ABSTRACT
This chapter explains the links between market relations and inequality. It shows how states can promote pro-poor or inclusive development through policy interventions and through the operation of the institutions of government. The chapter also explains the degree to which development transformations in Southeast Asia have deepened economic inequalities. In the 1950s and 1960s when most of the countries of Southeast Asia established national development-planning agencies and systematically began to pursue 'development', the problems they faced were those of underdevelopment, reflected in high levels of poverty and low levels of human development and material consumption. Unequal growth dampens the impact of economic expansion on poverty reduction. Elites may use their economic power to protect their interests in the guise of rent-seeking or various corrupt practices, while the poor and dispossessed may use their political influence.
