Income Inequality in the Caribbean: Case Study of Jamaica
Author(s)
McBain, Helen
Abstract
This paper attempts to account for Jamaica’s income divergence from most Caribbean countries by tracing the country’s growth performance historically and examining a number of contributing factors. Jamaica’s relatively low per capita income level was initially due to significant population growth and subsequently to the failure to maintain the high economic growth rates achieved during the 1950s and 1960s. Proximate determinants of growth such as investment and productivity do not adequately explain growth performance and income divergence. Fundamental factors such as geography, foreign trade, institution and economic policies are therefore examined. Economics policies and natural resource endowments determined to a large extent the structure and trade dependence of the economy, which in turn influenced its growth performance. Ideological divergence in the 1970s significantly altered the economy’s growth path, as did the failure to invest significantly in human resources and employment generating sectors. Violent confrontation between the political parties further undermined prospects for growth, and indeed remains a critical factor that can explain the inadequacy of Jamaica’s economic performance.
