Understanding Inequality: Its Impact and Distinction from Poverty

1. Inequality: Why Does it Matter; How Does it Differ to Focussing on Poverty? Duncan Green Oxfam GB Ambedkar University November 2013

2. What do we mean by Poverty? • Absolute v Relative income • Multidimensional – narrow (eg Human Development Index) • Asking Poor People (Voices of the Poor) • Well/ Ill being • Static v Dynamic – fear of tomorrow

3. What’s happening to income poverty?

4. What do we mean by inequality? • Income • Opportunity: soft and hard versions • Outcomes • Multidimensional inequality • Vertical v Horizontal (spatial) • Intergenerational (temporal) • Measurement: Gini v deciles • Power

5. Inequality is a rising concern

6. Shared by just about everybody • IMF links to major financial crises (rich elites recycling $) and social cohesion • World Bank highlights how much harder it is to end poverty in unequal countries (eg South Africa) • Stiglitz linking to political capture and positive feedback loops from influence • Planetary boundaries and the finite cake • Behavioural economics and link to well-being

7. What’s happening to global income inequality? • Global Gini improving due to rise of BRICS • Global extremes getting worse • 100 richest people = 4x poorest 1.4bn • Gini within countries mixed • Deteriorating in all but 4 G20 countries • But improving in many non-G20 countries, eg in Latin America

8. Globally, it’s the 2%

9. G20 doing badly

10. And good and bad performers converging

11. Brazil v the RICS

12. Brazil’s success story on inequality • Over last decade, incomes of the poorest Brazilians have risen more than x5 faster than those of the richest • Hunger ‘largely dealt with’ • Cf New Deal or post War UK • Women > men • Blacks > whites • Northeast > Southeast

13. Cutting inequality needs much more than social protection • Rights-based constitution • Centre-left government • Full employment • Rising minimum wage, universal pension • An integrated and effective public administration • A high level of public participation • Political and economic stability

14. Gabriel Palma the most interesting • Deciles tell you more than Gini (Convergence) • In all countries, deciles 5-9 have (and keep) about 50% of wealth • Rest is up for grabs between top 10% and bottom 40% • Key political question is whether middle class allies with top or bottom

15. What might an NGO inequality agenda look like? • Structures matter (oil v jobs) • Taxation – quantity and quality • Ceilings v floors (eg land) • Redistribution > income (eg tertiary ed = 16% social spending in Brazil) • More on attitudes and beliefs: gender, but also caste, ethnicity, children, disability • Focus on inequality between or within countries?

17. Oxfam India on Inequality • Income • Missing Jobs, Low Wages and Discrimination • Education & Health • Public v Private • To Have or Not a Toilet • About Networks and Chances • Rents and Redistribution

18. Thanks!