Inequality and the MDGs Kevin Watkins Brookings institution
Why equity should be on the agenda There are limits to acceptable disparities and we are beyond the limits (global + national) Equalizing opportunity is a fundamental human development goal Inequality is at the heart of MDG shortfalls Equity goals can focus policy and public debate on barriers to progress Social movements have put inequality on the agenda
Some of the challenges Divergence on which inequalities matter Opportunity versus consumption Group versus individual Wealth based versus outcome based Disagreement on whether equity matters Why worry about relative distribution when goals are absolute Agreeing on what we mean by equity World Bank bottom 40 versus Save the Children Measurement and metrics We know less than is usually claimed Current measurement tools not fit for purpose
The problem to be tackled Inequality is a brake on MDG progress Income disparities are slowing poverty reduction Education progress stalled because of unequal opportunity Differential decline in child death rates Interlocking disparities generate multiplier effects for disadvantage Failure to recognize that progress at the margins takes above-average effort Extreme inequality is self-perpetuating through policies and institutions
Headcount Ratio World poverty trends two scenarios to 70% 2030 60% 50% 40% 30% 20% 10% 0% Estimates (WB) Baseline Projections Baseline Growth & Declining Inequality Baseline Growth & Worsening Inequality 2025 (mn) Baseline: 499 Declining inequality: 333 Worsening inequality: 769 2030 (mn) Baseline: 385 Declining inequality: 226 Worsening inequality: 697 1995 2000 2005 2010 2015 2020 2025 2030 Source: Brookings 2013
Headcount Ratio Sub-Saharan Africa two scenarios 70% 60% 50% 40% 30% 2030 (mn) Baseline: 319 Declining inequality: 219 Worsening inequality: 403 20% 10% Estimates (WB) Baseline Projections Baseline Growth & Declining Inequality Baseline Growth & Worsening Inequality 2025 (mn) Baseline: 352 Declining inequality: 295 Worsening inequality: 406 0% 1995 2000 2005 2010 2015 2020 2025 2030 Source: Brookings 2013
Change in share of consumption controlled by each decile (% point) Change in share of consumption controlled by each decile (% point) Changes in share of national consumption by decile 10 Nigeria (2003-09) 10 Zambia (2002-06) 8 8 6 6 4 4 2 2 0 0-2 -2 Decile Decile Source: Brookings 2013
Percentage point Projected and actual change in poverty incidence 10.0% 5.0% Zambia 2000-2006 Poverty should have fallen but increased Nigeria 2003-2009 Poverty increased more than anticipated Tanzania 2000-2007 Poverty fell but should have fallen further 0.0% 0.66 million 6.37 million -5.0% -10.0% -15.0% -20.0% Source: Brookings 2013 Actual change (across two survey periods) Change projected from initial distribution pattern 0.72 million 0.17 million Ghana 1998-2005 Poverty fell but should have fallen further
Change in share of consumption controlled by each decile (% point) Change in share of consumption controlled by each decile (% point) Changes in share of national consumption by decile 10 Nigeria (2003-09) 10 Zambia (2002-06) 8 8 6 6 4 4 2 2 0 0-2 -2 Decile Decile Source: Brookings 2013
Disparities in education Progress has stalled because of failure to reach the bottom 61 million and more Interaction of wealth, gender, location and ethnicity Risk factors include Child labor Early marriage Disability Livelihood factors (e.g. pastoralism)
Average number of years of schooling (Age group 15-17 years) Education disparities in Nigeria 14 The case of Nigeria Nigeria 6.7 years Ukraine Cuba Bolivia Indonesia Honduras Cameroon Bangladesh 9.7 years Richest 20% 10 years Rural Urban Urban 6.4 years 10.3 years Rich, rural boys Rich, urban boys Rich, rural girls Poor, urban boys Boys Girls Education poverty Chad Extreme education poverty Poorest 20% 3.5 years Rural 3.3 years Poor, rural girls 2.6 years Source: UNESCO GMR C. A. R. Rural Hausa 0.5 years Poor, rural Hausa girls 0.3 years
Percentage (%) Decline in infant mortality: selected countries by wealth quintile across two DHS survey periods 35 30 32.4 Richest 20% Poorest 20% 25 23.8 22.6 22.5 21.1 20.7 20 16.7 15 10 5 6.1 4.8 3.3 0 Cambodia (2005-2010) Uganda (2006-2011) Bangladesh (2007-2011) Philippines (2003-2008) Ghana (2003-2008) Source: Calculations based on DHS data
Equity stepping stone approach Absolute targets for 2030 are a strong guide to principles but a weak guide to policy Interim equity goals as a catalyst Stepping stone approach could include: Halving by 2020 (and again by 2025) wealth-based disparities in child survival and school attendance/completion Eliminating location-related gaps in access to water/sanitation Redistributive growth Targets for share of the poor in any increment to growth (average + x) Gini and Palma targets
Concluding thoughts Winning the argument for equity Avoiding the fog of technicality Demonstrating the links to policies that are good for growth, transparency and equal opportunity Avoiding polarized debate recognizing that there are no silver bullets Developing a shared research agenda Strengthening the evidence base to show what equity targets might look like in application Identifying the missing measurement tools