poverty & inequality -...

POVERTY &INEQUALITY Persistent Challenges and New Solutions

Globalization TrendLab 2013


Poverty & Inequality Persistent Challenges and New Solutions

Based on a conference organized by the Joseph H. Lauder Institute of Management & International Studies and the Penn Lauder Center for

International Business Education and Research at the University of Pennsylvania, sponsored by Santander Universities, and distributed worldwide through

the Knowledge@Wharton network.

© 2013 The Trustees of the University of Pennsylvania. All rights reserved.

1 | Globalization TrendLab 2013

Poverty and inequality around the world have evolved in disparate ways over the last two decades. The number of people living below the poverty line has been cut in half, primarily due to robustgrowth in the emerging economies. Meanwhile, poverty is on the rise in both Europe and the United

States, especially among children. While inequality across countries is on the decline, inequality withincountries has grown in both the developed and the developing world, with the notable exception of LatinAmerica. In developed countries, deindustrialization, lower levels of unionization, declining wage shares of national income and the financialization of the economy are largely responsible for the increase ininequality. In developing and emerging economies, unbalanced growth between the cities and thecountryside, and within urban and rural areas, is mainly behind the trend. As a result, a rising global middleclass of consumers, centered in China and India, is developing, although in most countries the uppermostsegment of the income distribution is also growing relative to the rest.

Patterns of poverty and inequality have complex origins in culture and the social structure, and are alsodriven by shifting dynamics in the labor market, the healthcare sector and the financial system. Politicalshifts, especially regarding the role of the government in the economy and the welfare state, havefundamentally redrawn the global map of poverty and inequality, and hold the key to the solution of someof the most worrying trends, especially those having to do with children, disconnected youth (those out ofwork and not in school), and future inter-generational conflicts over scarce resources. Solutions to theproblem of poverty and inequality range from those focused on a wholesale transformation of the socialstructure to those advocating opportunity-driven, cost-effective interventions, especially at the crucial pointsin time when people make life transitions across educational levels, from school to work, or from job to job.We also discuss the virtues of an approach based on development goals compared to one based on standards,and the promise of entrepreneurship as a path out of poverty. We make a series of specific recommendationsaimed at ensuring that poverty and inequality enter a new phase of decline around the world.

Executive Summary

Poverty & Inequality: Persistent Challenges and New Solutions | 2

The Shifting Global Map of Poverty and Inequality

During the last two decades, the globalpicture of poverty and inequality haschanged considerably, often in paradoxical

ways. Poverty, defined as the number of peoplebelow a certain level of income needed to coverbasic necessities, is on the decline for the world as awhole due to rapid economic growth in China,India and Brazil because of their size compared tothe world’s population and their economic growth.Drawing the poverty line at $1.25 a day (expressedin 2005 purchasing power parities), there were 1.9billion poor people in the developing world in1990, a number that came down to 1.3 billion by2008. Thus, the proportion of people living inextreme poverty dropped from 52 percent in 1981to 40 percent in 1990 and 22 percent in 2008. InEast Asia, the proportion plummeted from 77percent in 1981 to 14 percent in 2008.

“We are witnessing the first decline in globalinequality since the 1820s,” notes the World Bank’sBranko Milanovic, one of the most influentialexperts on global poverty and inequality. “It’s amassive rebalancing between East and West, andbetween South and North driven by the growth ofthe emerging economies.” While “the number ofpoor people has been cut in half over the past 20years,” he adds, “there is still enormous inequalityas well as poverty in the world.” Most people inextreme poverty nowadays live in South Asia (570 million) and Sub-Saharan Africa(396 million). East Asia is home to 284 million and Latin America to less than 50 million.

Thus, it seems as if David Dollar and Aaart Kraaywere right when they published their famous 2002article, “Growth Is Good for the Poor.” Reducingthe argument to just one variable, however, ismisleading. In addition to economic growth,gender is an important variable accounting for the

reduction in poverty rates in the developing world.Since the 1970s, gender has become part of theoverall theoretical, empirical and policy debateabout poverty and inequality, thanks to the workof Ester Boserup at the United Nations. In someparts of the world, important, though hardlyuniversal, improvements in women’s education,health, legal rights, equality of roles andsocioeconomic status have led to a reduction inpoverty and inequality. In the Middle East andSub-Saharan Africa, however, progress continues to be rather slow.

While the developing and emerging world haswitnessed a reduction of poverty rates, Europe and the United States have experienced just theopposite, taking into account, of course, that thepoverty lines used in rich countries are about tentimes as high as the poverty lines used in poorcountries or the World Bank’s absolute povertyline. In November 2012, the U.S. Census Bureauestimated that 16 percent of the population, andalmost 20 percent of children, live in poverty, thehighest levels since the early 1960s. Povertythresholds are defined with regard for differentsizes and composition of households. For instance,in the U.S., for a family of four, including twochildren, the threshold is $23,283 in annualincome. The European Commission estimates that16 percent of its population, and 19 percent ofchildren, are in or at risk of poverty, and that 17percent of Europeans suffer from materialdeprivation, i.e. “their living conditions are severely affected by a lack of resources.”

The impact of these trends on children has reachedalarming proportions, which do not bode well forthe future. According to Carolyn Miles, CEO ofSave the Children, “about 23 percent of kids in theU.S. are living below the poverty line.” And the bad


news is that the problem in the U.S. is likely to getworse given current budgetary pressures. Povertyhits people all over the world. “Poor kids don’tvote, and have very little political power, if any,” sheadds. “Poor kids are 18 months behind wealthierpeers on average by age four in terms of readingskills,” Miles notes. In more ways than one,“poverty and inequality manifest themselves in virulent ways among children,” observes Emily Hannum, Professor of Sociology at Penn.

The retrenchment of the welfare state on both sidesof the Atlantic has much to do with the recent risein poverty rates, in the same way that “theexpansion of the social safety net has historicallycontributed to poverty reduction,” argues EvelyneHuber, Professor of Political Science at theUniversity of North Carolina, Chapel Hill.However, there are deeper and older roots. “Themigration of manufacturing jobs to other parts of the world has generated a decline in the share of income accounted for by labor,” argues PaulOsterman, a Professor at the MIT Sloan School of Management. “Meanwhile, jobs created in the service sector have proved to be much moreheterogeneous in terms of skill level, stability andpay than those in manufacturing.” Huber pointsout that in Latin America growth in manufacturingjobs has historically led to lower inequality.

The rise of informal employment in developedcountries is another important background factor, argues Saskia Sassen, Professor of Sociology atColumbia University, who is also concerned about“the financialization of the economy and thebreakdown of the mass production/distribution/consumption economy in Europe and the United

States that provided much stability to the socialstructure in the post World War II era.”

While poverty implies a certain absolute degree ofdestitution and lack of access to resources, incomeinequality is a relative concept. Rapid growth in the emerging economies has led to convergence inincome levels across countries, thus reducinginequality. This process started in the 1990s, fueledby China’s rise as a manufacturing and exportingpower. Excluding China, income inequality acrosscountries started to drop globally at the turn of the21st century, while it had increased more or lesssteadily since the end of World War II.

While poverty in developing countries and incomeinequality across countries have declined, incomeinequality within countries has risen in many partsof the world. The distribution of income in China,India, the Philippines, Egypt, Kenya, Germany,Poland and the United States, to name but a fewcountries, has widened (or become more unequal)over the last two decades. It has also increased inSweden, albeit from a very low level of inequality.By contrast, in Brazil, Mexico and Turkey,inequality is lower than ten years ago. The causesfor these changes are complex. As in the case ofpoverty, the retrenchment of the welfare state andbudgetary crises in several rich economies partiallyaccount for the increase in inequality and inpoverty. At the same time, countries like Brazilhave launched large programs of incomeredistribution aimed at improving health andeducational standards among the poor. Its BolsaFamilia program, for instance, covers 25 percent of the population.

“We are witnessing the first decline in global inequality since

the 1820s.”– Branko Milanovic


Perhaps the most significant factor behind therecent spike in inequality globally has to do withtechnological change, according to a recent IMFstudy. New technology tends to favor skilledworkers over unskilled ones. Financialglobalization was also found to contribute toinequality, though not as strongly. Still, thefinancialization of the economy has proveddestructive in advanced economies, and also insome developing and commodity-exportingcountries. Trade, by contrast, seems to havereduced inequality within countries, although it ishard to tell whether the positive effect comes fromtrade per se or from the economic growth that ithas generated in emerging economies. In general,“integration into the global economy has helpedreduce poverty around the developing world, andit has also cut income disparities across countries,”observes Jack Goldstone, Professor of Public Policyat George Mason University.

Much of the global increase in income inequalityhas taken place in China and India, whichcombined, account for nearly one third of theworld’s population. In these countries, rural-urbandynamics are important determinants of the newemerging patterns of inequality. “Urbanization hasadded complexity to the global picture of incomeinequality,” observes Sassen. Rural-urban migrationhas not only been a process driven by opportunity,but also by the displacement of people due tolarge-scale land acquisitions for industrial crops,food crops, mining and access to water.

In China, the Gini index of income inequality inrural areas rose from 0.21 in 1978 to 0.37 in 2006,and in urban areas from 0.16 to 0.34. Inequalitybetween urban and rural areas has expanded from0.18 in 1978 to 0.28 in 2006. In India inequality inrural areas has remained relatively constant, whilein urban areas it has increased, though not nearlyas fast as in China. As Sassen observes, “urbanpeople, especially the elites, have become muchmore connected to similar people in othercountries than to their compatriots in rural areas,”

a trend that is likely to further exacerbate thedisparities. As Devesh Kapur, Professor of PoliticalScience at the University of Pennsylvania, suggests,“there’s no denying that the growth of cities is amajor source of economic, social and politicalrebalancing around the world.”

The exception to the general pattern of increasingincome inequality and rural-urban disparities isLatin America, one of the most urbanized parts ofthe world. Income inequality has been consistentlyreduced over the last decade and a half, especiallyin the two largest economies, Brazil and Mexico.Still, levels of inequality throughout Latin Americaremain the highest in the world, with Ginicoefficients above 0.50 in several countries,including Brazil, compared to China’s 0.46, India’s0.37 and Egypt’s 0.32.

If income inequality poses grave challenges, therecent evolution of the distribution of wealthshows an even gloomier picture. While in the year2000 the top 10 percent of households in the worldaccounted for 67 percent of the income, theyowned 85 percent of the wealth. Both income andwealth inequality tend to reduce the incentives foreconomic growth, and they are a key backgroundfactor behind financial crises, including the onethat started in 2008. They also contribute to agrowing rural-urban divide, and to gender, ethnic,and other types of social disparities. According toGail Fosler, president of The GailFosler Group LLCand formerly president of The Conference Board,“people in the higher income groups allocate more of their income to savings, and thatcontributes to wealth inequality and disparities in capital formation,” which, in her view, pose even more formidable challenges than incomeinequality per se.

The rise in income and wealth inequality in manydeveloping, emerging and developed countriesposes a series of challenges. If economic growth isone of the main ways of reducing poverty, onemust be concerned with the possibility that growth


will stall in the wake of rising inequality. As WilliamEasterly has argued, high inequality can bedetrimental to growth because it undermines thequality of institutions and discourages schooling, orto use Amartya Sen’s framework, it undermines theformation and expansion of individual capabilities. In sum, poverty and income inequality are close

cousins but not identical twins. Patterns across andwithin countries have diverged in recent decades.Moreover, the social and psychological cost ofpoverty, especially among children, is much greaterthan those associated with income inequality,although too much disparity is morally wrong andcan undermine incentives in a market economy. n


Economists and sociologists have longcontended that the labor market and theoccupational system constitute the backbone

of social stratification and income distribution. Forinstance, Osterman argues that “there are manyways of looking at the issues of poverty andinequality, and that the state of the labor market isone useful way of thinking about them. “Theproportion of working people in poverty-level jobsis about 20 percent to 25 percent in such a richcountry as the U.S.,” he notes. “Therefore, fullemployment is only part of the solution aswitnessed by the fact that during the 1990s, a verystrong labor market -- just under 20 percent ofadults -- was in low-wage poverty level jobs.Improving education is necessary but not sufficienteither.” The key, in his view, is “to improve thequality of jobs, to help companies upgrade theskills of the workers they employ.”

International experiences when it comes to thecreation of “good jobs” show that it is not onlypossible to remain competitive in the globaleconomy with high wages but that nurturingworkers’ skills and paying them well is one way ofbeing competitive. “The transformation of theGerman economy over the last decade and the riseof South Korea as a global producer of high-endgoods are frequently mentioned as examples toemulate,” notes Mauro Guillén, director of theLauder Institute.

Osterman also calls attention to other variablesthat may mediate the relationship between thequality of jobs and inequality. “Slowing populationgrowth and the retirement of the baby boomgeneration is going to create a labor shortage.”This, he suggests, “will encourage employers to uselabor more creatively.” In addition, he observes,“population aging will promote job growth insectors like healthcare, which tends to employpeople with middle to high skill levels.”

The overall trend concerning labor markets andtheir impact on inequality, however, is not evolvingin a desirable direction. The wage share of GDPhas declined in the developed world over the lastseveral decades. In the United States, Germany andJapan, it has declined since the 1970s, except fortwo brief periods in the early 1980s and the late1990s. William Spriggs, chief economist at theAFL-CIO and a Professor at Howard University,observes that “total employee compensation hasgrown less than productivity” for several decades.In addition to wage stagnation, he argues, “paydiscrimination by gender and ethnicity hascontributed to rising inequality.” Thus, he echoesOsterman in saying that “human capital formation

Jobs, the Quality of Jobs, and Inequality

Mauro Guillén

“We have a better-educated

female workforce, for instance,

but women continue to

be paid less than men.”– Jerry Jacobs


is part of the solution, but it is not the entiresolution… We have a better-educated femaleworkforce, for instance, but women continue to be paid less than men.” Jerry Jacobs, Professor ofSociology at Penn, argues that “it’s important tounderstand the structure of inequality,” adding thatinequality patterns will shift depending on “trends

about women and minorities joining the workforce,and the kinds of occupations they gravitate towards.”He raised the question of how structural shifts ininequality will interact with a labor force in the U.S.that is projected to be increasingly diverse withrespect to gender, race, and ethnicity. n


The Middle Class in Production andConsumption

Wage stagnation in the developed worldaccompanied by the expansion ofmanufacturing employment in

developing and emerging economies is bringingabout a tectonic change in the global classstructure and in the consumer markets of thefuture. After all, the population of Europe, theUnited States and Japan enjoyed rising standardsof living precisely as a result of the shift fromagricultural to industrial employment. Stable andwell-paying manufacturing jobs created a middleclass, one that served as the foundation for theworld’s first mass consumption markets. It is nosecret that the rise of the middle class was a keycharacteristic of the growth of the marketeconomies during much of the 20th century, andthat this phenomenon contributed to political aswell as economic stability.

The map of the middle class is shifting preciselydue to changing patterns of economic growth,demography and inequality around the world.According to a recent OECD study, the number ofmiddle-class people in the world will surpass thenumber of poor people for the first time in theyear 2022. In most statistical analyses, the middleclass is defined as people with more than $10 butless than $100 dollars per day to spend. Whereasnowadays more than half of middle-class peoplelive in the European Union and the United States,by 2050 most of them will live in India and China.India is projected to be home to the largest middleclass in the world thanks to rapid demographicgrowth and lower income inequality than in China.

The recent expansion of the middle class in China,India and Brazil has created a new consumermarket which will in due course make thesecountries less dependent on exports for their

economic growth. By 2030 emerging economieswill account for 70 percent of global spending bythe middle class, and the size of the middle-classconsumer market in emerging economies isexpected to exceed 30 trillion dollars annually. Inparallel, the number of rich people is also growingfast in emerging economies, creating a vibrantmarket for luxury goods.

Meanwhile, increasing income inequality andpoverty rates in Europe and the United States aresqueezing the middle class. “Capital’s share ofincome has grown at the expense of labor’s,” saysGoldstone, “and this means that the middle class inthe rich countries has suffered.” We are witnessing“the hollowing out of the middle class,” addsMilanovic, which has been both the foundationand the main beneficiary of economic growth andprosperity. In addition, the middle class will beaffected by yet another growing manifestation ofinequality, one that promises to create muchfriction between generations. “Population agingwill drain resources from the working middle class,

Jack Goldstone


which pays a majority of the taxes in both Europeand the United States.” This will likely reducemiddle-class demand for durable goods andhousing, thus constraining economic growth, giventhat around 70 percent of GDP is accounted for byconsumption.

Milanovic is no fan of the term “global middleclass,” which he finds exceedingly vague, because itoften includes people in emerging economies whomay be “middle class” by local standards but whowould be considered rather poor by Westernstandards. The term “middle class” conveys afeeling of relative financial ease and at least little orno vulnerability to falling into poverty. Thishowever is often not the case with people includedunder such an “umbrella” definition of “global

middle class.” Besides, “the experience of beingmiddle class is very different around the world,”states Michèle Lamont, Professor of Sociology atHarvard, as it is filtered through culture and othersystems. Still, there is no denying that thecombination of wage stagnation in developedcountries and rising incomes in emergingeconomies, compounded by the very large size oftheir populations, will dramatically alter the globaldistribution of consumption and its impact oneconomic growth. “The middle class of the 20thcentury was a tissue that connected the poor to apossibility of upward mobility,” notes Sassen, “andin this sense strengthened the support for liberaldemocracies. The thinning of that middle class ismuch more than just that thinning; it has majorimplications for having a working democracy.” n

“The middle class of the 20th century was a tissue that connected

the poor to a possibility of upward mobility and in this sense

strengthened the support for liberal democracies. The thinning of

that middle class is much more than just that thinning; it has major

implications for having a working democracy.”– Saskia Sassen


Poverty and inequality often have ill effects on health and personal wellbeing, with thepotential of creating a vicious cycle in which

income disparities lead to deteriorating health, andthis in turn perpetuates inequality. Health has beenon the development agenda at least since the 1980s.Economists, sociologists and other social scientistshave documented that people’s labor forceparticipation and productivity depends on theirhealth status. However, as Goldstone notes, healthmay help development, but it is equally true thatdevelopment helps health, especially when it comesto controlling endemic diseases. Still, “both richand poor countries have to wrestle with majorinequalities in health,” notes Scott Burris, aProfessor of Law at Temple University.

Terry McGovern, Professor of Population andFamily Health at Columbia University, says thatproblems of inequality in the healthcare sector arerampant, “from infrastructure issues to servicequality, and from shortages and access to highcosts.” In its current state, healthcare is a majorgenerator of inequality. There is a “medical-poverty trap,” she argues, a self-perpetuating cyclethat begins with poor health among the poor, andleads to fewer and worse labor marketopportunities and reduced income. “Education,income, living conditions, housing, and sanitationall affect health, and health in turn affects them,”McGovern states. And there are other health-related issues that frequently get lost in debatesabout healthcare reform. “In several Africancountries, gender-based violence causes moredeaths than cancer, malaria and road accidentscombined.”

The organization of healthcare is crucial to gainingan understanding of patterns of inequality. “Thehealthcare system does not exist in a vacuum,”

suggests Nitsan Chorev, Associate Professor ofSociology at Brown University. “One must alsoexamine how it interacts with other parts of theeconomy.” In her research in various countriesaround the world, she has shown that importingpharmaceuticals into developing countries, forinstance, could benefit local manufacturing so to create more wealth as well as help addresshealth problems. It is important, though, to set upthe right conditions in terms of incentives. “Oneway of reducing inequality is to use foreign aid topromote self-reliance,” she says.

There is nothing more central to the individualthan his or her health status. In contemporarysocieties, health has become not only important inthis sense, but actually has come to occupy acentral position in a wide range of crucial debates,from the link between population pressures andglobal warming, to the fiscal sustainability of thewelfare state and the impact of healthcare spendingon economic growth and competitiveness.Inequality and poverty are two additional areasdeeply affected by health and healthcare dynamics. n

Health and Personal Wellbeing

Terry McGovern


Financial Inclusion, Poverty and Inequality

AAnother part of the economy thattends to generate and shape patternsof inequality is the financial sector. At

the present time, some 5 billion people, or 70percent of the world’s total, are excludedfrom the formal financial system. Accordingto the World Bank, the global map offinancial exclusion closely mirrors the globalgeography of poverty, with Sub-SaharanAfrica, the Middle East and South Asia as thehardest-hit regions. Spanish-speaking LatinAmerica is also considerably under-banked,with about half of the population operatingoutside the formal banking system. Brazil,which is home to large state-owned andprivate domestically-owned banks, faresmuch better than the rest of its region. There arealso millions of unbanked adults in developedcountries, including 20 million in the U.S.

Small businesses, which tend to be importantsources of household income in developingcountries, often operate without formal bankingrelationships. In a recent report, McKinsey & Co.estimates that up to 250 million micro-, small- andmedium-sized enterprises in Africa, Asia and LatinAmerica are either un-served or under-served byformal financial institutions, a gap worth some 350 billion dollars annually. Research onentrepreneurship has shown that small businesseslacking access to formal credit channels, forexample, tend to experience lower growth andsurvival rates.

The idea of financial inclusion is relatively recent.It involves the argument that if people do notparticipate, or are not in a position to participate,in the formal financial system, they may be lockedout of opportunities, and their income andsocioeconomic wellbeing might be compromised.A large number of nonprofit organizations havejoined the World Bank and the International

Monetary Fund in their efforts to promote thedevelopment of innovative approaches to financialdevelopment that fit the needs of low-income andpoor people. Among the various components ofmicrofinance being promoted around the world,microcredit gained the earliest prominence, butmore recently, careful empirical studies havequestioned microcredit’s potential to delivermiraculous results. Insurance, pension plans,deposit accounts and money transfer services are all areas in which microfinance has thrived in recent times.

There is considerable debate, however, as towhether financial exclusion is a major contributorto inequality, or if inequality generated by othersources leads to financial exclusion becausetraditional banks and financial institutions do notfind poor customers profitable. Financial inclusionalso has the potential to increase inequality, ifmicrocredit borrowers have imperfect self-controland foresight, and if their interest paymentsincrease returns to wealthier savers and investors. The evidence suggests that, in addition to lowerincomes, people without a bank account havemore unstable incomes. “To say that someonesurvives on two dollars a day is inaccurate,” says

Alpesh Chokshi, Nancy Hite, and David Roodman


David Roodman, senior fellow at the Center forGlobal Development. “Most poor people indeveloping countries make three dollars one day, a couple the next and none at all for the rest of the week.”

Microfinance started “as a frustration,” accordingto Roodman. People and policymakers becameincreasingly exasperated about the slow rate ofprogress in making formal financial servicesavailable to a wide segment of the population indeveloping countries. In his view, there is a beliefthat “microfinance can solve a wide range ofproblems. There are many claims andcounterclaims about microfinance.” Oneimportant question is what qualifies as success.“When people say microfinance works, sometimesthey mean lifting people out of poverty; othertimes they have freedom in mind, or yet othertimes a Schumpeterian transformation that may be conducive to development,” says Roodman.Research is not definitive on this issue, and thisshould be no surprise. “Credit amplifies risks.Some people do well when they get credit, whileothers don’t.”

Roodman agrees with Nancy Hite, a Professor at the Fletcher School of Tufts University, in thatfinancial inclusion and microfinance may helpovercome such an important problem as incomevolatility. “Financial inclusion helps stabilizeincomes,” she says. But the benefits of microfinanceshould not be exaggerated. “My concern is whethertoo much money is going into microfinance,” notes Roodman. “The key challenge is to buildinstitutions so that new credit does not createbubbles and is put to work in an economically and socially desirable way.”

One of the paradoxes in the recent growth ofmicrofinance has been that it has proved to bemost scalable when large companies are involvedin its organization and delivery. A case oftenpresented as a success story is that of m-Pesa in Kenya. Launched in 2007 by Safaricom, asubsidiary of Vodafone, this mobile payments

service is presently used by virtually every adult inthe country, while traditional banking services areonly available to 16 percent of them. M-Pesapresently accounts for 70 percent of all financialtransactions in Kenya. Critics charge, however, that this remarkable experiment is in no way aboutmicrofinance, but about a big company makingoutsized profits and facing little competition.

The proliferation of mobile payments and banking platforms has changed the landscape of microfinance in the developing and emergingworld, areas in which the traditional banking and telecommunications infrastructures neverdeveloped. Alpesh Chokshi, president of the Global Payment Options group at AmericanExpress, believes that a quiet revolution is takingplace. Mobile phones have spread much faster than any other type of device, and it is the mostcommon way of going online in developing andemerging countries, where there are 80 mobilephone subscriptions per 100 people. Microfinanceservices offered through mobile phones canrevolutionize the world of banking. “Banks areslow, traditional and charge high fees,” Chokshisays. “With mobile phones, we can do somethingabout each of these problems, and we can improveaccess and reduce cost.” He believes that for-profitcompanies can do good while doing well if theyembrace this revolution. “Companies like ours canleverage digital platforms and mobile phones as aconsumer access device to dramatically scale up the number of customers we can serve.”

“The key challenge is to build

institutions so that new credit

does not create bubbles and is

put to work in an economically

and socially desirable way.”– David Roodman


The potential benefits of financial inclusion are notlimited to the economic sphere. Hite argues that“financial inclusion can bring about beneficialsocial and political outcomes as well.” She hasundertaken field experiments in a wide variety ofdeveloping countries in Asia and Latin America,showing that “people who are financially includedmay become more socially empowered andpolitically engaged.” Microfinance gives people thefreedom to opt out of clientelistic local politics. Inother words, financial inclusion has the potentialof increasing social capital and improving thequality of civic life under the right conditions.Given the deficits in terms of governance and thequality of democratic life in many countriesaround the world, Hite’s research offers somepromising prospects. She cautions, though, againstthe possibility that microfinance may “increase the velocity of transactions in the community as

opposed to enabling economic activity.” In herwork, she explores conditions under which bothinformal and formal types of microfinance maybecome usury and/or politically coercive. Shebelieves that new schemes for financial inclusionoften need to be supported and constrained byregulation so as to avoid such negative effects.Chokshi agrees, suggesting that “transparency and a level-playing field” are essential.

While financial inclusion through microfinanceprograms has great potential, Hite and Roodmanwarn against “thinking about financial access aspanacea.” Microfinance enables access and canreduce transaction costs, but wholesale reductionsin poverty and inequality will require much morethan access to financial services, as JeremyTobacman, a Professor at the Wharton School,reminded us. n


Politics, State Capacity and Inequality

The role of the state in compensatingfor the inequalities and shocksbrought about by the free unfolding

of market forces is well established, and itmanifests itself not only through financialregulation and healthcare spending, butmore broadly through an array of policyinterventions and programs. Much of thedebate centers around the appropriatelevel of intervention and the best tools to accomplish it, although opposition to all kinds of state-led efforts to redresspoverty and inequality has grown steadilyin both Europe and the United States.Still, Kapur is categorical: “The state is acentral actor in the fight against povertyand inequality.”

Huber, who has undertaken extensive research onthis issue, argues that the political dynamicssurrounding state programs to reduce poverty andinequality are different in developed anddeveloping countries. She notes that “within theOECD, pre-tax income inequality amonghouseholds headed by an employed adult is lowerin countries with higher levels of union density,and longer during periods in which the Left runsthe government. [In addition], it has risen in thewake of declines in manufacturing employment.” Agrowing number of households headed by a singlefemale with dependents has also contributed togrowing inequality. In turn, generous transferpayments to single mother households and to theunemployed counteract these trends; overalltransfer generosity is the single strongest predictorof reduction in inequality from pre-tax andtransfer to final disposable income inequality. InLatin America, by contrast, the main driving forcehas been the consolidation of democracy. She hasfound that “democracy reduces inequality becauseit opens up a chance for parties to play a role,which frequently leads to redistributive policiesand higher spending on health and education.”

She warns, however, that “it takes a long time,perhaps two decades or more, for the effect ofdemocracy to take place. The minimum wage has also been found to reduce inequality in Latin America.

Guillén wonders, though, whether the effect of left-right politics and democratization has beentempered by shifts in the relative power of thevarious ministries within the state apparatus.“With globalization, the executive branch ofgovernment has become increasingly aligned with global corporate and financial interests,” notes Sassen, “and become less accountable to the people; in contrast, the legislature, the branchwhere we the citizens have a strong standing, haslost power and has lost its compass, which does nothelp us democratize our economies.” The executivebranch of government has also seen changes. AsSusan Strange once argued, in most countriesaround the world, the labor, health and educationministries have lost power at the expense of thefinance ministry and the central bank. Ostermanagrees in that “under Presidents Kennedy andJohnson, the labor secretary was influential inpolicymaking.” Much has changed, however, overthe last half century. “President Obama’s last

Carolyn Miles and Sanjay Reddy


appointment in his first term was the secretary oflabor, and his next to last in this term is also thelabor secretary. This parallels the shift of powerwithin companies, away from production and salesand towards finance,” he notes. Spriggs, who servedas Assistant Secretary for the Office of Policy at theUnited States Department of Labor in the ObamaAdministration, suggests that the power shiftwithin the state has changed public discourse andwhat issues are on the agenda. “Today theminimum wage is a highly partisan part of theagenda, whereas under Eisenhower, the only debatewas about the size of the increase. Now the debatenarrative around the minimum wage is all aboutprofit maximization, not supporting consumerdemand. The dominant narrative is not pro-labor.”He further argues that “there is a globalphenomenon of labor-management dysfunction,which is making matters worse,” with governmentsno longer acting as effective referees. Huber notes,however, that the power shift has been morepronounced in countries in which commitment to social policies was weaker to begin with.

Besides politics and power, the effectiveness of thestate when it comes to dealing with poverty andinequality depends on its capacity to act. “Do weneed a conference to figure out that state stabilityand capacity are essential to reduce poverty andinequality?” asks Phil Thompson, a Professor at the Massachusetts Institute of Technology. “Thinkabout Haiti, where without the 30,000 UN troops,the country would go through a meltdown.”Michael Woolcock, lead social development

specialist at the World Bank, argues that “thefunctionality of government and its ability toimplement are very important,” especially when itcomes to health, education and social protection.Chorev concurs: “State capacity is central to thesuccess of health initiatives and programs.”

“Ensuring that the everyday institutions ofgovernment work for the people makes a bigdifference,” notes Woolcock. “In many countries,50 percent of teachers do not show up for work on any given day, and even when teachers arephysically present, too many are not actuallyteaching students. There is a broad spectrum ofstate capacity around the world. Increasing thecapability to engage the issues is very important.”Huber concurs with this assessment and observesan interesting pattern in Latin America. A keyproblem facing progressive governments in thisregion is teacher unions, which tend to resist newprograms and initiatives. Kapur points out that in India, this type of negative effect is moreimportant in public schools with politiciansunwilling to discipline unionized teachers whowere part of their vote banks, preferring to sacrificethe interests of children. Osterman further arguesthat “it is not only about making teachers show up,but what and how they contribute to children’slearning.”

Sanjay Reddy, who is on the economics faculty atthe New School University, suggests that povertyand inequality are related to the social and politicalstability of countries, which in turn are dependent

“Ensuring that the everyday institutions of government work for the

people makes a big difference.”– Michael Woolcock


on state structures. “It would be logical to thinkthat excessive poverty and inequality shouldincrease the chances of political protest andcontestation,” he states. “Amartya Sen, however, hasnoted that famine often comes together with littlesocial upheaval. Extreme deprivation does notnecessarily lead to social protest.” Reddy uses theexample of India’s Maoist guerrillas, which areactive in about one third of the country’s districtsand are supported by tribal peoples whoseconcerns are not accommodated by the establishedpolitical structures, to show that the state itself can

become a failure if it does not address poverty andinequality. “India’s Naxalite movement is but oneexample of the socio-political effects of inequalityacross the developing world, including high growthemerging markets,” notes Jason Jackson of theLauder Institute and the Wharton School. He adds that high levels of crime and violence thatdisproportionately affect the poor in many urban centers in Latin America “are furthermanifestations of these asymmetric distributionaloutcomes that are often lost in the wider positivegrowth stories.” n


Poverty, Inequality and the Law

Discussions of poverty and inequality oftenenter the realm of the law. “Legalarrangements have major implications for

patterns of inequality,” says David Kennedy,Professor of Law at Harvard, who has writtenextensively on the global legal environment andadvised governments and internationalorganizations on issues having to do with globalgovernance. The law is, in part, shaped by outwardcircumstances such as the economy, politics andsocial structure, and it reciprocally affects thosevariables. Most crucially, “the law shapesbargaining power, the velocity of transactions andthe legitimacy of different economic practices.” IfHuber, Osterman and Spriggs are correct in theiremphasis on grand political bargains to arrest thetrend towards increasing inequality, then one mustsurely incorporate legal aspects into the analysis.

The law directly influences equality, at least ofrights if not outcomes. In the economic sphere, forinstance, women’s rights continue to trail men’s inmany countries. A recent World Bank reportcovering 128 developed and developing economiesfound a considerable degree of legal discriminationagainst women in areas that thwart employmentopportunities and entrepreneurship. For instance,in 45 countries women as of 2009 did not have thesame legal capacity to act or engage in economictransactions as men, in 49 countries women wereprevented from working in certain industries, andin 32 countries they did not have equal inheritancerights. Equal legal rights were found to result inbetter labor market opportunities and outcomes,and in a greater percentage of businesses owned ormanaged by women.

When it comes to labor legislation, not allcountries have ratified the basic conventionsconcerning freedom of association, forced labor,child labor and employment discrimination. In fact, only two thirds have ratified all theconventions. Enforcement at the local level is even

less uniform. Meanwhile, the last two decadeswitnessed a rapid increase in the legal protection of the property rights of shareholders. “The law has become increasingly skeptical of workers’rights when expressed collectively and increasinglyfriendly towards capital, and this is especially true in trade agreements,” says Spriggs.

Kennedy argues that, “while economic andfinancial realities have turned global, legal andgovernment structures exhibit a considerabledegree of compartmentalization.” The center-periphery structure that characterizes globaleconomic relationships, coupled with the law, tend to “perpetuate old patterns of inequality in arapidly changing world,” he says, adding that “thealchemy by which inequality becomes routinizedthrough the vernacular of experts and hardens as law is tough to unravel, but the effects areeverywhere on view.” Sassen points out that “legalsystems are resistant to change, mostly by design.Today, the law can no longer govern the quicklyevolving global economic and financial system,even as the latter ensures that new laws are made to enable its operations.” For Kennedy and Sassen,this state of affairs tends to reproduce preexistingpatterns of inequality. n

Saskia Sassen, Jack Goldstone, David Kennedy, Branko Milanovich, and Witold Henisz


What Is to Be Done about Poverty and Inequality?

The preceding analysis of the evolving global map of poverty and inequality, itsmanifestations in the labor market,

healthcare and the financial system, and itspolitical, social, cultural and legal roots provide the foundations for an agenda focused on effectiveameliorative actions. “There are many tools thatcan, and should be used, to address inequalities,”notes Burris. And, as just discussed, “the law can be used as a lever in promoting social andeconomic development.” The debate about thevirtues and the costs of different interventions and programs is rather intense.

One school of thought emphasizes that povertyand inequality are reflections of the structure ofsociety, and thus one needs to change the structureto improve the outcomes. Molly Smith, executivedirector of Prathan USA, an organization thathelps place Indian children into schools, arguesthat the politics of destitution and the politics ofaccess to critical resources are key, and that they are the consequences of the failures of socialstructures. “Poverty is primarily the consequenceof the way society is organized.”She believes that grassrootsorganizations have the potential to change the dynamicthrough their own actions and by influencing policy.

Elizabeth Clay Roy, the deputydirector of Opportunity Nation,a national campaign to expandeconomic opportunity andmobility, concurs. “Economicmobility is as important asinequality.” In fact, recent Pewstudies document that there isless mobility in the U.S. thanmost industrialized countries,

especially for low-income Americans. Influencingpolicymaking and politicians is crucial, but “there’sno one silver bullet” that can induce wholesalechange in the prevailing social structure.Sociology has recently emphasized the intricaterelationship between culture and social structure.Poverty is not only about tangible conditions, butalso about culture, though not in the sense thatpoor people espouse the wrong cultural values ornorms, as in the wrong-headed argument thatpoverty reveals a lack of self-reliance. Thesociology of culture can actually help unveil howpoor people are stigmatized in ways thatperpetuate their condition, so that it becomesstructural. Lamont argues that there is a complexrelationship between culture and poverty. “Therepeated experience of poverty has a very negativeimpact on people who suffer from it.” At questionis “the ability of societies to provide for theirstigmatized poor populations,” she notes. Butcultural research also shows that “societies orgroups that have a deeply ingrained identity oftenhave reduced rates of suicide or other negativehealth outcomes.” Cultural repertoires that

Scott Burris, Nitsan Chorev, and Michèle Lamont


strengthen collective identity have a positiveimpact on social resilience and help improvemental health outcomes, Lamont observes.“African societies are resilient because oftraditional social capital,” according to Goldstone,which helps reduce some forms of inequality, while at the same time it exacerbates other types of inequalities, especially those along gender or ethnic lines.

Briggs and Molly Smith concur in thatunderstanding the effect of culture is offundamental importance when it comes todesigning policy interventions. But Huber counters that “power structures and politicalcoalitions” are more determinant. After all, Witold Henisz, a Professor of management at The Wharton School, and Huber ask, “Where does culture come from?” Guillén points out that culture plays an independent role both at themacro and at the micro level. Some societies aremore tolerant of inequality than others. Lamont’sresearch clearly shows that culture can perpetuatepatterns of inequality.

A second school of thought argues that, instead of focusing on the large issues around the effect of social structure, setting specific goals is animportant first step in the process of fightingpoverty and inequality. Katherine Klein, aProfessor of Management and Vice-Dean for Social Impact at The Wharton School, concedesthat structures and systems are important tounderstand, but that “goals need to be set so as to focus attention and action.” The MillenniumDevelopment Goals (MDGs) adopted by theUnited Nations in 2000 are one such example.They have been subjected to considerable criticism

from several angles. McGovern, for instance, arguesthat “MDGs are useful but they may conceal microoccurrences of inequality.” Reddy admits thatMDGs are useful because they help focus theattention on important issues such as poverty,education, gender equality, health andsustainability. “But they have focused the attentionof elites and not necessarily of the general public,and sometimes they become justifications forbureaucracies to continue doing business as usual.”Moreover, there is considerable disagreement overhow progress towards goals is measured.

A third line of argument holds that standards, not goals, must be set, adopted and enforced.Osterman argues that the historical evidenceoverwhelmingly supports the contention that labor standards lead to reductions in poverty andinequality. Thus, “we must modernize standards so that they are always up to date, on a par with shifting realities in the workplaceand in labor markets.” Ultimately, he notes, “thesolution is political in nature,” an analysis thatSpriggs shares. “The good news is that there is agrowing global consensus today about someminimum standards,” he says. The ongoingeconomic crisis represents a stark reminder thatlabor standards and regulations are important for

“Economic mobility is as

important as inequality.”– Elizabeth Clay Roy

Katherine Klein


the long-term health of the economy. Yet,many governments, especially in Europe,continue to respond to the rapidlydeteriorating macroeconomic landscapeby curbing labor rights and standards.And in many countries, governmentgridlock, posturing, incompetence orcorruption limit implementation andcompliance with standards.

Beyond adoption, “it is important to keeptrack of whether actual practice on laborstandards follows the rhetoric,” says Hite.Osterman concurs, and wonders what thebest way is to enforce standards. At thetop of his list are the state and laborunions. But their dwindling resources andability to act prompt him to consider civilpressure, community organizing andcommitments by companies, thoughwithout duplicating state efforts or invitinggovernments to give up their responsibilities.Huber underlines that if the strategy revolvesaround adopting and enforcing standards, then“politics become paramount.” She notes that “thedecline of union density in Europe and the U.S. isassociated with rising wage dispersion andinequality. Spriggs agrees, adding that “in the U.S.,the National Labor Relations Board has languisheddue to political pressures and maneuvers aimed atmaking it ineffective.”

A fourth line of reasoning focuses on the crucialpoints in time at which people fall behind,sometimes never to recover. For instance, Fosleroffers the important insight that “inequality is nota continuous problem, but a step function, and thishas to be reflected in policy interventions.” As anexample, she argues that “high proportions ofyoung people don’t make it through high school,let alone college, and they find it difficult to makethe transition from school to work or from one jobto the next.” Roy adds geographical segregation to the mix. “Zip code oftentimes is more of adeterminant of opportunity than GPA.” Her work at Opportunity Nation focuses on the

“disconnected youth,” the 16-to-25 year-olds whoare not in school and not working. She has foundthat this phenomenon “is the best predictor of astate’s ranking in terms of economic opportunity.”Her policy recommendations focus on “creating asmooth path from high school to college, and thenfrom school to jobs.” Goldstone agrees, especiallyin the global context. “In the future, we need toincrease the opportunities available to, and theproductivity of, young people in developingcountries, which make up the majority of theworld’s population.”

A fifth approach to combating poverty andinequality argues that one must seize theopportunities to make improvements as theypresent themselves. “Oftentimes,” says Thompson,“we just fail to act when we can make a difference.”Based on his experience as Director of the Mayorof New York’s Office of Housing Coordination, heargues that “missed opportunities to make progressabound. We could start with the Civil War andreconstruction, but let’s focus on 1974, when NewYork City went bankrupt,” he observes. “In thewake of it, the city’s finances came under thecontrol of a committee of bankers, and many anti-poverty programs were abandoned. Another

Michèle Lamont and Terry McGovern


was in the 1980s, when the Reagan Administrationcut social programs. Another example took placein the wake of Obama’s election in 2008, when heasked for support to push healthcare, labor law andimmigration reform, and received commitmentsfrom various progressive interests and groups,which later simply dropped the ball.” Given thishistorical pattern of missed opportunities, heconcludes that “we do not lack opportunities; what we lack is the ability to mobilize for policiesto fight poverty and inequality.”

A sixth perspective on poverty and inequalityreduction focuses on entrepreneurship, which,according to Fosler, “has to be part of the answer.”Osterman agrees, adding that it “must be scalable.”Spriggs cautions against “the myth of smallbusiness” as a job creator, which in his view gets in the way of updating labor regulations andstandards, at least in the U.S. In Germany, bycontrast, research has documented that small- and medium-sized enterprises, which are verycompetitive in foreign trade, tend to create goodjobs. In developing countries, the debate overentrepreneurship and inequality centers on whatHite calls the “myth of the entrepreneur who, bybeing financially included, would lift him or herselfout of poverty, regardless of the political and socialcontext.” In any event, entrepreneurship cannot bea substitute for government programs in all areasand under all circumstances. Thus, governmentcannot recuse itself from its responsibilities. AsOsterman noted in the case of the U.S., it remainsto be seen whether entrepreneurship as a way outof poverty can be scalable to make a real difference. The seventh and last perspective on policy

interventions argues that pragmatic considerationsshould help focus action on the low-hanging fruit.Craig Smith, a Professor of Business Ethics atINSEAD, asks how one should allocate resources to help the largest number of poor children, forinstance, “knowing we may not be able to help all of them in the short term, especially the most inaccessible in the geographical sense.” Herecognizes that this approach raises ethical issues,but that one must prioritize. Reddy suggests that“moral philosophy has a role to play in poverty and inequality reduction efforts.” Miles agrees, butpoints out that most of the time her organization,Save the Children, does not have to make thatchoice because the cost of many interventions isactually quite low.

* * * * * * * * *

The challenges involved in reducing, andeventually eradicating, poverty and inequality aremassive and complex. We have discussed theimportance of unpacking patterns of poverty andinequality in different parts of the world, and fordifferent age and gender groups, realizing theirorigins in the dynamics of the labor market, thehealthcare sector, education and the financialsystem, and considering the legal, political andcultural underpinnings. In light of the sevenperspectives as to how to address poverty andinequality, we would like to advance an agenda for action focused on the following points:

• Striking a new political bargain amongstakeholders, including business and labor,tradable and non-tradable sectors, and

“In the future, we need to increase the opportunities available to, and

the productivity of, young people in developing countries, which

make up the majority of the world’s population.”– Jack Goldstone


between the real economy and the financialeconomy with a view to reducing inequalitywithin countries.

• Restoring labor market institutions as masterpillars of the economy, including technical and vocational training, collective bargaining,employers’ and workers’ organizations, andother forms of employer and laborrepresentation.

• Strengthening state capacity, not only in the area of legal security, but also in work,education, health and social wellbeing.

• Recalibrating the use of labor standards tofoster the creation of skilled and well-paidjobs, and a more robust enforcement based,not only on state and labor union strength, but also on community organizing andcommitments by business corporations.

• Rethinking and refocusing the public policiesaimed at empowering the poor and providinga social safety net at a time of fiscal pressure.

• Addressing the unique challenges faced byyoung people in developed, emerging anddeveloping countries by focusing on thetransitions from one level of the educationalsystem to the next, from school to work, andfrom job to job.

• Updating legal institutions in view of the moreinterconnected nature of economic, financialand social life, and creating new institutionsthat can handle global problems.

• Reconfiguring the relationship between citiesand rural areas at a time when over half thepopulation lives in the former but isdependent on food and other supplies fromthe latter.

• Experimenting with regulations to preventexploitative lending practices and promotingnew, scalable ways of facilitating saving andpayments for poor people and smallenterprises. n


• Global statistics on poverty: http://www.worldbank.org/en/topic/poverty• Poverty in the U.S.: http://www.census.gov/hhes/www/poverty/• Global statistics on income inequality: http://data.worldbank.org/data-catalog/world-development-indicators

• Income inequality in China: Jiandong Chen, Dai Dai, Ming Pu, Wenxuan Hou, and Qiaobin Feng, “The Trend of the Gini Coefficient of China.” Manchester: Brooks World Poverty Industry Working Paper 109 (2010).

• Income inequality in India: J. Salcedo Cain, Rana Hasan, Rhoda Magsombol, and Ajay Tandon, “Accounting for Inequality in India: Evidence from Household Expenditures.” Manila: Asian Development Bank (2008).

• Global middle class: Homi Kharas, The Emerging Middle Class in Developing Countries. Paris: OECD, 2010.

• Financial exclusion: Asli Demirguc-Kunt and Leora Klapper, “Measuring Financial Inclusion.” World Bank Policy Research Working Paper 6025 (2012). McKinsey, Micro-, Small and Medium-SizedEnterprises in Emerging Markets: How Banks Can Grasp a $350 Billion Opportunity.McKinsey & Co., 2012.

• Women’s legal status around the world: World Bank, Women, Business, and the Law. Washington, DC: The World Bank, 2010.

• M-pesa and other mobile banking applications in Africa: Jenny C. Aker and Isaac M. Mbiti, “Mobile Phones and Economic Development in Africa.” Journal of Economic Perspectives 24(3) (Summer 2010):207-232.

Sources


Florina Guadalupe Arrendondo Trapero, ITESM, MexicoMatthew Barton, The Lauder InstituteMargorzata Burchard-Dziubinska, University of Lodz, PolandScott Burris, Temple UniversityShahana Chatterjee, The Lauder InstituteAlpesh Chokshi, American ExpressNitsan Chorev, Brown UniversityFrederick Dickinson, The Lauder InstituteGail Fosler, The Gail Fosler GroupJack Goldstone, George Mason UniversityMauro F. Guillén, The Lauder Institute and The Wharton SchoolEmily Hannum, University of PennsylvaniaWitold Henisz, The Wharton SchoolNancy Hite, Tufts UniversityEvelyn Huber, University of North Carolina, Chapel HillJason Jackson, The Lauder Institute and The Wharton SchoolJerry Jacobs, University of PennsylvaniaLukasz Jurek,Wroclaw University of Economics, PolandDevesh Kapur, University of PennsylvaniaDavid Kennedy, Harvard Law SchoolKatherine Klein, The Wharton SchoolMichèle Lamont,Harvard UniversityManuel Lara, Universidad Autónoma Metropolitana, MexicoNora Breatriz Lemmi, Universidad Iberoamericana, MexicoMarton Markovits, The Lauder InstituteTerry McGovern, Columbia UniversityBranko Milanovic, The World BankCarolyn Miles, Save the ChildrenKarla María Nava, Universidad Autónoma de Tamaulipas, MexicoPaul Osterman,MIT Sloan School of ManagementLeticia Pagan, Polytechnic University of Puerto RicoNoam Peleg, University College London, UKSanjay Reddy, New School UniversityDavid Roodman, Center for Global DevelopmentElizabeth Clay Roy, Opportunity NationRosario Sádaba, University of Navarra, SpainSaskia Sassen, Columbia UniversityCraig Smith, INSEADMolly Easo Smith, Prathan USABrian Spooner, University of PennsylvaniaWilliam Spriggs, AFL-CIO and Howard University

Globalization TrendLab 2013 Participants


J. Phillip Thompson,Massachusetts Institute of TechnologyJeremy Tobacman, The Wharton SchoolKenric Tsethlikai, The Lauder InstituteMireya Vilar Compte, Universidad Iberoamericana, MexicoTianfu Wang, Tsinghua University, ChinaYi Wang, Tsinghua University, ChinaMichael Woolcock, The World Bank and Kennedy School, Harvard UniversityAnna Zachorowska-Mazurkiewicz, Jagiellonian University, Poland

Globalization TrendLab 2013 Participants


• Global Risk: New Perspectives and Opportunities (2011):http://lauder.wharton.upenn.edu/pages/pdf/other/Global%20TrendLab%202011%20Global%20Risk.pdf

• Sustainability: New Perspectives and Opportunities (2012):http://lauder.wharton.upenn.edu/pages/pdf/other/Global_TrendLab_2012_Sustainability.pdf

Download the white papers for past TrendLab Conferences:

Poverty & Inequality Persistent Challenges and New Solutions


Patterns of poverty and inequality have shifted around the world in the wake of the

migration of manufacturing jobs and the rise of the emerging economies. In this white paper, we

examine the challenges involved in reducing, and eventually eradicating, poverty and inequality

by analyzing their patterns in different parts of the world, identifying their origins in the dynamics

of the labor market, the healthcare sector and the financial system, and considering their political

and cultural underpinnings. We make a series of specific recommendations aimed at ensuring

that poverty and inequality enter a new phase of decline around the world.

Designed and Distributed by:

poverty & inequality -...

Documents