High and rising inequality has become one the defining challenges of our time, causing concerns among policymakers, especially in G7 countries. As a response, policy makers have adopted different strategies to address the issue. We argue that the unsatisfactory results of this uncoordinated approach reflects a misunderstanding of the multidimensional nature of inequality and of its main drivers. A common and coordinated framework among G7 countries, both individually and as a group, could prove more effective in addressing inequalities. Policy Implications• G7 countries need to develop a common understanding on the drivers, trends and related policy implications to tackle inequalities more effectively.• A common framework on inequalities is developed as a new policy tool to bring together the economic and non-economic dimensions of inequality and establish a link between the different dimensions of inequality and their key drivers.
Over the last years, inequality has climbed on top of the political agenda both in the G7 and G20, also as a response to the wide discontent against governments’ policies. However, discussions have developed along significantly different patterns. On one hand, the G7 managed to develop a joint understanding on the main drivers and on the domestic and global policies to tackle the multiple dimensions of inequality, with no country‐specific commitment. On the other hand, G20 countries have taken up domestic policy commitments for greater inclusiveness, but they did not accomplish agreement on any common framework. Indeed, works can be further developed in both fora; however, the development of a multilateral policy‐oriented framework on inequalities and inclusiveness in the G20 appears more pressing. Looking also at the G7 experience, this would require putting inclusive growth on top of the G20 Presidencies’ work plans, ensure a stronger political engagement by all members and tackle some of the persistent flaws in the G20 governance.
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