| Abstract: |
This paper examines the current global scene of within-nations distributional
disparities. There are three main conclusions: first, that the statistical
evidence for the ‘upwards’ side of the “Inverted-U” between inequality and
income per capita seems to have vanished, as many lowand low-middle income
countries now have a distribution of income similar to that of most
middle-income countries (other than those of Latin America and Southern
Africa). That is, half of Sub-Saharan Africa and many countries in Asian,
including India, China and Vietnam, now have an income distribution similar to
that found in North Africa, the Caribbean and the secondtier NICs. And this
level is also similar to that of half of the first-tier NICs, the
Mediterranean EU and the Anglophone OECD (excluding the US). As a result,
about 80% of the world population now live in countries with a Gini around 40.
So, the pre-globalisation statistical evidence for the hypothesis that posits
that (for whatever reason) from a distributional point of view “things have to
get worse before being able to get better” is rapidly drawing to a close.
Second, that among middle-income countries it is only Latin America and
Southern Africa that are living in an inequality limbo of their own. And
third, that within an overall trend of rising inequality, there are two
opposite distributional forces at work. One is ‘centrifugal’, and takes place
at the two tails of the distribution—leading to an increased diversity across
country in the shares appropriated by the top 10 percent and bottom forty
percent. The other is ‘centripetal’, and takes place in the middle—leading to
a remarkable uniformity across countries in the share of income going to the
half of the population located between deciles 5 to 9. Therefore,
globalisation is creating a situation where virtually all the within-nation
distributional differences are the result of what the very rich and the poor
are able to appropriate. In turn, it seems that regardless of the political
settlement at work current distributional outcomes are characterised by half
of the population (located in the middle and upper-middle of the distribution)
acquiring strong ‘property rights’ over half of the national income. The other
half, however, seems to be increasingly up for grabs between the very rich and
the poor. And if what really matters in distributional terms is the
income-share of the rich—because the rest ‘follows’ (middle classes able to
defend their shares, and workers with ever more precarious jobs in ever more
‘flexible’ labour markets)—everybody attempting to understand the
within-nations disparity of inequality (including myself) should always be
reminded of this basic distributional fact following the example of Clinton’s
campaign strategist: by sticking a note in our notice boards saying “It is the
share of the rich, stupid”. |