HUMANITY DIVIDED Confronting inequality in Developing Countries Almudena Fernandez, Bureau for Policy and Programme Support, UNDP Dialogue on Inequality, Istanbul 21 January 2015
HUMANITY DIVIDED: Confronting inequality in Developing Countries
Apr 21, 2017
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HUMANITY DIVIDEDConfronting inequality in Developing Countries
Almudena Fernandez, Bureau for Policy and Programme Support, UNDPDialogue on Inequality, Istanbul
21 January 2015
1
OUTLINE
1 Conceptual Framework
2 Inequality in developing countries: what has happened and why
3 Policy framework
TAKING THE DEBATE FORWARD
Outcomes and opportunities are not independent but in fact are highly interdependent
Although inter-dependent, inequality of outcomes and opportunities have different underlying drivers
horizontal inequalities are of special concern as they tend to be very stubborn and persistent over time.
05/02/2023 Footer Text 4?INEQUALITY: WHAT HAS
HAPPENED AND WHY
INCOME INEQUALITY CHANGES IN DEVELOPING COUNTRIES
Africa Arab Asia& Pacific
E&CIS Latin America& Caribbean
Developing countries
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-7%
0%
13%
35%
-5%
11%
Income Inequality Trends by RegionPopulation-weighted Average Change in
the Gini Index ( Early 1990s to Late 2000s)
Chan
ge %
• Income Inequality rose by 35% in Eastern Europe and the CIS and 13% in the Asia the Pacific
• Meanwhile, it fell in both Sub-Saharan Africa by 7% and in the Latin America and Caribbean region by 5%.
Source: UNDP, Humanity Divided
ECONOMIC PERFORMANCE AND INCOME INEQUALITY
Low-income (
No chan
ge)
Low-income (
Moved to
lower
middle)
Lower-middle
income (
No chan
ge)
Lower-middle
income (
Moved to
upper middle)
Lower-middle
income (
Moved to
high-in
come)
Upper-middle
income (No ch
ange
)
Upper-middle
income (Moved
to high
-income)
-10%-5%0%5%
10%15%20%25%30%
8%
17%
-3%
25%21%
-7%
1%
Income Inequality Trends by Income GroupPopulation-weighted Average Change in the Gini Index ( Early 1990s
to Late 2000s)
Income Status Groups
Chan
ge %
Source: UNDP, Humanity Divided
LOW INCOME LOWER-MIDDLE INCOME
UPPER-MIDDLE INCOME
DRIVERS OF INCOME INEQUALITY
Technical Change
Financial and trade globalization
Domestic policies
Not every country that had above average growth during this period saw inequality rise. And not every country with below average growth saw inequality fall.
In the last 20 years, of 24 developing countries with above average growth (3% or more), 11 countries experienced an increase in inequality but 13 countries were able to maintain or lower inequality.
DO WE HAVE TO SACRIFICE FASTER GROWTH FOR GREATER EQUITY?
THE REDISTRIBUTIVE IMPACT OF FISCAL POLICY IN DEVELOPING COUNTRIES
Upper-middle
0%
2%
4%
6%
8%
10%
12%
Change in the Gini Index of Income Inequality Post-Taxes and Transfers
(Late 2000s)
Income group
Chan
ge in
Ineq
ualit
y (%
)
• In the majority of countries, taxes and transfers had an inequality reducing effect.
• The average redistributive impact of taxes and transfers was 11% in Upper-Middle Income countries, 4% in Lower-Middle and 3% in Low-Income countries.
• Yet, country experiences vary widely. Even among low and lower middle income countries there are cases where taxes and transfer reduce inequality by more than 30%
Source: UNDP, Humanity Divided
INCOME INEQUALITY IS RELATED TO INEQUALITY IN WELL-BEING
Sub-Sa
haran Afric
a
Middle Eas
t
South Asia
East A
sia
Latin Ameri
ca & Cari
bbean0.01.02.03.04.05.06.07.08.09.0
10.0
Health and nutrition outcomesRatio of top to bottom wealth quintiles
(late 2000s)
Under-5 Mortality Rates Stunting RatesFemale Malnourishment
Ratio
of o
utco
mes
by
quin
tile
• Under-5 mortality rates are higher by more than 50% for children in the bottom wealth quintile as compared to children in the top wealth quintile, in all regions
• Women from the bottom wealth quintile are up to 9 times more likely to be malnourished compared to women from the top wealth quintile
Source: UNDP, Humanity Divided
05/02/2023 Footer Text 11
• Gender inequality has declined for some indicators.
• The F/M ratio of total years of education increased, on average, from 82% in 1990 to 91% in 2010.
• The global ratio of F/M employment rates rose from 62% in 1990 to 70% in 2010.
• Exception:• Worsening job segregation in industrial
sector.• Wage gaps remain large and widening in
many countries.
GENDER INEQUALITY
05/02/2023 Footer Text 12
Reasons to be concerned about trends. • Employment equality substantially lags
educational improvements. • Closing educational gaps not sufficient in order
to achieve gender equality. • Gaps in political representation remain wide.
Public policy does not reflect women’s life conditions and perspective in allocation of resources.
GENDER INEQUALITY
05/02/2023 Footer Text 13
?HOW TO ADDRESS INEQUALITY
A COMPREHENSIVE POLICY FRAMEWORK
05/02/2023 Footer Text 15
You can download the report at:
http://on.undp.org/vLKqj
THANK YOU
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