1. Peter Edward and Andy Sumner
Twin Peaks to Burgeoning Precariat? The co-evolution of global inequality and global poverty,
Peter Edward and Andy Sumner

2. Contents Introduction The GrIP model of growth, inequality and poverty
Is global inequality really falling?
Who benefited from growth since the Cold War?
Global poverty,
Conclusions

3. 1. Introduction
What has happened to global inequality & poverty since the Cold War? Major source of contention – benefits of growth, liberalisation since end of Cold War
Data has got a lot better but still quite questionable. Not only methodological issues – conceptual too. Various concepts of pro-poor/inclusive growth
Orthodox narrative fragile? Global poverty falling fast; Global inequality (between countries and individuals) falling too; market orientated growth poverty reducing; Policy implications = don’t worry too much about managing growth benefits or national inequality?

4. 2. The GrIP model of growth, inequality and poverty

5. GrIP v2.0
Growth, Inequality and Poverty GrIP is model of consumption, output and distribution
Model built from:
Survey distributions, survey means, PovcalNet, 8 Oct 2014
HFCE and GDP in 2011 PPP, population headcounts, additional survey distributions, WDI, 17 Oct 2014; HFCE and GDP in 2005 PPP, WDI, 18 Dec 2013
Additional survey distributions, WIID3b, Sept 2014
GDP growth forecasts, IMF World Economic Outlook (WEO), Oct 2014
Population growth forecasts, UNPD World Population Prospects (WPP) 2012 (medium forecast)
Conceptual and methodological issues (of many):
Differing concepts of global inequality and poverty
2005 vs 2011 PPPs (here 2011PPP unless stated)
Consumption/income surveys
Top income adjustment or not
Etc…

6. 3. Is global inequality really falling?

7. Global Gini,

8. But… global Gini exc. China, 1990-2012

9. Global density curve, 1990-2012: Twin peak to burgeoning precariat
Expansion in consumption in top global decile ($30+ per day)

10. Global density curve exc. China (again), 1990-2012

11. 4. Who benefited from growth since the Cold War?

12. Absolute benefits by fractile (2011PPPs push crossover point left ward)

13. Relative benefits by fractile (2011PPP ‘lifts’ poorest 60%)

14. Regional and national variation important for policy/politics
Regional and national patterns suggest benefits of growth can be managed or growth governed differently
So, a low tech quiz…

15. Guess the growth incidence curve, 1990-2012
Which region?
Which country?

16. Stylized growth incidence curve, 1990-2012
Which region?
Which country?
See literature on varieties of (late) capitalism; welfare regimes; etc.

17. 5. Global Poverty,

18. What consumption level?
Every dime under $2.50 adds 100m people so…
$1.25 rejigged to $1.90 & fall in poverty due to rejig
Multi-dimensional poverty double $1.90 and close to $2.50 level (1.7bn)
$4 = developing world median
$10 = security from poverty & poorest OECD decile

19. 2012: 2005 PPP vs 2011 PPP

20. Global poverty (2012-IMF WEO – 1% & historic distribution trend)

21. Global poverty exc. China

22. But… how much difference might inequality and growth make?

23. Kuznets revenge? Growth & structural change accompanied by rising net Gini where much of global poor live thus future growth less pro-poor
Data: Solt (2014)

24. 6. Conclusions
Poverty > precarity & twin peaks to burgeoning precariat of 3.2bn (half global popn & half of popn in most MICs)
Much heralded fall in global inequality barely visible when China exc. (or top income adj) & national inequality flat overall but rising where world’s poor conc.
Growth benefits vary drastically so role of policy in governance of growth – varieties of late capitalism; welfare regimes.
Considerable uncertainty about future level and location of poverty
The orthodox narrative for post 1990 looks fragile?