Questions of equity and inequality have moved to the center of debates on development and poverty reduction. This reflects growing awareness that even countries with high rates of growth can experience stagnating or increasing inequality, and that inequality can itself limit the poverty reducing effects of growth. Indeed, recent work indicates that, in addition to its intrinsic value, equity should be valued for its positive impacts on growth and the poverty-reducing effects of such growth. These concerns are coupled with questions of governance. This is because institutional arrangements...