Inequality and Unsustainable Growth: Two Sides of the Same Coin?: 11

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See our FAQ for additional information. References Publications referenced by this paper. Resource degradation exacerbates social conflict over resource use. Oxfam therefore advocates sustainable, green growth. This means that the G20 economies should decouple growth from carbon emissions. Income inequality is rising in G20 countries.

Tackling inequality is key to reducing poverty. At the end of the report Oxfam makes several policy recommendations. In this guest blog published by The Broker, Sir Richard Jolly, research associate and former director of the Institute of Development Studies IDS , emphasizes that reducing inequalities is a crucial factor in the recovery of the current global economic crisis. This is addressed mainly at the leaders of Europe and the US. This is because many current approaches to reducing poverty and inequality fail to consider key institutional, policy and political dimensions that may be both causes of poverty and inequality, and obstacles to their reduction.

The central question that this report asks is: The report is divided into three parts: What is of interest, is that inequality is defined along different lines; mainly, the focus seems to be on income inequality hence the strong connection with poverty , but there are, for example, also chapters that deal with ethnic and regional inequality chapter 3 and gender inequality with a view to the market chapter 4.

In the concluding remarks, the report makes the following statement: Policies and institutions in the economic, social and political spheres need to be consciously coordinated to achieve maximum impact. Additionally, it highlights the relevance of high employment for increasing the effectiveness and reducing the costs of social policy.

Inequality and Unsustainable Growth: Two Sides of the Same Coin?

Lastly, the effectiveness of social protection programmes depends on what kind of economy is dominant in the country. The lack of effective complementarity between labour market participation and social policy in poverty reduction is particularly marked in low-income service-based economies and agrarian economies that are characterized by low productivity. In these types of economies, an overwhelming proportion of the working population is employed in the informal sector and therefore lacks adequate coverage by social protection programmes.

The main question addressed in this report is: Simultaneously, it focuses strongly on governance and policy measures that could mitigate inequality. The report urges that the labour market should be the first place to act, while arguing that whereas technological growth has facilitated economic growth, not everybody has been able to profit from this development. Better-educated workers have benefited and this is the reason why investing in the workforce is crucial, now more than ever while less skilled workers have stayed behind.

This polarization expresses itself in wage-inequality, which in its turn is reflected in the need for social protection. One of the proposed tax reforms includes tackling offshore tax evasion. In terms of the income-rise of top earners, the report states interestingly: This model has proven not only to be a success where stability, growth and development are concerned but is also a major contributor to the building of social capital and social cohesion.

Different approaches to tackling inequality have always concerned political choices. Beate Thoreseon, editor of Inequality Watch warns that a too one-sided focus on the poor may prevent understanding of what inequality is in a more in-depth way, which requires an analysis into the structural causes of inequality.

According to Thoresen, stimulating economic growth and providing equal opportunities is not enough to combat inequality. The report focuses on four countries with especially high inequality figures: One of the articles by Carol Romay focuses on the measures of inequality, mapping different methodological approaches. He seeks to shift the terms of the debate. Stiglitz demonstrates how, in the US, those born poor will stay poor yet nearly seven in 10 Americans still believe the ladder of opportunity exists. He argues for full employment, greater investment in roads, technology, education; far more stringent regulation and clear accountability.

Culpable bankers, he says, should go straight to jail. Stiglitz wants to see metrics that include the cost of inappropriate use of resources. He illustrates the price of immiseration and unfairness.

The demand created conditions that led to the production of many defective tyres. Defective tyres were related to more than 1, deaths and injuries and the recall of Firestone tyres in The opening statement of this report reads as follows: Those policies have caused unemployment to rise and remain high, and wages to lag behind productivity growth, and they have channelled rentier incomes towards the top 1 per cent of the income ladder.

In both developed and developing countries see table for a more detailed overview , the inequality of personal income distribution reflecting the distribution between profits and wages, disparities between income categories and redistribution by the state increased in the period - The report has the following to say on the question: Is greater income inequality inevitable?: This led to the widespread assumption that increasing income inequality is an inevitable by-product of structural changes brought about by globalization and technological change, or even a precondition for such change.

However, structural change also occurred throughout the past century, including during periods when inequality of income distribution was considerably lower. In many countries trade liberalization was accompanied by deregulation of the domestic financial system and capital-account liberalization, giving rise to a rapid expansion of international capital flows. International finance gained a life of its own, increasingly moving away from financing for real investment or for the international flow of goods to trading in existing financial assets.

Such trading often became a much more lucrative business than creating wealth through new investments. Inclusive growth and development requires active employment and redistribution measures, as well as supportive macroeconomic, exchange rate and industrial policies that foster productive investment and create decent jobs. A better income distribution would strengthen aggregate demand, investment and growth.

This in turn would accelerate employment creation, including in high-productivity activities that offer better remuneration and social benefits, thereby further reducing inequality.

Inequality and Unsustainable Growth : Two Sides of the Same Coin?

Its main findings were: Their average life evaluation score is 7. But it is not just wealth that makes people happy: Political freedom, strong social networks and an absence of corruption are together more important than income in explaining well-being differences between the top and bottom countries. At the individual level, good mental and physical health, someone to count on, job security and stable families are crucial. The World Happiness Report discusses ways to measure happiness and it gives policy recommendations to improve well-being.

Personal features that influence happiness include education, gender, age, mental and physical health, family experience. These factors often have a two-way interaction with happiness — physical health may improve happiness, while happiness improves physical health. Many other variables have a more powerful effect on happiness, including social trust, quality of work, and freedom of choice and political participation. The World Development Report analyzes the relationship between equity and development. The report documents the persistence of inequality traps by highlighting the interaction between different forms of inequality.

Inequality and Unsustainable Growth : Two Sides of the Same Coin?

It presents evidence that the inequality of opportunity that arises is wasteful and inimical to sustainable development and poverty reduction. The report aims to be very complete and to discuss everything related to inequality. Equal opportunities are necessary for economic growth in the long term. Due to unequal opportunities people with potentially good ideas cannot contribute to economic growth. According to the World bank, these unequal opportunities are caused by market imperfections, which need therefore to be removed.

Inequality and Injustice in our Global Economy Author: Birdsall argues that inequality can stall growth, tends to undermine good public policy and tends to inhibit effective collective decision making. Globalization tends to augment existing inequalities.

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In addition, existing rules tend to benefit most those countries and individuals which already have economic power. Those with power try to influence the redesign of these rules in their favor.