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Everyone from Time magazine to SciDev.Net seems to be talking about inequality at the moment. [1] Thomas Pikettys book about it is a best seller. [2] Recently, Nobel Prize winner Joseph Stiglitz has also tackled the subject. [3]

Another Nobel laureate, Eric Maskin addressed the issue through a theoretical model recently, as SciDev.Net reported. His analysis augments economists’ theory of international trade by focusing on international production as central to understanding todays global economy. With the globalisation of production, moderately skilled workers in emerging economies get new employment opportunities and unskilled workers do not. Maskins remedy for this is education and training.

The theory is elegant but I am cautious about pinning down one solution, particularly on such a huge and controversial issue as inequality.

Education is certainly part of the answer. But half the world’s working population (around 1.5 billion people) are in subsistence agriculture or the informal sector they are unlikely to get into skilled jobs anytime soon, even with increased education.

It’s also worth saying that education isn’t just about reducing inequality. Earlier this week (8 September), I attended a presentation in Finland on the latest Human Development Report (HDR) by Eva Jespersen, deputy director of the New York HDR Office. Stiglitz, in the report, points to the wider importance of education: not just because it enables individuals to live up to their potential, not just because it leads to increases in productivity: it also enhances the ability of individuals to cope with shocks. [4]

Last week (5-6 September), I joined some 350 development economists at a UN conference looking at the current evidence and new thinking on how to achieve economic equality. [5]

“My recipe for reducing inequality is economic growth, social provision (including education) and redistribution.

Roger Williamson

There were some interesting insights. For example, International Monetary Fund analyst Andrew Berg questioned whether the assumed trade-off between growth and inequality is such an established fact. He also showed that more equal societies do seem to be able to sustain growth for longer. [6]

Research presented at the meeting from UNU-WIDER (the UN University’s World Institute for Development Economics Research) shows that income inequality is falling in Latin America due to economic growth and redistributive social policies by governments over the last 15 years, eroding long-established patterns of extreme inequality. [7]

Top and tail at the conference were Marcelo Côrtes Neri, Brazilian minister for strategic affairs, and former Finnish president, Tarja Halonen. There was a surprising overlap in the insights from politicians from countries that are 79th and 24th in the Human Development Index respectively. Neri reported that extreme poverty (defined as living on less than US$1.25 a day at 2005 prices) in Brazil has decreased by 69 per cent from 2002-12, with half of the impact due to growth and half to redistributive policies. [8]

Both Neri and Halonen stressed the importance of employment and active policies for education, equality and social inclusion. Brazil (starting over the last 20 or so years) and Finland (for much longer) both realised that poverty should not be used as an excuse to avoid starting social programmes for the poor (including those for education) and policies aimed at greater equality and social inclusion. So my recipe for reducing inequality is economic growth, social provision (including education) and redistribution.

Roger Williamson is an independent consultant and visiting fellow at the Institute of Development Studies at the University of Sussex, United Kingdom. Previous positions include organising nearly 80 international policy conferences for the UK Foreign Office and being head of policy and campaigns at Christian Aid.


[1] Joseph Blasi The wealthy and powerful discover inequality (Time, 20 August 2014)
[2] Thomas Piketty Capital in the twenty-first century (Harvard University Press, April 2014)
[3] TEDx The costs of inequality: Joseph Stiglitz at TEDxColumbiaSIPA (YouTube, video published 11 March 2013)
[4] Human development report 2014 (UN Development Programme, 2014)
[5] Inequality — measurement, trends, impacts and policies (UNU-WIDER, accessed 10 September 2014)
[6] Jonathan D. Ostry and others Redistribution, inequality and growth (IMF, February 2014)
[7] Falling inequality in Latin America: Policy changes and lessons (UNU-WIDER, June 2014)
[8] Marcelo Neri Inequality in Brazil: Measurement, trends, impacts and policies (presentation slides, accessed 12 September 2014)

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