We are used to thinking about inequality within countries--about rich Americans versus poor Americans, for instance. But what about inequality between all citizens of the world? Worlds Apart addresses just how to measure global inequality among individuals, and shows that inequality is shaped by complex forces often working in different directions. Branko Milanovic, a top World Bank economist, analyzes income distribution worldwide using, for the first time, household survey data from more than countries. He evenhandedly explains the main approaches to the problem, offers a more accurate way of measuring inequality among individuals, and discusses the relevant policies of first-world countries and nongovernmental organizations. Inequality has increased between nations over the last half century richer countries have generally grown faster than poorer countries.
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This subject is critically important, and this particular book is extraordinary. The stakes are as high as they get. And any social system that loses its moral standing—its legitimacy, in the jargon of social scientists—is a target for rebellion. In this case, optimists focus on the soaring standard of living in countries like Chile, Malaysia, and Taiwan; in the booming commercial zones of coastal China; and in the high-tech cities of southern India.
Pessimists, on the other hand, focus on the chronic economic crisis in Africa and stagnation in much of Latin America. But the matter of income gaps and their causes is extraordinarily complex, so the evidence needs painstaking interpretation. A Lead Economist at the World Bank, and recently a senior associate with the Carnegie Endowment for International Peace, Milanovic has written probably the most comprehensive, thorough, and balanced assessment yet of global inequality.
And, for the most part, it shows the pessimists are right. The statistics describing the gap between rich and poor people on Earth are truly breathtaking. According to a recent report from the World Bank, in about 1.
About 2. And in the same year, according to UNICEF, one billion children—or nearly half the children in the world—were severely deprived. But are these disparities getting worse? Here we have to tread carefully, because the question leads us into a theoretical and statistical minefield. This tripartite distinction is critically important, because each measure of inequality tells us something distinct.
Orthodox economic theory says that rich and poor countries should eventually converge to similar levels of per capita income, because investment should flow from rich countries, where capital is abundant and returns are limited, to poor countries, where capital is scarce and returns are much higher.
If convergence is happening, then GDP in low-income countries should generally grow faster than in high-income countries, and over time the incomes of people in poor countries should reach the level of incomes in rich countries, at which point the distinction between poor and rich will disappear. And, if we look back over a century or more, inequality between incomes in poor countries and those in rich countries has widened.
By his analysis, this kind of inequality has more than doubled since , with only a brief pause in the trend between World War I and World War II. None of the African countries except for Mauritius and none of the Latin American and Caribbean countries except for the Bahamas were left among the rich.
Latin America and the Caribbean, probably for the first time in years, had no country that was richer than the poorest West European country. But many of these countries that have fallen behind have relatively small populations or are marginal in the world economy.
Upbeat economists note that the two really big countries—China and India—are doing exceptionally well, with per capita income growth rates that are two to four times higher than those of rich countries.
Milanovic acknowledges that, according to this measure, global inequality has indeed declined, although only for the last twenty years or so. Yet he argues that this measure is ultimately not very satisfactory. In the last decade, Milanovic has pioneered exactly this kind of measure, and in this book he presents his latest results.
Between and , inequality increased mainly because average incomes in rural Asia—especially in the still-immense rural populations of China, India, and Bangladesh—grew much more slowly than incomes in rich countries. Inequality increased, too, because of a rapidly widening gap between rural and urban incomes in China. Between and , the overall inequality trend reversed itself slightly: while the gap between rural and urban incomes in China continued to grow, the gap between rural incomes in India and China and incomes in rich countries shrank slightly.
So upbeat assessments of the world inequality trend, based on population-weighted measures, are wrong. This is not a prescription for a stable global polity. Milanovic points out that political theorists going back to Aristotle have argued that a large middle class is key to civil peace. The more we live in a truly global society—intimately connected by fiber-optic cables, air travel, and trade—the more the absence of a world middle class matters.
And the more the huge income differences among us matter too, because people care not just about their absolute level of income but also about their relative position in the overall income distribution.
Worlds Apart has too many tables, graphs, and formulas for lazy summertime reading. Yet Branko Milanovic makes a difficult subject remarkably accessible. His expertise and intellectual integrity inform every page. Previous Next. Share this Article facebook twitter linkedin tumblr Email. Related Posts. Toggle Sliding Bar Area.
Worlds Apart: Measuring International and Global Inequality
Branko Milanovic. Many of our ebooks are available through library electronic resources including these platforms:. But what about inequality between all citizens of the world? Worlds Apart addresses just how to measure global inequality among individuals, and shows that inequality is shaped by complex forces often working in different directions. Branko Milanovic, a top World Bank economist, analyzes income distribution worldwide using, for the first time, household survey data from more than countries.
Worlds Apart : Measuring International and Global Inequality
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This subject is critically important, and this particular book is extraordinary. The stakes are as high as they get. And any social system that loses its moral standing—its legitimacy, in the jargon of social scientists—is a target for rebellion. In this case, optimists focus on the soaring standard of living in countries like Chile, Malaysia, and Taiwan; in the booming commercial zones of coastal China; and in the high-tech cities of southern India. Pessimists, on the other hand, focus on the chronic economic crisis in Africa and stagnation in much of Latin America.