Inequality round the world: Dumb-bell or emerging middle?

This is a guest post from Andy Sumner, Co-Director of the King’s International Development Institute at King’s College London.GLOBAL consumption grew by $10 trillion between the end of the Cold War and 2010. The $10 trillion questions are who benefited and by how much? Some of the answers may come as a surprise. A global middle class may be emerging but it might not be breaking down the old distinctions between rich and poor as much as some people think.Start with the basic facts about inequality. In a new study published by the Centre for Global Development, a think tank in Washington DC, we show that income inequality rose slightly from the late 1980s to 2005 and was relatively flat after that. This is for inequality within countries.

If you look at inequality between countries — which measures whether the poorest ones are catching up — you find this fell slightly up to 2005 and then fell more quickly afterwards.However, these trends are largely attributable to rising prosperity in China. Take out China and the picture looks rather different.

Throughout the entire period, inequality within countries in the rest of the world has been constant overall because as some countries have become less equal, others have become more so. And inequality between countries has risen, pushing up global inequality overall.However, all of this is based on a dominant measure of …

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