Reducing inequality is front and center of the current economic policy agenda. Multilateral institutions like the IMF and the World Bank have accepted that high inequality leads to macroeconomic instability and lowers growth and that lower inequality helps make growth sustainable in the long run.
But there is no magic bullet. Reducing inequality requires a long hard slog of building institutions for better tax and expenditure policies, improving the efficiency of redistribution, ensuring fairness, and increasing accountability. There is also no substitute for a strong state that designs effective fiscal policies and protects the interests of those who struggle to provide economic stability and security for their families, both in the developed and the developing world.