytrajectoryin any growth context?For example,Lanticanet al. (1996) find evidence for the U-curve in urbanbut not ruralareas, and in primarybut not secondaryschool enrollment.Bigsten (1986)findsinequalityrisingthen fallingin Kenya,before againrisingthen falling. The second source of empiricalsupport,initiallyexplainedby Fields (1980) and recently reconfirmedby Anand and Kanbur (1993b), is that employedto test the hypothesis(includingdata quantitativespecifications sources,samplecomposition,time period,accompanying independentvariables, and regression techniques) determine the findings. The inverted U-curve relationshipis inconsistentwith respect to econometricspecification, and statisticallysignificantU-curve-relatedparameterestimates can still be derived in various cross-nationalsamples.For example Ogwang's (1995) support for the U-curve varies by both the inequality and development indicatorsused. Deininger and Squire (1996:571)conclude that analysesof past aggregationsof data, where comparisonsare made without regard to consistent definitions,"could lead to virtuallyany type of growth-equitypattern."Examples of this effect in the U-curve literature includethe appearanceof large decreasesin inequalityin Kenya (Bigsten, 1986)andthe presenceof a U-curveeffect in Malaysia(Meesook,1975)and Korea (Kwack,1990). Lastly,muchas in the old datasets,the latestdatacontinuesto illustrate an inverted U growth-equitypattern in cross-section-current inequality levels are usuallylower at higher levels of income and higher inequalities are more prevalentin LatinAmericaand other partsof the middle-income to U-curvecanbe attributed the range.The persistenceof the cross-national variouslatent, country-leveldeterminantsof inequality(includinghistoricorrelatedwith currentincome cal inequalitylevels) that are significantly levels. Thus, authorshave made the cross-sectionalU-curve "disappear," or at least become less robust,in econometricmodels by simplyincluding country-level"fixedeffects"(Anand and Kanbur,1993b;Brunoet al., 1998;

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DeiningerandSquire,1998;Ram, 1997).14In studieswherecountry-specific dummyvariablesare addedto models,the U-curvenot only goes away,but in some cases is even reversed.Higgins and Williamson(1999:10)seem to stating that over time "the Kuznets agree with this line of interpretation, when dummyvariablesfor Asia and curvedisappeared (fromcross-section) LatinAmericawere added." Yet while differenteconometricapproachesand methodological specificationscan lend variouslevels of supportto the hypothesisas variously defined, the overwhelmingempirical evidence today does not point to the existence of a meaningfulinvertedU-curve patterneither in terms of a by-productof dualisticdevelopment or simply a picture of rising then fallinginequalitiesover time (Anad and Kanbur,1993b;Brunoet al., 1998; Deininger and Squire,1996, 1998;Kim, 1997;Li et al., 1998;Lipton, 1997; Ram, 1997;Ravallion,1995).In termsof empiricalgenerality,the most robust finding emergingfrom today's quantitativeliteratureis that no systematic relationshipexists between average income levels and/or subsequent growthand income inequality,either for nationson averageor even withinaggregated incomegroupings. opposedto followinga predictable As trends in the contemporaryworld are characterizedby tremenpattern, dous heterogeneity of growth-equity experience. Deininger and Squire (1998:261,282) review their comprehensivedatabase of inequality estimates andconcludethatin the few countrieswherea significant lineartrend in inequalitycan be detected,"itcontradicts Kuznetshypothesisalmost the as often as confirming In a recent New York Timesarticle,GaryFields it." states the prevailingview that "the Kuznets'scurve is neither a law nor even a centraltendency.15 patternis that thereis no pattern"(Krueger, The empiricalandpolicyheuristic 2002).In sum,the U-curveas a contemporary is best characterized Gustav Ranis (1996:50),who declares,"As I read by the evidence, it suggests that it is time to give a decent burialto that famous 'law,' which was actuallyadvancednot by Kuznets,who was much too cautious,but by Kuznetsians, who were not." The U-Curveas a Theoretical-Historical Statement As Ranis implies, Kuznets's formulation of the U-curve hypothesis was always more historicallygrounded, sociologically sophisticated,
14Thisis accomplished via a series of country-specific dummy variables added to the traditional quadratic model. The argument is that these dummy variables, while preserving the common Kuznets structure, allow inequality to differ across countries that are at the same level of development. 150f course, the fact that the inverted U-curve is being discussed in the New York Times in 2002 is itself a testament to the uncommon impact of Kuznets's hypothesis over time.

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and intellectuallycautiousthan is generallyappreciated.And refutingthe U-curveas a predictablepatterndoes not mean that Kuznets'soriginalcontributionis not richwith theoreticalinsight.As inequalityreemergesin the social sciences as an importantsocial problem,the analyticalvalue of the U-curve lies more in its theoretical constructsthan its empiricalexpectations. For example, the cases of Korea and Thailandprovide evidence that politicalmobilizationof the urbanworkingclass may have proceeded along patternssimilarto those Kuznetswould have predicted(albeit at a seek a "macromuchfasterrate). Conceiqaoand Galbraith(2001:139,160) economic alternative"to current inequality literature and use Kuznetstype methods to explain rising inequalityin the developed world, in the end hoping for a "renewedappreciationof the depth and durabilityof Simon Kuznets'sfundamentalinsight."Stallingset al. (2000) compare the East Asian and Latin American growth-equity experiences and argue that the central contrast can be explained by the nature of the urbanization and industrialization process emphasizedby Kuznets.Along these and Moran (2005) recast Kuznets'soriginalcontribulines, Korzeniewicz frameworkand explore how the fundamental tion withina Schumpeterian insightsof his researchhelp explain world-historicalpatternsof inequalindeed,may have had the argue,"Kuznets, ity. As Stallingset al. (2000:106) economicsof the storyrighteven thoughempiricaloutcomesacrossregions and countriesand withincountriesover time follow no neat pattern." Recent historicalresearchhas also vindicatedKuznets'sinsightsabout the long-term egalitarian effects of industrialization,especially in the United States and Great Britain.Economichistoriansresearchingthe historical dynamicof the U-curve from the eighteenthcenturyonwardhave found Kuznets's hypothesized patterns to be reasonably accurate. The most notable work in this area has been conductedby JeffreyWilliamson (1991a,b,1997) and Lindert and Williamson (1985). Analyzing the best available historical data on inequality in Great Britain and the United States, they find strong validationfor the descendingarc of the U-curve, and some (admittedlymore fragile) evidence for the early upswing.More broadly,they find that, with the possible exception of Germany,there is a clear trend towardconvergingincomesin the twentiethcenturyfor a large numberof industrialized countries.16 As Williamson(1991a:34)is quick to point out, however, "no unambiguous theory of the Kuznets Curve emerges from... history."The historicalevidence is admittedlyfragile,and even where Kuznets-typecurves
16Note,however,that while Williamsonfinds supportfor Kuznetscurves,he does not fully of Kuznets's explanation whythey exist.Whilehis basicmodelhasmuchin common support he with Kuznets'sframework, tends to downplaythe social-politicalfactorsthat Kuznets tendency. egalitarian arguedwouldaccountfor the long-run

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are found, Kuznetsianprocesses often are not. S6derberg(1991), for example, shows that the U-curvedoes applyin principleto the Swedishcase, yet attributesthe patternto the role of inflationratherthan sectoralimbalances. Dumke (1991) similarlyarguesfor a GermanU-curve pattern,but Economichistohis explanationis rooted in the processesof urbanization. rians analyzingother partsof the world have found non-U-curvepatterns. Japan,for example,is often cited as havingmissedthe invertedU-curvealMinami(1998:39)suggests together duringits process of industrialization. in that "therelativelyequal distribution contemporary Japanwas not a natural consequenceof [historical] economic growth."Thomas(1991) argues in that industrialization the Australiancontext was not associatedwith an in inequalitybut with a continuousegalitarian trend. early upswing From a historicalperspective, then, the central finding is that time and space matter,a contextualization Kuznetshimselfmade all along.The inverted U-curve is probablya somewhat accuraterepresentationof the for revodevelopment-inequality trajectory the Anglo Americanindustrial lutionsin the earlynineteenthand twentiethcenturies.But Kuznetsalways insistedthat his was a historically bondedconclusion,not a forecastthat the will be presentwhereverindustrialization general pattern processesoccur, or whenever they take place. As Williamson(1991b:60)argues, "Lavish attention to the Kuznets curve has tended to deflect our attention away from assessing the distributionalimpact of each country's idiosyncratic policies and institutions... [that account] for historical departuresfrom the Kuznets curve. The issue is not so much whether the Kuznets curve exists in history,but ratherto understandthe forces which accountfor its presenceor absence." CONCLUSION: IMPLICATIONS FOR THE SOCIOLOGY OF SOCIAL-SCIENTIFIC KNOWLEDGE In the precedingpages,I analyzethe historyof an extraordinary social scientificargument,and one of the most influentialstatementson inequality ever made-Simon Kuznets'sinvertedU-curvehypothesis.The history of Kuznets'stheory is one of shifting interpretationsand appropriations of throughtime, demonstrating along the way how the applicability a set of argumentschanged with the social and political contexts in which inequalitywas conceptualized.A set of conjecturesthat the authorhimself claimedwere based on "95%speculation" became a reifiedsocioeconomic law, a closed "blackbox," at a time when the U-curve provided an aesthetically elegant, empiricallygrounded synthesis of the broad academic and policy consensusthat prevailedin the developmentalistera. As such,

The InvertedU-CurveHypothesis

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the U-curvebecame a foundationstatementin this consensusas an empirical, theoretical,andpoliticalstatementof fact.A widelyacceptedargument then became contentious, and its existence was paradoxicallychallenged by the very evidence previouslyused to supportit, when this largerapparatuswas destroyed.In a climate of intellectualfragmentation and critical the black box was opened. But what emergedwas not a empiricalinquiry, each meaningless,discreditedtheory,but many versionsof the "U-curve," to mean somethingdifferentthan the others.That the U-curve interpreted is still vigorouslydebated and relevanttoday reflectsnot only the power of old blackboxes to remaincompelling,but also the theoreticaland methodologicalrichnessof Kuznets'soriginalstudy. The history of the U-curve hypothesishas implicationsfor those interestedin the constructionand progressionof social-scientific knowledge. as Randall Collins comments in the preface to Fuchs's book Although, (1992:xv),the sociology of science has been "in flux" since the 1990s, two general frameworkshave emerged in the discipline:those imposing a Kuhn-basedapproachand those consideringthe constructionist aspects of knowledgecreation.During the 1960s and 1970s,Kuhn's(1962) model was certainlyin vogue, and social scientistsbegan to incorporatehis ideas despite his explicitstatementthat social science had not reachedthe stage science. Hall (1993), for example, contends that Britain's of paradigmatic transformation underThatcheroccurredthrougha pro"policyparadigm" that out" and policy experimentation went on untilit precess of "puzzling "a shiftin the locus of authorityover policy and initiate[d]a wider cipitated Hall's analogyto contest between competingparadigms" (Hall, 1993:280). the Kuhnianmodel has been widelycited but, as Babb (2001:3)contends,it begs an importantquestion:"[I]fneoliberalism'works'so well, why was it not implementedfortyyearsbefore?" This is precisely the point of departurefor the second general approach, one which emphasizesthe social constructionof knowledge. As Yonay (1998:18)explains,the goal is "notto show how 'good' theorieswin, but to documenthow the view of whatis 'good'is beingconstitutedandthen used to resolve debates about Nature."Scholarsin this traditioncontend that the old debate between the internalistsand externalistsin the studyof science is obsolete because the elements involved never appearas "purely internal"or "purelyexternal."They do not deny the role of objectively gained empiricalevidence, or that there can be good and bad arguments, but they understandthese processesto be contingent.The rise and fall of the invertedU-curvehypothesisfavorsa constructionist readingof the hisof In the end, the conceptualization the U-curveover time was as much tory. a productof the largeracademicandpoliticalclimatesas it was a productof out" of evidence. the originalideas themselvesor the empirical"puzzling

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Thusfar,most constructivist researchhas concernedthe "micro" workof scientificresearch-historical studiesand ethnographic observations ings of the strugglesamongworkingscientiststhat drawattentionto the social processes that shape the content of their work (see Knorr-Cetina,1991, in Latour,1987;the contributions Pickering,1992).Yet the story of the Ucurve supportsrecent efforts to expandthe constructionist approachfrom one that focuses on micro-levelanalyses within the scientificcommunity to one that better understands sociology of social-scientific the knowledge where outcomesmustbe explainedby widersocial andpoliticalfactorsthat historicallycondition its production.This approachwould seek to problematizeboth sides of this two-waystreet:the mechanisms whichsocialby political contexts affect the productionof social-scientific knowledge and the ways in whichthis knowledgeis simultaneously and appropriated interpretedin social-politicalcontexts.Indeed,this is a weightyintellectualtask, but it is in this sense that the vein of recentresearchcarriedout, for example, by Babbs (2001), Escobar (1995), Rueschemeyerand Skocpol (1996), and Yonay (1998) shouldbecome more commonplace. ACKNOWLEDGMENTS I am gratefulto James Rule, Ian Roxborough,GiovanniArrighi,and PatricioKorzeniewicz providingvaluableintellectualinsightsat various for stages of this project,with the usualcaveat that they bear no responsibility for the end product.I wantalso to thankthe anonymousreviewersfor their careful reading of an earlier version, and especially the editor and staff of SociologicalForum,for the time and energy they spent on this paper's behalf.

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