Oct 15, 2013 - because of globalization, role of social media and political (crony) ..... against country dummies âexp
Global income inequality: current trends and future developments Branko Milanovic, Lead Economist Policy Research Talk October 15, 2013 World Bank Development Research Group Washington, DC Branko Milanovic
A. National inequalities mostly increased
Branko Milanovic
Ginis in 1988 and twenty years later 1988
2008
Change
Average Gini
36.0
38.5
+2.5
Pop-weighted Gini GDP-weighted Gini Countries with higher Ginis (38)
33.9
37.3
+3.4
32.2
36.4
+4.2
33.7
38.5
+4.8
Countries with lower Ginis (20)
40.5
37.7
-2.7
From final-complete3.dta and key_variables_calcul2.do
Branko Milanovic
Ginis in 1988 and 2008 60
HND COL
BOL
BRA
PRY
40
NGA
LKA CHN-R
USA ISRCIV
DOM CRI URY ARGMYS SLV UGA PHL
IND-U
IDN-U PRT CANKOR GBR JOR POL FRA GRC BGD ITA JPN DEU EGY ESP IDN-RIND-R PAK IRL NLD BGRBEL AUT FIN HUN DNK CZE SVK SVN LVA
CHL MEX
VEN
THA MRT TUR
CHN-U
Branko Milanovic
20
30
Gini in 2008
50
ECU
20
From key_variables_calcul3.do
30
40 Gini in 1988
50
60
60
Ginis in 1988 and 2008 (population-weighted countries)
BRA
MEX USA
40
RUS
CHN-R
CHN-U
IND-U
30
Gini in 2008
50
NGA
IND-R 20
Branko Milanovic
20
From key_variables_calcul3.do
30
40 Gini in 1988
50
60
70
Inequality and income, 1950-2012
50
China
Russia
40
United States
30
Gini coefficient
60
Brazil
1000 5000 10000 GDP per capita in PPP dollars
Use fc:…\finance_and_development\figure2.do Use gdpppppreg4.dta
40000
Issues raised by growing national inequalities • Inequality as one of the causes of the global financial crisis. • Real inequality greater than measured inequality because rich people refuse to participate in surveys and hide their income and assets (growing issue) • Perception of inequality outstrips real increase because of globalization, role of social media and political (crony) capitalism (example of Egypt) • The effect on the political system Branko Milanovic
Difficult to explain developments using a single theory
Branko Milanovic
No downward portion plotted against time or income: example of China 1964-2007 Against time
45 40 35 30
30
35
40
45
50
Against income
1960
1970
1980 1990 2000 year when the survey was conducted
Combined Gini coefficient
Fitted values
twoway (scatter Giniall year if contcod=="CHN" & year>1960, connect(l) ylabel(30(5)45)) (qfit Giniall year if contcod=="CHN" & year>1960) Based on giniall.dta
2010
0
2000 4000 6000 constant 2005 ppp, based on icp05 Gini from my allGini file
8000
Fitted values
twoway (scatter Giniall gdpppp if contcod=="CHN" , connect(l) ylabel(30(5)50)) (qfit Giniall gdpppp if contcod=="CHN") From global_new2.dta
30
30
35
35
40
40
45
45
50
No downward portion plotted against time or income: example of the USA, 1950-2010
10000
1940
1960 1980 2000 year when the survey was conducted
twoway (scatter Giniall year if contcod=="USA", connect(l) ylabel(30(5)45)) (qfit Giniall year if contcod=="USA" & year>1960, legend(off)) From allginis.dta.
