The Coronavirus-related crisis is taking place in a context where many countries were facing rising inequalities and reduced social mobility, leading to a growing sense of unfairness and discontent that was already challenging globalisation and related economic policies.
In fact, following a long liberalization wave in the 1980s and 1990s, the pace of market reforms —drastic changes in labour, product and financial market regulations as well as barriers to trade and FDI — gradually slowed in most advanced and emerging market and developing economies. Outside of crisis periods such as the global financial and euro area crisis, there seems to be waning political appetite for market reforms.
Waning appetite for market reforms may, in part, reflect rising concerns regarding the income distribution effects of liberalizing trade, labour, product and financial markets. For example, there is growing indication that trade liberalization, while raising average incomes, might persistently increase inequality in wages and job opportunities between individual workers and regions. At the same time, available evidence on the distributive effects of various market reforms remains sparse.
Against this background, the conference will explore the impact of various market reforms on income distribution and the extent to which it can be improved through packaging reforms or supplementing them with other policies that enhance their distributive impact. It will also assess the distributional implications of Covid-19 and policy responses through labour market, social protection, healthcare and education channels.