Abstract:

Understanding how income inequality affects the human development index (HDI) is crucial to understand where the multidimensional poverty problem originates from. The Gini coefficient expresses income inequality and allows the comparison of income distributions between countries. This study aims to use the HDI and the Gini coefficient, which shows the income distribution inequality, to analyse Brazil, Russia, India, China, and the Republic of South Africa (BRICS countries) and thus to understand how the income distribution inequality influences the human development index values. In this context, the Gini coefficient of the BRICS countries for the period 1990-2018 was analyzed with the panel data analysis method as the independent and the HDI data as the dependent variable. In addition, the economic growth variable was added as an explanatory variable to the model. In this analysis, the Augmented Mean Group Estimator (AMG) was used because the coefficient homogeneity could not be found after the cross-section dependence and cointegration test was performed and there was a correlation between the units. As a result, it was determined that there was no statistically significant relationship between the Gini coefficient and the HDI among BRICS countries. However, country-based showed that the changes in the Gini coefficient affected HDI in Brazil and Russia. While the direction of this effect was opposite in Brazil, it was linear in Russia. 

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