Menu
Alex E. Proimos

Reducing international income inequality

Charles Gore | 29 January 2013

The specification of a new international income inequality goal will certainly be difficult. However, if rich-country fears of “the rise of the rest” can be replaced with a common commitment to a new economic and ecological convergence, global equality of opportunity – and prosperity for all – can become a reality. 

Reducing international income inequality should be a post-2015 global development goal. This judgment is based on:

  1. The nature of global development goals
  2. The lessons of MDG implementation
  3. The major post-2015 global development challenges

The nature of global development goals. The MDGs are important because, although imperfect, they constitute the first internationally agreed global development goals of the twenty-first century. Translating into practice the “collective responsibility”, stated in the Millennium Declaration, “to uphold the principles of dignity, equality and equity at the global level”, they included three types of global goals. The first type was to achieve minimally adequate standards of living, and thus dignity, for an increasing share of the global population (expressed in such targets as reducing the share of the global population living in extreme poverty or reducing the global maternal mortality rate).  The second type was to increase the provision of selected global public goods, particularly regarding: (i) health – the reduction of infectious diseases; (ii) environment – the reduction of ecological stresses and achievement of environmental sustainability; and (iii) improved access to knowledge through ICT and balancing intellectual property rights for medicines. The third type was concerned with establishing relationships between countries which would support the achievement of these outcomes. This was expressed in MDG8, which included targets for aid (limited to special categories of country), debt relief and market access.   

We need to have global goals now more than ever, and this tripartite format can usefully be replicated in the post-2015 period when the MDGs expire. But not all desirable development objectives should become global development goals. This is because global development goals are goals which are collectively agreed by, and the collective responsibility of, all countries. National States have to make behind-the-border policy changes to implement global goals. This super-positioning of the global over the national is only justifiable for certain types of goal.

Reducing international income inequality should be included as a global goal as it is an important global public good. But a national inequality global goal makes much less sense. Certainly, there are very strong reasons to believe that countries should address national inequality as a national development objective. But reducing national inequality is a means for achieving the first type of global goal, namely minimally adequate standards of living for a rising share of the population. As such, national inequality goals should remain a matter of choice for nation-states rather than adopted as a global goal.

The lessons of MDG implementation. The post-2015 system of global goals must also take account of lessons of MDG implementation. A fundamental failure of the last 12 years is that the MDGs have been misunderstood as national goals. They have then been used to push countries to adopt a particular kind of national development strategy. Moreover, achieving the MDGs has been portrayed as the primary responsibility for developing countries rather than, as they should have been, an object of common and differentiated responsibility of the international community.

In practice, it is the aid-dependent poor countries who have undertaken the most behind-the-border changes to achieve the MDGs. The middle-income countries have established country monitoring systems but have not prioritized MDG achievement in national policy and not been pushed to do so. For developed countries, the MDGs have had no discernible effect on development partnerships beyond aid, and although they have enabled political support for increased aid flows, these remain insufficient to enable MDG achievement and are harnessed to the continued propagation of a faulty national policy model.  

Significantly, the MDGs have also reinforced an already-occurring shift away from using “development” aid to promote economic convergence and catch-up by developing countries towards using it to promote (i) the provision of global public goods, and (ii) the achievement of minimally adequate living standards. But it is difficult to see how these two global issues can be addressed on a sustainable basis without long-term financial transfers from rich countries unless there is re-balancing in which a greater share of increased aid flows goes to promote economic convergence and catch-up of developing countries, and there are complementary international economic regimes in trade, finance and technology which reinforce development partnership. The inclusion of a global goal to reduce international income inequality would promote such a shift as well as concretizing the intention within the Millennium Declaration to promote not simply dignity, but also “equality and equity at the global level”.  

The major post-2015 global development challenges. Post-2015 global development goals must connect with post-2015 global development challenges. The major global challenge of the coming twenty-five years is how, peacefully, to achieve global environmental sustainability whilst meeting the legitimate aspirations for higher living standards of billions of people in a world where, in 2005, the richest 10 per cent of the world population received 55 per cent of the world income and the poorest 60 per cent of the world population received only 10.1 per cent (Milanovic, 2012; also see my contribution to the Swiss Network for International Studies, SNIS, for a brief presentation of recent trends in global income inequality and the consequences thereof for least developed countries). Reducing international income inequality thus needs to be included in a system of post-2015 global development goals along with global goals for environmental sustainability and for achieving minimally adequate standards of living within the context of a strengthened global partnership for development.

The specification of a new international income inequality goal will certainly be difficult. It can build on existing multilateral agreements to accelerate development in the poorest countries, for example, the commitment in the Istanbul Programme of Action for LDCs towards creating a world without least developed countries. However, a holistic approach, which focuses not simply on the poorest countries but also the divergent experiences of the middle class of countries, is desirable. If rich-country fears of “the rise of the rest” can be replaced with a common commitment to a new economic and ecological convergence, global equality of opportunity – and prosperity for all – can become a reality.  

Also see Charles Gore’s article ‘Not MDGs or a New Paradigm but MDGs in a New Paradigm’.

Photo credit main picture: Alex E. Proimos

Middle Class

Dossier

Middle Class

Expert opinion

Related programmes:

About the author

Charles Gore

Charles Goreis former Head of Research on Africa and LDCs at UNCTAD and currently Honorary Profes...

full profile ▶