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Abstract
Since the 1980s, inequality has been rising in Europe, North America and parts of Asia. How does our understanding of global inequality dynamics change if coverage is extended to the rest of the developing world? To rebalance the perspective on global inequality trends, this paper surveys data and literature on recent inequality trends in Latin America, Asia, Africa and the Middle East. It finds that in these regions there are more countries with falling than rising inequality over the past 20 years, as measured by Ginis of income or consumption inequality. At the global level, therefore, there are signs of inequality convergence, as inequality has been falling in countries with high inequality in the 1990s (particularly Latin America), and rising in historically low-inequality countries. We discuss the political and economic drivers of inequality decline in countries with a steady fall in the Gini. This suggests some common trends across the globe, including the role of democratisation, the rise of new social movements, and the expansion of education and social safety nets and favourable commodity prices, in reducing income disparities. This paper calls for more country-level comparisons of inequality trends, to highlight the multiplicity of paths in this latest phase of globalisation.
Acknowledgements
We would like to thank Paul Segal, Duncan Green, Pedro Mendes Loureiro, Beverley Skeggs, Rana Zincir-Celal and the two anonymous peer reviewers for their helpful comments.
Disclosure statement
No potential conflict of interest was reported by the authors.
This research was made possible through funding provided by the Atlantic Fellows for Social and Economic Equity programme, based at the International Inequalities Institute at the London School of Economics and Political Science.
Notes
Notes
1 Piketty, Capital in the Twenty-First Century; and Scheidel, Great Leveler.
2 Corak, “Income Inequality, Equality of Opportunity”; Wilkinson and Pickett, Spirit Level; and Putnam, Our Kids.
3 Anand and Segal, “Who Are the Global Top 1%?”, discuss the threshold of the global 1%. In fact, even in American terms, it appears that substantial numbers of protesters were not in the 99%. See Moynihan, “In ‘Occupy,’ Well-Educated Professionals.”
4 Milanovic, Global Inequality: A New Approach, 122; and Anand and Segal, “Who Are the Global Top 1%?”
5 Birdsall, Lustig, and McLeod, Declining Inequality in Latin America; López-Calva and Lustig, “Explaining the Decline in Inequality”; and Cornia, Falling Inequality in Latin America.
6 Beegle et al., Poverty in a Rising Africa; and Hassine, “Economic Inequality in the Arab Region.”
7 Piketty and Saez, “Income Inequality in the United States.”
8 Wilkinson and Pickett, Spirit Level.
9 Bourguignon and Morrisson, “Inequality among World Citizens: 1820–1992”; Galbraith, “Global Inequality and Global Macroeconomics”; Milanovic, Global Inequality: A New Approach; Korzeniewicz and Moran, Unveiling Inequality; Anand and Segal, “Who Are the Global Top 1%?”; and Alvaredo et al., World Inequality Report.
10 Bourguignon and Morrisson, “Inequality among World Citizens: 1820–1992.”
11 Korzeniewicz and Moran, Unveiling Inequality; and Treitler and Boatcă, “Dynamics of Inequalities in a Global Perspective.”
12 Milanovic, Global Inequality: A New Approach, 128–33; and see also Anand and Segal, “Who Are the Global Top 1%?”
13 Alvaredo et al., World Inequality Report 2018.
14 For instance: Albrecht and Korzeniewicz, “Systems Perspective Billionaires.”
15 Milanovic, Global Inequality: A New Approach; and Alvaredo et al., World Inequality Report 2018.
16 Kuznets, “Economic Growth and Income Inequality.”
17 Tinbergen, “Substitution of Graduate by Other Labour”; and Goldin and Katz, Race between Education and Technology.
18 Atkinson, Inequality: What Can Be Done?
19 Piketty, Capital in the Twenty-First Century; and Scheidel, Great Leveler.
20 Milanovic, Global Inequality: A New Approach.
21 Engerman and Sokoloff, “Factor Endowments”; Acemoglu, Johnson, and Robinson, “Colonial Origins of Comparative Development”; and Korzeniewicz and Moran, Unveiling Inequality.
22 Alvaredo et al., World Inequality Report 2018.
23 Atkinson and Brandolini, “On Data”; and Jenkins, “World Income Inequality Databases.”
24 Alvaredo and Gasparini, “Recent Trends in Inequality and Poverty”; Lakner, “Global Inequality”; and World Bank, Taking On Inequality.
25 This convergence has been noted and formally tested by others; see for instance: Alvaredo and Gasparini, “Recent Trends in Inequality and Poverty.”
26 Ibid.; and Lakner, “Global Inequality.”
27 Alvaredo and Gasparini, “Recent Trends in Inequality and Poverty.”
28 Cornia, Falling Inequality in Latin America.
29 Lakner, “Global Inequality”; and Scheidel, Great Leveler.
30 Morgan, Extreme and Persistent Inequality.
31 Cornia, Falling Inequality in Latin America; López-Calva and Lustig, “Explaining the Decline in Inequality”; and Azevedo et al., Decomposing the Recent Inequality Decline.
32 López-Calva and Lustig, “Explaining the Decline in Inequality.”
33 Azevedo et al., Decomposing the Recent Inequality Decline.
34 Cornia, Falling Inequality in Latin America.
35 Ibid., 15; This builds on Cornia’s and Roberts’ classification of regime types. For an alternative classification, see: Birdsall, Lustig, and McLeod, Declining Inequality in Latin America.
36 Roberts, “Politics of Inequality and Redistribution.”
37 Huber and Stephens, Democracy and the Left.
38 Robinson, “Political Economy of Redistributive Policies.”
39 Balcázar, “Long-Run Effects of Democracy.”
40 Loureiro and Saad-Filho, “Limits of Pragmatism.”
41 eg Milanovic, Global Inequality: A New Approach.
42 Krongkaew and Ragayah, “Income Distribution and Sustainable Economic Development.”
43 Sharma, Ichauste, and Feng, An Eye on East Asia.
44 Lakner, “Global Inequality”; and Alvaredo et al., World Inequality Report 2018, 107.
45 Alvaredo et al., World Inequality Report 2018, 123–30.
46 Li and Sicular, “Distribution of Household Income”; and Piketty, Yang, and Zucman, Capital Accumulation, Private Property.
47 Phongpaichit, “Inequality, Wealth and Thailand’s Politics.”
48 World Bank, Getting Back on Track.
49 Phongpaichit, “Inequality, Wealth and Thailand’s Politics.”
50 World Bank, Getting Back on Track; and Ikemoto and Uehara, “Income Inequality and Kuznets’ Hypothesis.”
51 Phongpaichit, “Inequality, Wealth and Thailand’s Politics”; Hewison, “Considerations”; and Jones, “Unequal Thailand.”
52 Hewison, “Considerations on Inequality and Politics in Thailand.”
53 Atkinson, Inequality: What Can Be Done?; and Krongkaew and Ragayah, “Income Distribution and Sustainable Economic Development.”
54 Lee, “Racial Inequality and Affirmative Action.”
55 Shari, “Economic Growth and Income Inequality.”
56 Atkinson, “Top Incomes in Malaysia.”
57 Hassine, “Economic Inequality in the Arab Region.”
58 Ianchovichina, Mottaghi, and Devarajan, Inequality, Uprisings, and Conflict; and Hassine, “Economic Inequality in the Arab Region.”
59 Ianchovichina, Mottaghi, and Devarajan, Inequality, Uprisings, and Conflict.
60 Hassine, “Economic Inequality in the Arab Region.”
61 El-Said and Harrigan, “Economic Reform, Social Welfare.”
62 Handoussa and Tzannatos, Employment Creation and Social Protection.
63 Salehi-Isfahani, “Poverty, Inequality, and Populist Politics.”
64 Statistical Centre of Iran, Summary Results.
65 Enami, Lustig, and Taqdiri, Role of Fiscal Policy.
66 World Bank, Taking on Inequality.
67 Shimeles and Nabassaga, Why Is Inequality High in Africa?
68 Onuoha, “Rising Africa.”
69 Sahn, Dorosh, and Younger, Structural Adjustment Reconsidered.
70 Sahn and Stifel, “Urban–Rural Inequality.”
71 World Bank, Taking on Inequality.
72 Bates and Block, “Revisiting African Agriculture.”
73 If we subscribe to the arguments by Piketty, Scheidel and others, that the world wars were the catalysts for inequality decline.
74 Milanovic, Global Inequality: A New Approach.
75 Bates and Block, “Revisiting African Agriculture.”
76 For a similar argument, see the concept of ‘post-neoliberalism’ as an evolution rather than a break with neoliberalism: Grugel and Riggirozzi, “Post-Neoliberalism in Latin America,” 6.
77 eg Korzeniewicz and Moran, Unveiling Inequality.
Additional information
Notes on contributors
Rebecca Simson
Dr Rebecca Simson is the David Richards Junior Research Fellow in economic history at Wadham College, University of Oxford. Her past research has focused on state building, social stratification and inequality in postcolonial East Africa.
Mike Savage
Professor Mike Savage is the Marin White Professor of Sociology at the London School of Economics and co-Director of the LSE’s International Inequalities Institute. His past work, including his book Social class in the 21st century, has contributed to the revival of the study of social class in sociological analysis. His most recent book, The challenge of inequality: social change and the weight of history, will be published in 2020 by Harvard University Press.