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wealth inequality

Game-changers and whistle-blowers: taxing wealth

Jim Brumby's picture
Also available in: Français 

High and rising income inequality is a serious concern in many countries, as highlighted in the IMF’s recent Fiscal Monitor. Wealth, however, is distributed even more unequally than income, as in the picture below.

Thomas Piketty on inequality in developing countries (great, but still not enough on politics)

Duncan Green's picture

I heard econ rock star Thomas Piketty speak for the first time last week – hugely enjoyable. The occasion was the annual conference of the LSE’s new International Inequalities Institute, with Piketty headlining. He was brilliant: original and funny, riffing off traditional France v Britain tensions, and reeling off memorable one liners: ‘meritocracy is a myth invented by winners’; ‘It’s difficult to be an honest country in today’s world. Britain used to be an honest country.’

He started with a mea culpa for the lack of attention in his best selling Capital in the 21stCentury to inequality in developing countries. The good news is that he is now putting that right, with research under way on inequality in South Africa, Brazil, the Middle East, India and China. He gave us a preview on the first three.

His overall conclusion? "Official measures vastly underestimate inequality". The most common reason for this is that inequality stats are drawn from household surveys, but samples of households typically miss the few megarich ones, and so underestimate the money at the top. He prefers to use tax and income data, which he has now got access to from governments because of his newfound fame. Even that data doesn’t tell the whole story, as it misses tax evasion, for example, but it’s a step in the right direction.