Probably, the single most important problem in unequal societies is that social trust is hard to build and maintain. In countries with low levels of trust, investment decisions tend to focus on short-term returns rather than on long-term rewards. This skews the economy away from fixed investment and from investments in infrastructure or research and development that have long-term payoffs.
The simple explanation is that unequal countries are generally more unstable and therefore long-term investment is more risky and hence impact negatively on capital flows. BIS central bankers’ speeches  5  To counter this phenomenon, countries need strong institutions, the consistent application of rules and legal frameworks that protect investors over the long-term.