Sharing Prosperity: Policy Innovations to Tackle Economic Inequality

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00:18 At the World Bank,

00:19 tackling inequality is central to our shared prosperity agenda.

00:23 Today's events reflects our broader commitment

00:26 to evidence-based policy and cross-sectoral collaboration.

00:34 Does inequality matter for development?

00:37 How can it not,

00:38 right?

00:38 I mean,

00:39 if you look at the aspects of inequality,

00:41 you can talk about the inequality of opportunity,

00:44 of course,

00:44 of income,

00:45 of wealth,

00:46 and of power,

00:48 right?

00:48 It matters a lot.

00:49 It can sort of really

00:51 hurt development

00:52 a lot if it's too high or if it's unmanageable,

00:55 etc etc.

00:57 But then the real question is,

00:59 OK,

00:59 what do you do about it?

01:00 And is the cure

01:02 often worse than the disease?

01:04 Development is more than economic growth.

01:07 Development

01:08 in many countries is growth with poverty reduction

01:12 and as soon as we have said that

01:14 it is impossible to simply

01:17 ignore inequality because inequality is the

01:19 link between economic growth and the change

01:22 in uh in poverty.

01:27 There are these two systems

01:29 of inequality reproduction which are

01:31 interconnected.

01:32 The short cycle

01:33 is the life cycle.

01:35 OK.

01:35 That short cycle,

01:36 the life cycle,

01:37 OK,

01:37 is taking place,

01:38 of course,

01:39 embedded

01:40 in

01:41 history.

01:41 And the historical cycle is what we mean by the long cycle here.

01:44 If you're going to tackle inequality,

01:46 you can't just stay inside the normal box.

01:48 You have to confront the fact that assets and wealth.

01:53 Uh,

01:53 are crucial in people getting ahead.

01:59 The data from household surveys shows a decline

02:03 in income inequality,

02:04 OK.

02:05 Uh,

02:05 the decline and no change pattern was disproportionately present

02:09 in both the low and high inequality countries.

02:12 How much inequality?

02:13 I know you don't care about levels.

02:14 I do care about levels.

02:16 Is it

02:17 going up or down?

02:18 and what level of inequality?

02:20 I think it's a question still that remains,

02:23 uh.

02:24 An MDI can be written

02:26 as the weighted average of specific inequalities.

02:30 Income.

02:32 Health,

02:34 education,

02:34 if you wanna throw wealth,

02:35 wealth,

02:35 but if they're mixed up,

02:37 then it brings down the level

02:39 of inequality

02:40 multi-dimensionally.

02:45 We wanted

02:46 a measure of mobility that reward growth and punish decline,

02:51 uh,

02:52 and

02:53 we wanted.

02:55 It to be also progressing and growth to be coming from

03:00 the bottom of the distribution.

03:05 Among many predictors,

03:07 uh,

03:07 many possible predictors,

03:08 the quality of public education stands as one of the most important,

03:12 um,

03:14 uh,

03:14 correlates of upward income mobility.

03:17 Domestic revenues in,

03:18 um,

03:19 the global South,

03:20 remain really low,

03:22 and in terms of providing essential public goods,

03:25 it's very sketchy.

03:29 We're very used to using data and thinking of data as informing research,

03:33 but I want to talk a little bit about

03:35 looking at what the research tells us about what should be on

03:38 our data agenda because I think that's a really sort of important contribution

03:43 where the World Bank can

03:44 can help to play a role.

03:45 The first time the bank

03:46 has inequality explicitly as a statement.

03:50 In the mission,

03:51 uh,

03:52 in the new,

03:53 uh,

03:53 World Bank documents,

03:54 and in the corporate scorecard,

03:56 we have this indicator of the number of countries with high inequality.

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At the World Bank, tackling inequality is central to our shared prosperity agenda. Today's events reflects our broader commitment to evidence-based policy and cross-sectoral collaboration. Does inequality matter for development? How can it not, right? I mean, if you look at the aspects of inequality, you can talk about the inequality of opportunity, of course, of income, of wealth, and of power, right? It matters a lot. It can sort of really hurt development a lot if it's too high or if it's unmanageable, etc etc. But then the real question is, OK, what do you do about it? And is the cure often worse than the disease? Development is more than economic growth. Development in many countries is growth with poverty reduction and as soon as we have said that it is impossible to simply ignore inequality because inequality is the link between economic growth and the change in uh in poverty. There are these two systems of inequality reproduction which are interconnected. The short cycle is the life cycle. OK. That short cycle, the life cycle, OK, is taking place, of course, embedded in history. And the historical cycle is what we mean by the long cycle here. If you're going to tackle inequality, you can't just stay inside the normal box. You have to confront the fact that assets and wealth. Uh, are crucial in people getting ahead. The data from household surveys shows a decline in income inequality, OK. Uh, the decline and no change pattern was disproportionately present in both the low and high inequality countries. How much inequality? I know you don't care about levels. I do care about levels. Is it going up or down? and what level of inequality? I think it's a question still that remains, uh. An MDI can be written as the weighted average of specific inequalities. Income. Health, education, if you wanna throw wealth, wealth, but if they're mixed up, then it brings down the level of inequality multi-dimensionally. We wanted a measure of mobility that reward growth and punish decline, uh, and we wanted. It to be also progressing and growth to be coming from the bottom of the distribution. Among many predictors, uh, many possible predictors, the quality of public education stands as one of the most important, um, uh, correlates of upward income mobility. Domestic revenues in, um, the global South, remain really low, and in terms of providing essential public goods, it's very sketchy. We're very used to using data and thinking of data as informing research, but I want to talk a little bit about looking at what the research tells us about what should be on our data agenda because I think that's a really sort of important contribution where the World Bank can can help to play a role. The first time the bank has inequality explicitly as a statement. In the mission, uh, in the new, uh, World Bank documents, and in the corporate scorecard, we have this indicator of the number of countries with high inequality.

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