There are many pathways through which policy interventions can affect inequality,. The impacts can be large or small, short term or lifelong, and they may narrow disparities in income, well-being, or opportunity. For example, taxes can have direct and deliberate redistributive effects, reaching up to 20 points of the Gini index of market incomes in some European Union EU economies. Expanding ECD, health care coverage, and good-quality education often reduces cognitive, nutritional, and health status gaps, thereby narrowing inequalities in human capital development and future income opportunities.
By smoothing consumption among the most deprived, especially during shocks, CCTs help prevent the widening of inequality. For example, in , a Jamaican intervention sought to support toddlers ages 9—24 months who suffered from stunting. It also provided nutrition supplements and psychosocial stimulation. Researchers followed up among the participants 20 years after the intervention and found that the groups of children receiving stimulation with or without the nutrition supplements had, as adults, 25 percent higher earnings than the control group.
The greater earnings had allowed individuals in the stimulation program to enjoy livelihoods at a similar level as the members of a nonstunted comparison group, effectively eliminating the inequality in incomes between the groups. Within a year of its launch, the scheme was covering 75 per-.
Behind the global aggregates lie large regional differences and large differences within each region. And I think organizations--the organization of the Republican Party, you know--the Republican Party, and the Democrats, also, to a great extent--have become much better at controlling dissent within themselves. Daron Acemoglu: Well, you know, I think those interventions are exactly the essence of the democratic process. But race-blind interventions might not. Sacramento Democrats jammed through the aforementioned solar requirement for new housing shortly before Election Day to boot.
For example, estimates in the United States indicate that pupils taught by teachers who are at the 90th percentile in effectiveness are able to learn 1. Per capita annual spending across households in the program areas has risen by about 10 percent. Such evidence demonstrates that interventions can be designed successfully in a variety of settings. Yet, the long road ahead argues against any complacency and against the fallacy of sweeping prescriptions.
The challenges and uncertainties are diverse and complicated, as follows: Despite progress, intolerable disparities in well-being still exist that concrete policy interventions could confront directly. In many lowand middle-income countries, preschool enrollment rates among the poorest quintile are less than a third of the rates among the richest quintile.
Mothers in the bottom 40 across developing countries are 50 percent less likely to receive antenatal care. The poorest children are four times less likely than the richest children to be enrolled in primary education and systematically record lower test scores than children in the richest households. Among the estimated million illiterate adults worldwide, nearly twothirds are women. Only one-quarter of the poorest quintile are covered by safety nets, and the share is even smaller in Sub-Saharan Africa and South Asia.
Connecting poor farmers to urban markets can positively affect the income of farm households as well as reduce their income gaps with the rest of the population. Different choices in Chile and Mexico in recent tax reforms with the same objectives led to different impacts. The ultrarich bore the brunt of the income tax component of the reform in Chile, while in Mexico, the middle class also largely shared the cost of the reform.
In many contexts, incentivizing higher quality in teaching, while making social transfers conditional on school completion may have a greater impact than constructing new schools. Avoid unexamined reliance on universal prescriptions and unique models of success. Evidence strongly suggests that the implementation of such prescriptions and models does not automatically ensure a reduction in inequality. Nonetheless, some initiatives are more likely than others to generate inequality reductions and improvements in the well-being of the poorest. For example, integrated interventions are more likely to succeed than isolated, monolithic interventions.
Equalizing interventions are not a luxury reserved for middle- and high-income countries, nor an option only available during periods of prosperity. There are numerous instances of the implementation of successful interventions in ECD, universal health care coverage, CCTs, investment in rural infrastructure, and redistributive tax schemes across low-income countries. This evidence should dispel the notion that only middle- and high-income countries can afford equalizing policies.
These obstacles are not insurmountable, however.
This is also the case during periods of crisis. Examples of CCTs integrated in safety nets that effectively protect the most vulnerable against natural disasters demonstrate that a crisis is not an excuse for inaction, but an incentive for the adoption of equalizing interventions. Thus, the more well off households among the targeted population, that is, households with children with higher baseline levels of development and more well educated mothers, are typically more likely to send their children to preschool or to take part in parenting programs.
More knowledge! Yet, the road ahead is still long and steep. Substantial efforts are required to address the poor quality, comparability, and availability of data, especially in lowincome countries. This report makes a strong case for expanding the availability of and access to data on inequality, poverty, and shared prosperity.
High-income countries such as the original members of the Organisation for Economic Co-operation and Development OECD , where extreme poverty is assumed to be zero, are not considered in this sample. Notes 1.
WHO For a formal decomposition, see Datt and Ravallion , among others. In the general case, a reduction in inequality at a given growth rate leads to a reduction in poverty according to most poverty measures. Exceptions are, for instance, progressive distributional changes whereby some nonpoor fall under the poverty line over time, thus increasing the headcount ratio.
Even in that case, other poverty measures with higher social welfare weights for lower percentiles tend to decrease. See Oxfam Lakner estimates that the 10 wealthiest Africans own as much as the poorest half of the continent. Beegle et al. World Bank a.
As a result, smallholders are generally vulnerable to swings in the international prices for rice. See World Bank , a. World Bank b. Barros et al. ADB World Bank , Josz Genoni and Salazar World Bank c. Gertler et al. Araujo et al.
Fafchamps and Quisumbing ; Jolliffe ; Yang Behrman and Hoddinott ; Gertler Akresh, de Walque, and Kazianga Fiszbein and Schady Aggarwal ; Asher and Novosad Khandker, Barnes, and Samad La Ferrara, Chong, and Duryea See the evidence presented in chapter 6. Abramovsky et al. Hallegate et al. Aggarwal, Shilpa. Evidence from India. Asher, Sam, and Paul Novosad. Poverty in a Rising Africa. Behrman, Jere R.
The Globalization of Inequality. Translated by Thomas ScottRailton. Cornia, Giovanni Andrea. Datt, Gaurav, and Martin Ravallion. Fafchamps, Marcel, and Agnes R. Evidence from a Pilot Project. Fiszbein, Ariel, and Norbert Schady. Gertler, Paul J. Chang, and Sally Grantham-McGregor. Grantham-McGregor, Sally M.
Powell, Susan P. Walker, and John H. Climate Change and Development Series. Jolliffe, Dean. Josz, Christian. Khandker, Shahidur R. Barnes, and Hussain A.
Lakner, Christoph. Evans, and Data for Goals Group. Osorio, Rafael Guerreiro, and Pedro H. Ferreira de Souza. World Health Statistics. Geneva: WHO. World Bank. Cambodia Poverty Assessment Yang, Dennis. Concepts, measurement, and data The World Bank goals On April 20, , the Board of Executive Directors of the World Bank adopted two ambitious goals: end extreme poverty globally and promote shared prosperity in every country in a sustainable way.
The World Bank set a target of reducing the poverty headcount ratio from Despite not providing a single global target, the shared prosperity goal is universal because it includes developed countries that do not contribute to the global poverty count, but are still monitored in terms of shared prosperity. Progress on the shared prosperity goal is measured by the growth in the average income or consumption expenditure of the poorest 40 percent of the population distribution the bottom 40 within each country.
The key information for ensuring this comparability is data to gauge purchasing power parities PPPs. The data are collected through the International Comparison Program, an independent worldwide statistical partnership that gathers data on prices and expenditures within economies.