The Impact of Financial Development on Income Inequality: Selected Developing Countries

Poverty and income inequality cause economic, social and political problems and challenges in different countries. Comparison of inequality intensity represents the true nature of huge changes by the economic progress. In this paper, we study the relationship between financial development and income distribution inequality in 11 developing countries with average human development that their average per capita income is higher than the global average per capita income. During this investigation to determine how the effectiveness of development financial on distribution inequality by using the models of regression and Panel technique, to test two theories during the time 1984- 2005. The results of estimations reject the inverse – Urelationship between financial development and income inequality and support the negative and a linear relationship between these two variables.