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
0%
10%
20%
30%
40%
50%
60%
70%
1995 2000 2005 2010 2015 2020 2025 2030
He
adco
un
t R
atio
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
World poverty trends – two scenarios to 2030
Source: Brookings 2013
Sub-Saharan Africa – two scenarios
0%
10%
20%
30%
40%
50%
60%
70%
1995 2000 2005 2010 2015 2020 2025 2030
He
adco
un
t R
atio
Estimates (WB)
Baseline Projections
Baseline Growth & Declining Inequality
Baseline Growth & Worsening Inequality
2025 (mn) Baseline: 352
Declining inequality: 295 Worsening inequality: 406
2030 (mn) Baseline: 319
Declining inequality: 219 Worsening inequality: 403
Source: Brookings 2013
Changes in share of national consumption by decile
-2
0
2
4
6
8
10
Ch
ange
in s
har
e o
f co
nsu
mp
tio
n c
on
tro
lled
by
each
dec
ile (
% p
oin
t)
Decile
Zambia (2002-06)
-2
0
2
4
6
8
10
Ch
ange
in s
har
e o
f co
nsu
mp
tio
n c
on
tro
lled
by
each
dec
ile (
% p
oin
t)
Decile
Nigeria (2003-09)
Source: Brookings 2013
Projected and actual change in poverty incidence
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
Pe
rce
nta
ge p
oin
t
Actual change (across two survey periods)
Change projected from initial distribution pattern
0.17 million
6.37 million
0.72 million
0.66 million
Ghana 1998-2005
Poverty fell but should have fallen
further
Tanzania 2000-2007
Poverty fell but should have fallen
further
Zambia 2000-2006
Poverty should have fallen but
increased
Nigeria 2003-2009
Poverty increased more than anticipated
Source: Brookings 2013
Changes in share of national consumption by decile
-2
0
2
4
6
8
10
Ch
ange
in s
har
e o
f co
nsu
mp
tio
n c
on
tro
lled
by
each
dec
ile (
% p
oin
t)
Decile
Zambia (2002-06)
-2
0
2
4
6
8
10
Ch
ange
in s
har
e o
f co
nsu
mp
tio
n c
on
tro
lled
by
each
dec
ile (
% p
oin
t)
Decile
Nigeria (2003-09)
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)
Richest 20%
Poorest 20%
Poor, rural Hausa girls
Rich, rural girls
Poor, urban boys
Poor, rural girls
Nigeria
Rural Hausa
Rich, urban boys
Urban
Rural
Urban
Rural
Rich, rural boys
C. A. R.
Chad
Bangladesh
Cameroon
Honduras
Indonesia
Bolivia
Cuba
Ukraine
14 A
vera
ge n
um
be
r o
f ye
ars
of
sch
oo
ling
(Age
gro
up
15
-17
ye
ars)
Education poverty
Extreme education poverty
3.3 years
6.4 years
3.5 years
9.7 years
0.5 years
10.3 years
2.6 years
0.3 years
Boys
Girls
6.7 years
10 years
Education disparities in Nigeria
The case of Nigeria
Source: UNESCO GMR
32.4
22.6
16.7
21.1 20.7
23.8 22.5
6.1 4.8
3.3
0
5
10
15
20
25
30
35
Cambodia(2005-2010)
Uganda(2006-2011)
Bangladesh(2007-2011)
Philippines(2003-2008)
Ghana(2003-2008)
Per
cen
tage
(%
)
Richest 20%
Poorest 20%
Source: Calculations based on DHS data
Decline in infant mortality: selected countries by wealth quintile across two DHS survey periods
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