Inequality and Shared Prosperity

Improvements in shared prosperity have stalled. Average income growth alone is not a sufficient marker of development, so it is important to track shared prosperity, a measure of the inclusiveness of growth.

The Global Prosperity Gap, a new indicator of shared prosperity used by the World Bank, tracks how far the world is, on average, from a threshold of $25 per person per day with a specific emphasis on the incomes of the poorest.

Progress in reducing the Prosperity Gap stalled since the pandemic, highlighting a slowdown in inclusive income growth over this period.

High inequality can reflect a lack of opportunities for socioeconomic mobility, which can further hinder prospects for inclusive growth and poverty reduction over time.

Around one-fifth of the world’s population lives in countries with high inequality. Today, high levels of income or consumption inequality are concentrated among countries in Sub-Saharan Africa and in Latin America and the Caribbean.

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Faster and more broad-based growth is needed to accelerate progress in achieving shared prosperity. At current growth rates, a typical upper-middle-income country will need 100 years to close the Prosperity Gap. The number of years needed can be reduced if income growth is substantially faster or more inclusive. Countries can achieve the same level of prosperity with less growth and a decrease in the level of inequality.

How the World Bank monitors economic inequality

To effectively address inequality, we first need to measure it accurately. The World Bank’s Poverty and Inequality Platform provides Gini index estimates—a measure of how equally (or unequally) income or consumption is distributed among a population—for 172 countries, covering about 98 percent of the world’s population. This valuable tool helps assess the level of economic inequality in these countries. One reason we chose the Gini index is because of its long history of use and familiarity to a broader audience.

The data from this platform underpins a new global indicator we introduced in 2024 as part of the World Bank’s Corporate Scorecard: The number of countries with high inequality, defined as those with a Gini index above 40.

Investing in better data to strengthen policy making

More accurate and timely data will help improve how we measure and monitor economic inequality, which is crucial for developing better policies.

The World Bank actively works with countries to improve the quality of their welfare data. This includes building stronger partnerships with national statistical systems, expanding the use of tax and administrative data to bridge data gaps, and developing innovative methods to better capture income and wealth distributions.

For example, as part of the 21st replenishment of the International Development Association (IDA21), our fund for low-income countries, we are committed to helping 30 IDA countries invest in household surveys, empowering them to design better, evidence-based policies.

The World Bank’s mission to end poverty and boost shared prosperity on a livable planet envisions a world where growth is not only robust but also broad-based. That means systematically including people across all income levels, especially those at the bottom of the distribution.

To achieve these goals, we need to understand the drivers of economic inequality. That requires better data, stronger partnerships, and open dialogue. While challenges remain, our commitment to evidence-based policy making and collaboration will continue to guide our efforts to ensure that growth benefits all and that no one is left behind.

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