Poverty is indisputably central to the World Bank as we sharpen our mission, but inequality matters too, and we underplay or ignore it at our peril. When this message comes from eminent economist and Nobel laureate Joe Stiglitz, Bank staff and the general public tend to sit up and take notice.
If you want an overview of the current debates on inequality, read Kevin Watkins’ magisterial Ryszard Kapuściński lecture. Kevin, who will shortly take over as the new head of the Overseas Development Institute, argues that ‘getting to zero’ on poverty means putting inequality at the heart of the development debate and the post2015 agreement (he doesn’t share my scepticism on that one). As a taster, here are two powerful graphs, showing how poverty will fall globally and in India, with predicted growth rates, in a low/high/current inequality variants. QED, really.
The last few months have been a busy time for inequality. And over the last few days the poor thing got busier still. Inequality is now dancing on two stages. It must be really quite dizzy.
We need an inequality goal. No we don’t. Yes we do
One of the two stages is the post-2015 development goals. At some point, someone seems to have decided that reducing inequality needs to be an explicit commitment in the post-2105 goals. The UN System Task Team on the Post-2015 UN Development Agenda wrote a report on inequality and argued that “addressing inequalities is in everyone’s best interest.” Another report by Claire Melamed of Britain’s Overseas Development Institute argued that “equity, or inequality, needs to be somehow integrated into any new framework.” Last week a group of 90 academics wrote an open letter to the High Level Panel on the Post 2015 Development Agenda demanding that inequality be put at the heart of any new framework.
Brazil’s success in reducing poverty and income inequality has been widely reported in recent years.
Among the evocative winning photos in the World Bank’s recent “Picture Inequality” contest was one that hit home for me.
It shows a skinny teenager crushing stones so they could be used to construct gravel roads in Nepal. The picture captured the sense of helplessness many youth feel in Nepal, a landlocked country in South Asia that is struggling to recover from a decade-long civil war. And it brought to mind the saying a photograph is worth a thousand words.
The photographer, Niraj Prasad Koirala, 24, of Nepal, was one of 10 winners whose photographs and statements best captured inequality and described how they would make a better world. Koirala’s photo was one of 11 chosen by a panel of experts from 756 photos received between October 25 and December 16, 2012.
"I was very happy when I got to read the winning message from the World Bank. It was my one of the greatest moments in life," says Koirala.
The rich in the West are getting richer. Many countries have experienced a sharp concentration of incomes over the last three decades. The top 1% of Americans have doubled their share of national income (from 8 to 17%) since Ronald Reagan was inaugurated 32 years ago – see graph, source here. The elite in other advanced economies, including, Australia, the UK, Japan and Sweden, have also gotten a larger share of the pie. We have been able to understand the concentration of incomes at the national level thanks to the study of tax records by enterprising scholars such as Emmanuel Saez, Thomas Picketty and Sir Anthony Atkinson. But until recently, we didn’t know much about the global concentration of incomes (there’s no global tax collector with a similar database).
For those of us following the US Election 2012, the words ‘manufacturing’ and ‘jobs’ are hard to miss. Building on that buzz, The Economist recently conducted a debate: “Will manufacturing return to the West?” While the US election is a good ten days away, the decision on this debate is out: Manufacturing will return to the west. Irrespective of the verdict, both the sides – opposing and defending the motion- have provided numerous insights in to the trends that are unfurling in China and US. Read them here.
Inequality, alongside jobs, is the proverbial elephant in the room amidst the US presidential elections. Joe Stiglitz has a new 'Campaign Stops' blog in the New York Times online that draws on The Economist magazine's special series from earlier this month. Stiglitz discusses the perils of underplaying the great divide between the one percent in the US and the middle class. Meanwhile, on the other side of the debate, Kevin Hasset of the American Enterprise Institute along with Aparna Mathur, write in the WSJ that inequality studies that focus mainly on pre-tax incomes are flawed because they overlook transfer payments such as food stamps, unemployment insurance and other safety net programs. Read the article here.
Our guest blogger Duncan Green has a new edition of his book out. What follows is the announcement.
Rooted in decades of Oxfam’s experience across the developing world, Duncan Green’s book From Poverty to Power argues that it requires a radical redistribution of power, opportunities, and assets to break the cycle of poverty and inequality and to give poor people power over their own destinies. The forces driving this transformation are active citizens and effective states. The book has received great acclaim since it was first published in 2008 and the updated version published on 23rd October is set to reach an even wider audience, helping to spark debate about the issues Oxfam works on.
On October 8, President Mohamed Morsi issued a decree pardoning all ‘Arab Spring’ political prisoners. While the decree, if implemented, marks a milestone in Egypt’s hard-fought 21-month-long revolution, the quotient of inequality that contributed to setting it off still remains.
From the Arab Spring to Occupy Wall Street, inequality has risen to the top of social agenda. However, our measures of inequality are often limited to final outcomes, such as income, wealth, and educational achievement, which do not distinguish between the impact on inequality of personal responsibility and that stemming from factors beyond the scope of individual responsibility.
Another day, another, errm Day. Ahead of tomorrow’s International Day for Disaster Reduction (hold the front page….), Debbie Hillier, Oxfam’s Humanitarian PolicyAdviser (right), explores the links between DRR and inequality
I have never understood why disaster risk reduction (DRR) gets so little attention – from governments, donors and the aid system in general. Be honest, how many of you know what the Hyogo Framework for Action is, or know what UNISDR stands for? This is despite the proven effectiveness and – the holy grail - value for money of disaster risk reduction. Frankly speaking, it’s a no-brainer.
We all seem to understand the imperative for prevention when it comes to vaccinations and insurance, but somehow this falls apart when it comes to reducing the impacts of disasters. For national governments, I suppose that time delays between public investment in risk reduction and benefits when hazards are infrequent, and the political invisibility of successful risk reduction can be pressures for a NIMTOF (Not in My Term of Office) attitude that leads to inaction. And donors prefer the Superman of high profile disaster response to the Clark Kent of disaster risk reduction.