The Globalization of Inequality - Softcover

Bourguignon, Francois

Softcover

ISBN 10: 0691175640 ISBN 13: 9780691175645

Verlag: Princeton Univers. Press, 2017

Inhaltsangabe

In The Globalization of Inequality, distinguished economist and policymaker François Bourguignon examines the complex and paradoxical links between a vibrant world economy that has raised the living standard of over half a billion people in emerging nations such as China, India, and Brazil, and the exponentially increasing inequality within countries. Exploring globalizations role in the evolution of inequality, Bourguignon takes an original and truly international approach to the decrease in inequality between nations, the increase in inequality within nations, and the policies that might moderate inequalitys negative effects. An informed and original contribution to the current debates about inequality, this book will be essential reading for anyone who is interested in the future of the world economy.

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François Bourguignon is professor emeritus and former director at the Paris School of Economics. From 2003 to 2007 he was chief economist and senior vice president of the World Bank.

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"François Bourguignon's book stands out for its ability to combine global sweep with attention to minutiae, its passionate concern for the world's burgeoning inequality, and dispassionate analysis of the causes behind these growing disparities. An amazing amount can be learned from this slim volume on inequality within and across nations."--Kaushik Basu, chief economist and senior vice president of the World Bank

"François Bourguignon once again demonstrates his position as one of the world's leading thinkers on inequality. In this book, he stresses that careful attention must be paid to the distinction between global and national inequality. Bourguignon sets forth policies for achieving both convergence of global standards of living and economic efficiency, and he warns that inequality profoundly threatens social stability. May the hopeful part of his message prevail."--Gary Fields, author of Working Hard, Working Poor: A Global Journey

"In this tour de force, François Bourguignon shows how the seemingly paradoxical phenomena of rising inequality within countries and falling inequality between countries are related to each other, and caused by globalization. Written in a style accessible to a general audience, this excellent work by a global leader in inequality analysis will have lasting value."--Ravi Kanbur, Cornell University

"This book deals with extremely topical issues related to inequality. Bourguignon is exceptionally well-qualified to provide an overview of recent trends, tease out the implications of the global-versus-national perspective on inequality, and seriously examine the factors at work as well as promising policy responses."--Brian Nolan, University of Oxford

"An excellent treatment of a very important subject from a leading researcher in the field."--Stephan Klasen, University of Göttingen

"This work makes a significant contribution to the general understanding of globalization's influence on inequality. While much is being said on the topic, this book is a rarity in being both accessible and informed."--Jean-Yves Duclos, Laval University

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The Globalization of Inequality

By François Bourguignon, Thomas Scott-Railton

PRINCETON UNIVERSITY PRESS

Copyright © 2015 Princeton University Press
All rights reserved.

ISBN: 978-0-691-17564-5

Contents

Preface to the Paperback Edition, vii, 
Foreword to the English Edition, xvii, 
Introduction Globalization and Inequality, 1, 
Chapter 1 Global Inequality, 9, 
Appendix to Chapter 1 Detailed Evidence on the Recent Changes in Global Inequality, 41, 
Chapter 2 Are Countries Becoming More Unequal?, 47, 
Chapter 3 Globalization and the Forces behind the Rise in Inequality, 74, 
Chapter 4 Toward a Fair Globalization: Prospects and Principles, 117, 
Chapter 5 Which Policies for a Fairer Globalization?, 146, 
Conclusion Globalizing Equality?, 184, 
Index, 191, 

CHAPTER 1

Global Inequality

Global inequality is defined as the level of inequality between all inhabitants of the world, thus combining rich and poor people in Latin America as well as in Europe or in the United States. Although this topic has not received much attention, it presents a rather complex combination of inequality between nations and inequality within nations. This has two major implications. First, global inequality is considerably higher than the inequality we see on average at the national level, given that it combines inequalities among citizens of the same country with disparities in average income between countries. Second, the way that global inequality has evolved over time is in fact the conjunction of two different trends, that of inequality within countries between poor and rich in, for example, France or in Nigeria; and that of inequality between countries, that is to say, between the average person in France and the average person in Nigeria. These trends can sometimes balance each other out and sometimes reinforce each other. Following a brief description of the methods that are used to estimate global inequality, this chapter will examine both its levels and its evolution.

Measuring Global Inequality

The first question that comes up when talking about inequality is: inequality of what? There is inequality of individual earnings, family income, wealth, consumer spending, or individual economic well-being. At the global level, I will be interested in inequalities of "standard of living" between citizens of this planet, defined as household income per member as reported in surveys conducted in most countries using representative samples of households. The numbers that I cite in this chapter and in the tables that follow refer to a constant sample of 106 countries (34 developed countries and 72 developing countries) for which at least two surveys are available over the 1990–2010 period, which allows us to take into account the evolution of inequality within these countries and its contribution to changes in global inequality. On average, these 106 countries, which I list at the end of the chapter, represent a little more than 90% of the world's population.

There are several databases that compile the data obtained from these household surveys. For developing countries, I will use the "Povcal" database, which is run by the World Bank, and for developed countries I will use the "OECD Database on Household Income Distribution and Poverty."

In order to make comparisons using this national data, it will need to be adjusted in several ways. The first adjustment comes from the fact that we want to express the standards of living observed at the national level through a metric of equivalent purchasing power. Converting incomes earned in pesos, rupees, or CFA francs into dollars (or euros) according to the official exchange rates is easy. However, since the prices, in dollars, for the same goods differ from one country to another, the numbers this would give us would not be truly comparable in terms of purchasing power; $100 does not buy the same volume of goods in New York that it does in Delhi when converted into rupees. We therefore need to adjust official exchange rates so that the conversion into dollars takes into account differences in the price of the same bundle of goods in various countries. International price comparisons make it possible to fine-tune indicators of "purchasing power parity," which in turn enable us to express standard of living in different countries in dollars and the purchasing power of a dollar in the United States in a given year. This adjustment is smaller for developed countries than for developing countries because prices are relatively similar and not too far from prices in the United States in the former. It may be sizable for developing countries, especially the poorest ones. It is not uncommon to need to multiply the numbers obtained using the official exchange rates by 2.5 or more. Absent any further specification, the numbers I will use for standards of living in this chapter will be expressed in the purchasing power of U.S. dollars from 2005.

Another source of incomparability is the way household size is taken into account when estimating the standard of living of an individual. The Povcal data define the standard of living of a person by simply dividing the income (or the consumer spending) of the household to which they belong by the number of household members. The OECD data, on the other hand, refer to income per equivalent adult, each member of the household being given a weight that depends on age and the number of household members. Adjustment is therefore necessary for these two databases to become comparable.

Another, more serious source of heterogeneity within the national data on standards of living we are concerned with is the definition of household "income." In some countries, surveys collect data exclusively on income, in others, on consumer spending. Agricultural income and independent workers' earnings are estimated with varying degrees of imprecision. Income in some surveys includes virtual income, such as the rent implicit in owning one's own house, which is the amount a household could expect to pay if it were to rent its current house at market rates, while others leave these out. Some ignore the role played by taxes and transfers of income that households pay or receive. And so on. Finally, from the perspective of international comparability, the income or consumer spending of households does not take into account the availability of goods and services that are offered for free by the state and that, to varying degrees depending on the country in question, impact the livelihood of the population.

There are two schools of thought as to how we should address the heterogeneity of our sources across countries. The first recommends that we keep the numbers as is — after having converted them into international purchasing power — thus ignoring the preceding sources of heterogeneity. The second says that we should apply a factor of proportionality to the individual datasets such that the average standard of living is consistent with national accounts, deemed to be more homogeneous than household surveys. Thus, some authors normalize household survey data so that the mean standard of living in a country will be equal to per capita household consumption in the national accounts of that country. In what follows, I will be reporting on household survey means as well as on household survey figures normalized by GDP per capita rather than national accounts' private consumption expenditures per capita. GDP includes the public goods delivered by the state and implicitly consumed for free by...

Details zur Ausgabe

• Verlag: Princeton Univers. Press
• Erscheinungsdatum: 2017
• Sprache: Englisch
• ISBN 10: 0691175640
• ISBN 13: 9780691175645
• Einband: Taschenbuch
• Anzahl der Seiten: 224
• Kontakt zum Hersteller: Princeton University Press; https://press.princeton.edu/books; ; 7th Floor, New South Building; PRINCETON; NJ; 8544; USA
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