More than 75 per cent of the world’s population lives in societies that are more unequal today than 20 years ago. In many parts of the world, income gaps have deepened despite impressive growth performances. The sharpest increases in income inequality have taken place in those developing countries that were especially successful in pursuing vigorous growth and managed, as a result, to graduate into higher income brackets.1 Economic progress may well exacerbate inequalities, not alleviate them.
Something about the dominant pattern of growth in many countries has clearly been harmful for income distribution among households. Data on household income inequality show a rising trend beginning in the 1980s in most countries. In 2016, the share of total national income accounted for by just that nation’s top 10 per cent of earners (top 10 per cent income share) was 37 per cent in Europe, 41 per cent in China, 46 per cent in the Russian Federation, 47 per cent in the United States of America and Canada, and around 55 per cent in sub-Saharan Africa, Brazil and India. In the Middle East, the top 10 per cent captures 61 per cent of national income.