Inequality Out of World Bank's 2030 Strategy? (Devex)
Research Fellow Alex Cobham is quoted in a Devex piece on a recent leaked World Bank strategy document that fails to address income inequality.
But the World Bank has recently come under fire for placing too much focus on economic growth in its anti-poverty paradigm, without addressing income inequality. The omission came to light in leaked strategy documents, entitled ”A Common Vision for the World Bank Group,” which defines how the bank would conduct its development work until 2030.
If the strategy is approved, the World Bank wants to reduce the number of people living in extreme poverty to 3 percent by 2030 and doing so would require increasing income growth of the bottom 40 percent of the population in every country.
Last week week, a group of economists and development experts appealed to address the problem of inequality in the post-2015 framework.
The strategy, according to critics, is silent on the complex relationship between poverty and inequality.
“Inequalities threaten our ability to pursue fair and sustainable development as much as they threaten the eradication of extreme poverty,” the group said in a joint statement. “Research shows that inequality — both within and between countries — is a barrier to individual development and sustained economic growth.”
They suggested that the inequality target should be based on the income share ratio of the top 10 percent of a population and the bottom 40 percent. The ratio shows whether the top 10 percent receives a larger share of the national income than the bottom 40 percent.
This indicator has also been suggested by Alex Cobham, a research fellow at the Center for Global Development Europe office. In a March 15 paper, Cobham noted that countries reducing the ratio compared to countries increasing the ratio are three times higher in reducing incidences of one dollar-per-day poverty and hunger.
