In the new issue of Review of International Political Economy, Erin Lockwood looks at studies of global inequality and argues that "IPE should regard the unequal global distribution of wealth and income as a central research concern and outlines a research agenda for doing so."
Here are some of my thoughts on that.
Global ineq is the product of 3 forces:
(A) changes in within-national ineq,
(B) convergence/divergence of mean county incomes,
and
(C) population changes.
Let's look at each of them.
Global ineq is the product of 3 forces:
(A) changes in within-national ineq,
(B) convergence/divergence of mean county incomes,
and
(C) population changes.
Let's look at each of them.
Within-national inequalities have been studied over the past 200y, even if much more so recently. They are not a subject of global inequality studies. So I will leave them out.
Convergence is studied in growth economics. But not the same one about which we care in global ineq.
Convergence is studied in growth economics. But not the same one about which we care in global ineq.
Convergence from growth econ is unweighted convergence (what I call Concept 1). Every country counts the same.
What matters for global ineq is population-weighted convergence (Concept 2): whether poor and *populous* countries are catching up.
What matters for global ineq is population-weighted convergence (Concept 2): whether poor and *populous* countries are catching up.
Figure below shows how the two inequalities have moved since 1960.
The decline of the population-weighted ineq has accelerated since ~1980s due to first, China's and now India's fast growth. (And also Vietnam, Indonesia etc).
The decline of the population-weighted ineq has accelerated since ~1980s due to first, China's and now India's fast growth. (And also Vietnam, Indonesia etc).
But Concept 1 shows *divergence* until ~2000, and mild convergence only after that. Africa plays a key role in the movement of Concept 1 inequality.
So (B) can be a topic of IPE: more specifically how can growth rates of poor & *populous* countries be raised.
So (B) can be a topic of IPE: more specifically how can growth rates of poor & *populous* countries be raised.
Topic C deals with population.
It can be framed in Ehrlich's terms (birth control in poor countries) or in terms of migration. The former is a non-starter; so economic migration from poor to rich countries remains.
It can be framed in Ehrlich's terms (birth control in poor countries) or in terms of migration. The former is a non-starter; so economic migration from poor to rich countries remains.
Thus, we have two topics where global inequality is, as Erin calls it, a dependent variable:
--growth of poor & populous counties
--economic migration.
--growth of poor & populous counties
--economic migration.
How about treating global inequality as an independent variable? What are the consequences of high global inequality?
-- Migration: if 60% of your income is determined by where you live, high inter-country inequality clearly produces strong incentives for migration.
-- Migration: if 60% of your income is determined by where you live, high inter-country inequality clearly produces strong incentives for migration.
-- War and conflict. Is unequal development likely to lead to more interstate wars?
-- Fiscal evasion and movement of funds between different jurisdictions (to the extent that it is motivated by unequal development).
-- Fiscal evasion and movement of funds between different jurisdictions (to the extent that it is motivated by unequal development).
Finally, note that govt-related tools that we normally have in mind when we deal with within-national inequalities do not play a role here because there is no global government. Thus there are no global taxes or a global minimum wage.
But we can look at the role of IOs (IMF, World Bank, ILO, WTO) in widening or not global inequality (a topic addressed by political philosophers like @ThomasPogge).
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