In this paper, we review the recent literature on global interpersonal income inequality. While all estimates agree that the level is very high, with a Gini of between 0.630 and 0.686 in the 1990s, there is no consensus regarding the direction of change. We discuss methodological issues, including the use of national accounts versus survey- based estimates of mean income (or consumption) and the choice of purchasing power parity exchange rates. Findings of a rise or fall in global income inequality are not robust across different estimation methods and datasets. Given the diversity of estimates and various sources of uncertainty, including gaps and errors in the underlying data, we conclude there is insufficient evidence to determine the direction of change in global interpersonal inequality in recent decades.
This chapter investigates recent advances in our understanding of the global distribution of income, and produces the first estimates of global inequality that take into account data on the incomes of the top one percent within countries. We discuss conceptual and methodological issuesincluding alternative definitions of the global distribution, the use of household surveys and national accounts data, the use of purchasing power parity exchange rates, and the incorporation of recently available data on top incomes from income tax records. We also review recent attempts to estimate the global distribution of income. Our own estimates combine household survey data with top income data, and we analyze various aspects of this distribution, including its within-and between-country components, and changes in relative versus absolute global inequality. Finally, we examine global poverty, which is identified through the lower end of the global distribution.
This paper considers the proposal that each country distribute its resource rents directly to citizens as a universal and unconditional cash transfer, or Resource Dividend, and estimates its potential impact on global poverty. Using a global dataset on resource rents and the distribution of income, I find that if every developing country implemented the policy then the number of people living below the World Bank's $1 a day global poverty line would be halved. A range of further practical benefits are discussed, including the amelioration of the resource curse in resource-rich countries, and the incentive that the policy provides to informal workers to register with the fiscal system. Administrative and political challenges that the policy would face are discussed, and it is argued that in most cases they would not be insuperable.
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