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inequality

Relaunching Africa Can and Sharing Africa’s Growth

Francisco Ferreira's picture

Dear Africa Can readers, we’ve heard from many of you since our former Africa Chief Economist Shanta Devarajan left the region for a new Bank position that you want Africa Can to continue highlighting the economic challenges and amazing successes that face the continent. We agree.

Today, we are re-launching Africa Can as a forum for discussing ideas about economic policy reform in Africa as a useful, if not essential, tool in the quest to end poverty in the region.

You’ll continue to hear from many of the same bloggers who you’ve followed over the past five years, and you’ll hear from many new voices – economists working in African countries and abroad engaging in the evidence-based debate that will help shape reform. On occasion, you’ll hear from me, the new Deputy Chief Economist for the World Bank in Africa.

We invite you to continue to share your ideas and challenge ours in pursuit of development that really works to improve the lives of all people throughout Africa.

Here is my first post. I look forward to your comments.

In 1990, poverty incidence (with respect to a poverty line of $1.25) was almost exactly the same in sub-Saharan Africa and in East Asia: about 57%. Twenty years on, East Asia has shed 44 percentage points (to 13%) whereas Africa has only lost 8 points (to 49%). And this is not only about China: poverty has also fallen much faster in South Asia than in Africa.

These differences in performance are partly explained by differences in growth rates during the 1990s, when emerging Asia was already on the move, and Africa was still in the doldrums. But even in the 2000s, when Africa’s GDP growth picked up to 4.6% or thereabouts, and a number of countries in the region were amongst the fastest-growing nations in the world, still poverty fell more slowly in Africa than in other regions. Why is that?

Stiglitz on Milanovic and inequality

LTD Editors's picture

In today's NYT opinionator blog, Joe Stiglitz writes about inequality and the research of Branko Milanovic, World Bank lead economist and inequality expert. In his post, Stiglitz draws from Milanovic's research on long range inequality trends to ponder who the winners and losers of globalization have been and how the most recent worldwide financial crisis affected both the level of global inequality and the relative importance of differences in mean country income vs. nationally based inequalities. His post explores whether we envisage a situation where income inequality continues, by and large, to increase within nations, but, spurred by the high growth of China and India, decreases globally. Stiglitz also ponders the hollowing-out of traditional middle classes in rich countries.

Is Inequality All About the Tails? The Palma, the Gini and Post-2015

Duncan Green's picture

Alex Cobham and Andy Sumner bring us up to date on the techie-but-important debate over how to measure inequality

It’s about six months since we triggered a good wonk-tastic discussion here on Duncan’s blog on how to measure inequality. We proposed a new indicator and called it ‘the Palma’ after Chilean economist Gabriel Palma, on whose work it was based. We suggested the Palma would complement, or perhaps even replace the (in our view) less useful Gini index. Here we bring things up to date with a look at inequality in the post-2015 debate, and present some further findings on the relative merits of Gini and Palma, based on our new paper.

First, post-2015 and all that.

Last week the Center for Global Development held an event in Washington DC to discuss the best income inequality measures for post-2015, with both a technical panel (video) comparing alternative measures, including the median, the Palma, the Commitment to Equity indicator and a multidimensional approach.

There was also a ‘user’ panel (video) with wonks from the IADB, IMF, Oxfam, UNICEF and the World Bank, discussing the policy need and the scope for implementation. While panelists and other participants did not agree on the idea of a post-2015 inequality goal or target (surprise, surprise), there was near unanimity on the importance of measuring income inequality, and doing so better than we do now.

Why Didn’t the World Bank Make Reducing Inequality One of Its Goals?

Jaime Saavedra-Chanduvi's picture

The World Bank Group (WBG) has established that its mission, endorsed by the governors of its client countries, is centered around the goals of sustainably ending extreme poverty and promoting shared prosperity.  Extreme poverty is monitored by the percent of people living below the $1.25-a-day threshold.  The Bank’s mission thus gives a clear message:  Extreme poverty, hunger, destitution must come to an end.

To monitor progress in shared prosperity, the WBG will track the income growth of the bottom 40 percent of the population in each country.  The clear signal the WBG wants to give is that the institutional mission is about reducing poverty, fostering growth and increasing equity, so we need to monitor what happens to welfare of the less well off in every country.  Improving averages is not enough; a laser focus on those who are at the bottom of the distribution at all times, everywhere, is needed.

Top Incomes and the Measurement of Inequality in Egypt

Paolo Verme's picture

The January 2011 revolution in Egypt that overthrew 30 years of autocratic rule was in part due to a sense of deteriorating economic situation, injustice and growing inequality in the society. This was voiced by protesters during the revolution but also by intellectuals and the press after the fall of the old regime in an effort to explain the revolution. The World Values Surveys administered in Egypt in 2000 and 2008 confirm that the subjective aversion to inequality has intensified between the two years and for all social groups.  

It is thus surprising that economic inequality in Egypt as measured by household surveys is low and has been declining during the past decade. In 2009, the most recent year when a large household income and expenditure survey was administered, the Gini coefficients for inequality in incomes and expenditures were 32.9 and 30.5 respectively , far lower than in surrounding countries, southern Europe or the United States. This finding led observers to dismiss these figures as “unreliable” and incapable of capturing the true economic inequality in Egypt.

Understanding the Sources of Spatial Disparity and Convergence: Evidence from Bangladesh

Forhad Shilpi's picture

The economic liberalization during the last couple of decades led to impressive economic growth and poverty reduction in many developing countries. This period has also witnessed worsening of income inequality and widening of spatial disparity (World Development Report (2009); Kanbur and Venables (2005); Kim (2008)). There is considerable worry among policy makers about the extent to which this rise in spatial inequality is due to increasing disparity in opportunities in terms of provision of basic infrastructure and services. The recent growth and poverty reduction experience places Bangladesh as an exception to this trend of increasing spatial inequality.  Bangladesh made significant strides in poverty reduction between 2000 and 2010 with incidence of poverty falling from 48.9 percent to 31.5 percent. During the same period, the incidence of poverty declined more than proportionately in traditionally poorer regions, reducing welfare gaps across regions. There is also no evidence of significant change in overall inequality over the same period. What made spatial disparity in Bangladesh to decline while its economic growth accelerated substantially? What were the sources of decline in spatial disparity in welfare?

Campaigning on Hot v Cold Issues – What’s the Difference?

Duncan Green's picture

I recently began an interesting conversation with our new campaigns and policy czar, Ben Phillips, who then asked me to pick the FP2P collective brain-hive for further ideas. Here goes.

The issue is ‘cold’ v ‘hot’ campaigning. Over the next couple of years, we will be doing a lot of campaigning on climate change and inequality. Inequality is flavour of the month, with an avalanche of policy papers, shifting institutional positions at the IMF etc highlighting its negative impacts on growth, wellbeing, poverty reduction, and just about everything else. That makes for a ‘hot campaign’, pushing on (slightly more) open doors on tax, social protection etc.

In contrast, climate change is (paradoxically) a pretty cold campaign. Emissions continue to rise, as do global temperatures and the unpredictability of the weather, but you wouldn’t think so in terms of political agendas or press coverage (see graph). The UN process, focus of huge attention over the last 15 years, is becalmed. Politicians make occasional reference to ‘green growth’, but that is becoming as vacuous as its predecessor ‘sustainable development.’

The distinction is not so clear cut, of course. Hot campaigns can suddenly go cold and vice versa (politicians and officials are able to go from saying ‘no, don’t be ridiculous’ to ‘we’ve always supported this’ with bewildering ease, when the moment is right). You could argue that the Arms Trade Treaty campaign was one of those. But a campaign needs to get seriously hot if it involves a major redistribution of power and influence (like taxation/inequality or climate change, but not, I would argue, the Arms Trade Treaty).

So the essay question is: do you campaign differently on hot v cold campaigns, and if so, how? Here are some initial thoughts:

Poverty in Nigeria: Some New Facts

Mark Roland Thomas's picture
The World Bank and the Nigerian Bureau of Statistics (NBS) have recently completed an in-depth analysis of Nigeria’s last set of household survey statistics, which were compiled in 2010 but until recently not fully understood.

The results suggest strangely mixed conclusions. In certain ways, poverty trends in Nigeria over the past decade were better than has been widely reported, where a story of increasing poverty has been the consensus. And yet poverty is stubbornly high, disappointingly so given growth rates.

Three facts stand out.

Ending Extreme Poverty In Our Generation

Kate Dooley's picture

It sounds impossible.  Unthinkable.  A world free from extreme poverty.  A world in which no child is born to die, no child goes to bed hungry, every child lives a life free from violence and abuse and has quality health care, nutrition and learns in school. This has long been Save the Children’s vision but could now be a shared global vision, and by 2030 perhaps, a reality.

On  May 30, 2013, a special panel of world leaders handed in their recommendations to the United Nations (UN) Secretary General on the future of global sustainable development and they, too, believe this can be our reality.

Were Gordon Brown and I right? Were poor children actually left behind by the Millennium Development Goals for education?

Adam Wagstaff's picture

It’s quite fun being picked up by a prime minister. Not literally of course. Unless you happen to be a baby seized from your mother’s arms during an election campaign, in which case it must be rather exciting, and quite possibly the highlight of the day. No, I mean being picked up in print. 

In a recent Washington Post op-ed, former UK Prime Minister Gordon Brown, and current United Nations’ Special Envoy for Global Education, cited a Let’s Talk Development blog post of mine asking whether inequality should be reflected in the new international development goals. Toward the end of the post I presented some rather shocking numbers showing how – in a large number of developing countries – the poorest 40% have made slower progress toward key MDG health targets than the richest 60%. Although I didn’t actually offer any evidence on education, I argued: “If inequalities in education and health outcomes across the income distribution matter, and if we want to see “prosperity” in its broadest sense shared, it looks like we really do need an explicit goal that captures inequality.


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