On the Relationship between Equality and Efficiency

Abstract

The established theory of equality and efficiency implies that the two are in an unconditional negative correlation. According to this hypothesis and by setting up a simple model, the paper aims to prove the following propositions: Even if not considering the inequality of opportunity, only unequal results will have a double-edged effect on efficiency, either positive or negative. However, the final results attained from the positive and negative functions are not always favorable for efficiency. Only when stimulating effects surpass the undermining ones, can we raise efficiency through increasing inequality index or sacrificing certain equality. Therefore, under some circumstances, the tradeoff between equality and efficiency does not exist.
Key words: equality; efficiency; inequality index; the relational curve between equality and efficiency