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Where has the global movement against inequality got to, and what happens next?

Duncan Green's picture

Katy Wright, Oxfam's head of Global External AffairsKaty Wright, Oxfam’s Head of Global External Affairs, stands back and assesses its campaign on inequality.

The most frequent of the Frequently Asked Questions I’ve heard in response to Even it Up, Oxfam’s inequality campaign is “how equal do you think we should be?”

It’s an interesting response to the news that just 80 people now own the same wealth as half the world’s population put together, and the best answer was that given by Joe Stiglitz to a group of UN ambassadors: “I think we have a way to go before we worry about that.”

The Inequality BusSo how far do we have to go, exactly? The good news is that inequality is no longer just the concern of a small number of economists, trades unions and social justice campaigners. It’s now on the agenda for the international elite.

That partly reflects a growing realisation that inequality may be a problem for us all, not just those at the bottom. The Spirit Level  raised questions about the impact of inequality on societies, and the rise of Occupy pointed to a growing political concern.

More recently, research papers from the IMF have demonstrated extreme inequality is at odds with stable economic growth, and that redistribution is not bad for growth. Significantly, this shift in focus from the IMF has been driven by Christine Lagarde. To the outside world, the IMF now officially cares about inequality, as do Andy Haldane at the Bank of England, Donald Kaberuka (outgoing head of the African Development Bank), and Alicia Barcena of the Economic Commission for Latin America and the Caribbean, to name a few.

Lessons from the taxi industry to improve Romania’s governance

Ismail Radwan's picture
taxi in Romania
Photo: Daniel Kozak, World Bank

The first time I came to Bucharest in 2013 the Bank office offered to arrange a pick up from the airport. Being a seasoned traveler, I declined the offer. I reasoned that I had lived and worked in so many countries I could manage the transfer to the hotel without assistance. I was wrong.
I picked up my luggage to find a local cab outside the airport. A taxi driver offered me a ride. I didn’t negotiate the price upfront seeing that he had a meter in the car.
Twenty minutes later we reached the hotel. The meter read Lei 200 - at the that time about $60. That was over twice the going rate but there was little else I could do. I felt cheated as so many tourists do.
I learned from the experience, accepted offers of help from colleagues and paid more attention to rates going forward.
About a year later I returned to Bucharest to find a new system in place.  An electronic kiosk had been installed at the airport.  Arriving visitors could now press a button to get an estimated wait time to hail a taxi. I took my ticket. It was a smooth ride.
What made the difference? 
The new taxi ordering system is now available on mobile phones mirroring, in many ways, the service provided by Uber. Passengers can rate drivers and increase accountability.  
Bucharest has gone from being a difficult place to find an honest cab driver to one of the most convenient. 
The change has been driven by incentives and improved technology. 

 What are the implications for governance reform? 

Philippines: Traffic woes and the road ahead

louielimkin's picture
Traffic congestion results in an estimated productivity loss of around PHP2.4 billion ($54 million) a day or more than PHP800 billion ($18 billion) a year.

From my house in northern Quezon City, I drive more than two hours every day to get to the office in Bonifacio Global City, which is about three cities away where I come from, and two cities away from the capital Manila. It’s a journey that should only take around half an hour under light traffic. That is a total of four hours on the road a day, if there is no road accident or bad weather. It takes me an hour longer whenever I use the public transport system. Along with hundreds of thousands of Metro Rail Transit (MRT) commuters, I have to contend with extremely long lines, slow trains, and frequent delays due to malfunctions. This has been my experience for several years. Many of us might be wondering: why have these problems persisted?

Philippines: Why We Need to Invest in the Poor

Karl Kendrick Chua's picture
A fish vendor waits for customers in his stall in Cebu City. According to the latest Philippine Economic Update, pushing key reforms to secure access to land, promote competition and simplify business regulations will also help create more and better jobs and lift people out of poverty. ​(Photo by World Bank)

In my 10 years of working in the World Bank, I have seen remarkable changes around me. In 2004, Emerald Avenue in Ortigas Center, where the old World Bank office was located, started to wind down after 9 PM.  Finding a place to buy a midnight snack whenever I did overtime was hard. It was also hard to find a taxi after work.

Today, even at 3 AM, the street is bustling with 24-hour restaurants, coffee shops, and convenience stores, hundreds of BPO (Business Process Outsourcing) employees taking their break, and a line of taxis waiting to bring these new middle class earners home. Living in Ortigas Center today means that I also benefit from these changes.

Please Steal these Killer Facts: A Crib Sheet for Advocacy on Aid, Development, Inequality, etc.

Duncan Green's picture

Regular FP2P readers will be (heartily sick of) used to me banging on about the importance of ‘killer facts‘ in NGO advocacy and general communications. Recently, I was asked to work with some of our finest policy wonks to put together some crib sheets for Oxfam’s big cheeses, who are more than happy for me to spread the love to you lot. So here are some highlights from 8 pages of KFs, with sources (full document here: Killer fact collection, June 2014).

In Armenia, Perception Matters For Tax Reforms

Jean-Michel Happi's picture

Would you be more willing to pay taxes if you didn’t have to spend hours doing it, or if you see that money being used in the right way? Well, you are not alone.
Armenians, like people around the world, feel the same. According to the recently conducted Tax Perception Survey in the country, easier tax compliance and more visible link between taxes paid and public services received was found to be particularly important.

Between 66 percent and 75 percent of respondents said they would be more willing to pay more taxes if the procedures were easy and less time-consuming, if they saw more useful social and other public services, or if they saw less corruption.

Over 95 percent of respondents felt the tax burden is heavy or very heavy, while almost 50 percent reported that evading tax payments was not justified under any circumstances.
About 57 percent noted that high taxes or desperate financial situations were the main reasons for avoiding or evading tax payments.
The data unveiled by the latest Tax Perception Survey,  carried out with USAID support and World Bank Group technical assistance covered around 1,500 households and 400 business taxpayers.  The analysis strengthened the need to modernize the tax system, which has remained a major challenge for Armenia. Despite Armenia’s ranking as 37th in Doing Business, the taxation system, at 103rd on the list, still requires a lot of work.
To be sure, there have been some improvements to the system in the past few years. They include the introduction of electronic filing of tax returns, e-government applications, risk-based audit principles, and taxpayer service centers and appeal system. These achievements contributed to increasing the tax to GDP ratio from 19.5 percent in 2010 to 22.8 percent in 2013.
But much remains to be done to further streamline and simplify tax procedures, modernize the tax administration, and enact a tax code.

The Link Between Income Inequality and Public Services is Stronger than I Realized (Thanks to Emma Seery for Putting Me Straight)

Duncan Green's picture

Oxfam has been banging on to good effect recently about extreme global inequality in income and wealth. Over many years, we have also been making the case for universal health and education. It turns out the link between the two is stronger than I’d realized, according to ‘Working for the Many: Public Services fight Inequality’, a new paper published today.

We normally discuss inequality before and after tax (eg it’s progressive taxation that really brings Europe’s inequality down). But recent work published by the OECD and World Bank has put a monetary value on the ‘virtual income’ provided by public services. This produces some startling findings on inequality.

Public services mitigate the impact of skewed income distribution, and redistribute by putting ‘virtual income’ into everyone’s pockets. For the poorest, those on meagre salaries, though, this ‘virtual income’ can be as much as – or even more than – their actual income. On average, in OECD countries, public services are worth the equivalent of a huge 76 per cent of the post-tax income of the poorest group, and just 14 per cent of the richest. It is in the context of huge disparities of income that we see the true equalizing power of public services.

The Laffer Curve Befriends Bangladesh’s Financial Corporates

Zahid Hussain's picture

Tax revenue growth in Bangladesh this year has been one of the lowest in recent years.  There is now demand for a cut in corporate income tax rate with the forthcoming FY15 budget.[1]  Is this a good idea from a fiscal point of view?
Whether or not a tax-cut will increase or lower tax revenues depend on the tax rates and the tax system in place. If tax rates are in the prohibitive range, a tax cut will result in increased tax revenues. Arthur Laffer distinguished between the arithmetic effect and the economic effect of tax cuts. The arithmetic effect means that a lowering of the tax rate will result in lower tax revenues by the amount of the decrease in the rate. The economic effect identifies a positive impact of lower tax rates on work, output and employment which expand the tax base. If tax rates that are currently in the prohibitive range are lowered, the economic effect of a tax cut will outweigh the arithmetic effect and revenue collection will increase with tax cut.[2]