Transcript
A (0:05)
Hello, I'm Rajesh Merchandani and thanks for joining me for this edition of the CGD podcast. Now, inequality has been at the forefront of the political agenda for several years. It certainly was high on the agenda at the recent meetings of the IMF and the World bank in Lima, Peru. Two things have put it there. Firstly, developing countries share of global economic output has gone up, which means that inequality between countries has gone down. But inequality within countries, we are told, has gone up. Nora Lustig isn't quite so sure about that. She's a world expert on poverty and inequality, professor of Latin American Economics at Tulane University in New Orleans where she runs the Commitment to Equity Institute. She's also a member of the World Bank's Global Poverty Commission and and a non resident fellow here at cgd. And she's my guest on this edition of the podcast. Nora, great to have you here.
B (0:57)
Thank you for having me, Rajesh. A great pleasure.
A (1:01)
Now, this idea that inequality within countries has gone up, you're not so sure about it, you don't necessarily agree. What's that based on?
B (1:10)
We've collected data for about 78 countries, developing countries, and in 45 in the last 10, 15 years, inequality actually has declined. In 30, it has increased. And in the rest, which are three, it has not changed. So there are more countries in which we observe a decline than an increase in the developing world. I think that where we find that inequality has increased is in most advanced economies and that's why it's become so front and center an issue.
A (1:42)
So it's so taken because it's in advanced economies, rich countries. That's why in terms of media coverage, it has suddenly become a meme, if you like a theme certainly of political campaigns for the last few years.
B (1:54)
Yes, it has increased obviously in the US which is such a predominant country in terms of world interests. But it also has increased in some iconic countries in middle income countries and the developing world, like Russia, China, India and South Africa, which is an interesting case because after apartheid went away, inequality actually went up instead of coming down.
A (2:20)
Which is counterintuitive to what they were hoping would happen. Why did that happen?
B (2:25)
Because inequality among the black population increased. You had more and more people joining the elite from the black population. You didn't have them before. And that's what resulted in an overall increase in inequality. By the way, among the countries in which inequality has declined, without a doubt, during the period of 2000, 2012, 2013 is Latin America. In all the countries in Latin America, they have experienced a Decline.