Global Inequality A lecture by Dr Christopher Kollmeyer.
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Transcript of Global Inequality A lecture by Dr Christopher Kollmeyer.
Global Inequality Global Inequality
A lecture by Dr Christopher A lecture by Dr Christopher KollmeyerKollmeyer
Lecture OutlineLecture Outline
Lecture Addresses Three Questions:1. What’s the extent of global inequality
today? (answer: massive)
2. What’s the trend in global inequality? • Within countries (answer: becoming more
unequal)• Between countries (answer: debatable)
3. What are the dominant explanations?• Modernization (neoliberal) theory• Dependency (world-systems) theory
The Champagne Glass of Inequality: The Champagne Glass of Inequality: Share of Global Income by QuintilesShare of Global Income by Quintiles
Bottom 60 percentile have less than 6% of the world’s income.
World’s Top-Ten World’s Top-Ten Billionaires, 2007Billionaires, 2007
Name Wealth in
Billions
Country
Source of Wealth
William Gates III £28 United States Microsoft Founder
Warren Buffett £26 United States Investments
Carlos Slim Helu £24 Mexico Telephones
Ingvar Kamprad £17 Sweden IKEA
Lakshmi Mittal £16 India Steel Co.
Sheldon Adelson £13 United States Casinos
Bernard Arnault £13 France Luxury Goods
Amancio Ortega £12 Spain Apparel
Li Ka-shing £12 Hong Kong Diversified Industries
David Thomson & family £11 Canada Media
Note: Scotland’s GDP equals about £80 billion per year.
Global PovertyGlobal PovertyThe World Bank estimates that 1.3 billion people live on less than 50p
per day ($1)
Living standard of the Living standard of the global poorglobal poor
Life Expectancy and Life Expectancy and IncomeIncome
Between-Country Between-Country Inequality: Inequality:
The Global Distribution of The Global Distribution of Income and PopulationIncome and Population
020406080
100
HighIncome(n=51)
MiddleIncome(n=104)
LowIncome(n=63)
% of World's Pop% of World's Income
15
166
6025
78
Wealthiest: Western European countries, British Off-Shoots, and Japan
Poorest: Sub-Saharan African and South Asian countries
Geography of Global InequalityGeography of Global Inequality
The North-South DivideThe North-South Divide
This picture of the Earth at night shows the wealthy Global North, illuminating its communities at night, and the much poorer Global South, which can’t afford to do so.
0
5
10
15
20
25
30
35
SouthAfrica
Brazil USA Russia UK Sweden Japan
Within-Country Inequality: Income Within-Country Inequality: Income share of richest 20share of richest 20thth percentile to percentile to
poorest 20poorest 20thth percentile percentile.
Question 2:What are the recent trends
in global income inequality?
Within countries: Becoming more unequal in most countries
Between countries: Becoming more unequal, except for China and other countries in East Asia, which are catch up with the West.
Example of Within-Country Income Inequality: The United
States, 1913-2002
Source:Thomas Piketty and Emmuanuel Saez. 2003. “Income Inequality in the United States, 1913 2002.” Quarterly Journal of Economics.
Inequality rising in most Inequality rising in most Anglo-Celtic countries, but Anglo-Celtic countries, but remaining steady in most remaining steady in most
Continental European countriesContinental European countries
Emmanuel Saez. 2004. Income and Wealth Concentration in a Historical and International Perspective. National Bureau of Economic Research, USA.
Changes in Between-Changes in Between-Country Income Inequality, Country Income Inequality,
1950-20001950-2000
Source: Sutcliffe, B. 2004 “World Inequality and Globalization.” Oxford Review of Economic Policy, Vol 20, No. 1
Begin of decline
Begin of China’s economic rise
Absolute vs Relative Absolute vs Relative InequalityInequality
A Hypothetical ExampleA Hypothetical Example
1970 2000Country A £1,000 £2,000Country B £15,000 £30,000Absolute Income Gap £14,000
£28,000Relative Inequality 15:1 15:1
0
200
400
600
800
1000
1200
1400
1600
1981 1984 1987 1990 1993 1996 1999 2001 2004
To
tal
po
pu
lati
on
(m
)
Sub-Saharan Africa
South Asia
Middle East and NorthAfrica
Latin America andCaribbean
Eastern Europe andCentral Asia
East Asia
Source: World Bank 2007
Note: Measured in constant 1993 US$ adjusted for PPP. Equals approx: 73p in today’s GBP
East Asia
South Asia
S-S Africa
Global Poverty Declines: Global Poverty Declines: World population living off less World population living off less
than US$1 per day by region. 1981-than US$1 per day by region. 1981-20042004