It seems that everyone is talking about inequality these days, and I, for one, am happy to see this issue at the forefront in the development discussion.
We can look at inequality in a number of ways, which are not unrelated. One of the most visible types of inequality on the radar is inequality of outcomes — things like differences in academic achievements, career progression, earnings, etc. — which, in and of themselves, are not necessarily bad. Rewarding an individual’s effort, innate talents and superior life choices can provide incentives for innovation and entrepreneurship, and can help drive growth.
However, not all inequalities are “good.” When inequality perpetuates itself because those born poor consistently do not have access to the same opportunities as those born rich, what emerges is a deep structural inequality that is bad for poverty reduction, bad for economic growth, and bad for social cohesion. How pervasive are these deep inequalities? Much more than we would like. Indeed, when we examine what is happening in many countries around the world today, we find large and persistent, even growing, gaps in earnings between rich and poor. And we find that those who start out in poverty or are part of a disadvantaged group tend to remain there, with little opportunity to work their way out.
How do we explain this, and what can we do to tackle it? We need to take a step back and look at where this inequality originates, and that is where the concept of equality of opportunity comes in to play. This concept broadly refers to access to a basic set of services that are necessary, at the minimum, for a child to attain his or her human potential, regardless of the circumstances — such as gender, geographic region, ethnicity, and family background — into which he or she is born. Too often, access to such basic services like electricity, clean water, sanitation, health care and education is much lower among children born into circumstances that place them at a disadvantage. Children from disadvantaged groups thus set off on an unequal path from day one, which curbs their opportunities and potential into adulthood.
If children born to poor, disadvantaged families are unable to build the human capital they need to become productive, healthy adults earning decent incomes, there is no way that we will eliminate extreme poverty by 2030 — or perhaps ever. What seems intuitive is also backed by strong evidence: Early disadvantages are likely to have lasting impacts over lifetimes and are extremely difficult (and costly) to correct with policy interventions at later stages in life.
The characteristics a child is born with should not pre-ordain his or her life’s path. This is a critical focal point as we work to achieve the World Bank Group’s goals of ending extreme poverty and promoting shared prosperity. While we measure these goals in terms of incomes, the spirit of the goals is much broader, and includes different dimensions of welfare — including education, health, and access to basic infrastructure. We need to broaden the opportunities of the extreme poor and of the less well-off if we want to see real, sustained progress in lifting people out of poverty for good.
Consider this: children among the bottom 40% of households in Ethiopia, Liberia, Madagascar, Mozambique, Namibia, and Zimbabwe have vastly poorer access to sanitation than their counterparts in the top 20%.
We need to do more to help enable children of every background to follow an equal path toward their futures. It is important to remember that this is not just a question of fairness — it’s also a question of good economic policy for the society as a whole. An economy cannot attain its potential for growth and prosperity if large segments of its children are excluded from the opportunities that allow them to become productive citizens. And when the playing field is tilted strongly toward those favored by their family circumstances, incentives for innovation and human endeavor are dampened, leading to a society with little dynamism and low social and economic mobility.
This week, we take a great step in helping identify where these gaps persist as we launch our interactive Visualize Inequality dashboard. This user-friendly tool can help make partners, policymakers, advocates and the general public aware of and equipped with the data they need to fight inequality of opportunity in the developing world.
This is just a first step, and we will need to expand our focus on inequality to improving the quality of the services that children access, and ensuring that institutions are more representative of the voices of the poor and marginalized. I invite you to explore the dashboard, and to take a closer look at where, as a start, smart policies could help change the course of a child’s, and eventually a country’s, future.