1. WeD and Inequality: Issues from Recent Work on Inequality in Middle Income Countries Andy McKay, University of Bath Researching Wellbeing workshop, Hanse Institute, July 2004

2. July 2004Researching Wellbeing 2 Introduction Inequality as relevant aspect of wellbeing Instrumental reasons Intrinsic reasons And a key theme of WeD proposal Context of this presentation Drawing on other work, to initiate discussion about WeD work in this area

3. July 2004Researching Wellbeing 3 Concepts of inequality Inequality as an issue at local, national and international levels Requires a universal  cf. legal understandings of rights Focus on differentiation – quantification Inequality of what? Multidimensional Outcomes and opportunities, and intermediate cases But some wellbeing indicators zero-one

4. July 2004Researching Wellbeing 4 Concepts of inequality (2) Inequality between whom? Individuals and households But also groups of individuals (e.g. ethnic groups, regions or countries) Inequality over what time horizon? Short and long term – need for a dynamic perspective Both horizontal and vertical inequality are important – for explanation, and for policy responses

5. July 2004Researching Wellbeing 5 Horizontal inequality Inequality between important groups of individuals e.g. racial groups in Brazil or South Africa; regions in China Relationship to concepts of social exclusion? Discrimination as a contributory factor Even perception of horizontal inequality may be sufficient Horizontal inequality important for understanding and for policy response Rights as a key issue Example of “myth of racial democracy” in Brazil

6. July 2004Researching Wellbeing 6

7. July 2004Researching Wellbeing 7 Discrimination and horizontal inequality Differences between groups not just due to discrimination But can play an important part and needs specific policy responses Different forms of discrimination  Formal and informal  Direct and indirect persistence Difficult though to identify extent of discrimination

8. July 2004Researching Wellbeing 8 Discrimination (2) Example of gender differentials in wages Partly reflects different qualifications and occupations Discrimination where those of equal qualifications in same occupation paid differently  Still difficult to identify – what qualification are relevant? But “pre-entry” discrimination?  Educational qualifications  Occupational distribution

9. July 2004Researching Wellbeing 9 Vertical inequality In fact intra-group inequality generally larger than inter-group inequality Measures to tackle horizontal inequality unlikely to address this (could increase it?) Need for a broader understanding of factors underlying inequality Policies, external shocks, nature of redistributive spending, use of services etc. e.g. “universal” health spending in Brazil

10. July 2004Researching Wellbeing 10 Vertical inequality (2) Key importance of political factors influencing distribution of power e.g. Institutions  expected patterns of behaviour, rules of the game  e.g. ability to form horizontal alliances Legacy of history e.g. clientelist government in Latin America Democracy, decentralisation etc. – and their effectiveness in practice

11. July 2004Researching Wellbeing 11 Relevance for work on wellbeing High inequality does have adverse impacts on wellbeing Inequality as an issue within and between communities