Inequality in a global perspective

The basic story of global inequality in the last three decades has been an overall decline, but one which is composed of quite intricate patterns. There has been a decline in between-country inequality as China and India have grown relative to the US and other rich countries. This has been accompanied by an increase in within-country inequality, but this is itself composed of rising inequality in some countries such as China, India, and the US, and declining inequality in other countries, including large economies in Latin America. Section II of the paper reviews these patterns, highlighting country diversity to make the central point that policy matters. Section III addresses a normative question—what relative weight should be given to within-country and between-country inequality in making an overall global assessment? This section brings on board recent philosophical discourse, including on inequality of opportunity in a global frame. Section IV returns to the ‘policy matters’ theme and takes up global constraints on national redistribution policy in a globalized world: for example, a race to the bottom on taxation to attract and keep capital and talent, and possible global institutional responses to alleviate these constraints.