THE POLITICAL ECONOMY AND SOCIAL INEQUALITY: CASE STUDIES IN DEVELOPING COUNTRIES

Abstract

Socio-economic inequality refers to significant disparities in the distribution of resources and opportunities among individuals or groups in society. Social inequality is a structural issue faced by most developing countries, including Indonesia. Using a qualitative approach with a literature review method, this study analyzes the relationship between political economy and social inequality in developing countries, especially the dynamics in Indonesia. The study found that factors that reinforce social inequality are economic liberalization, fiscal policy decentralization, and the dominance of political elites in decision-making. In addition, the lack of wealth democracy reform further deepens the gap between the rich and the poor. The study suggests that developing countries without state intervention will inevitably exacerbate socio-economic inequality. Therefore, in the long run, reducing social inequality requires effective redistributive policies, strong local financial institutions, and limits on oligarchic domination of economic and political power.