15-Year-Old Thinking for Post-2015 Solutions on Inequality?
A serious critique of the new UN goalsJune 6th, 2013 | by Nick Galasso
The much-anticipated recommendations for a post-2015 agenda report is bold and full of optimism, as my Oxfam colleagues acknowledge (a welcome treat in an otherwise uncertain era). I especially like the authors’ certainty that we can eradicate extreme poverty from the earth by 2030.
The new goals also specifically address a number of challenges left out of the Millennium Development Goals (MDGs) 13 years ago, which signals to me that world leaders are really listening (a welcome, and unfortunately too uncommon, occurrence). Toward that end, the report acknowledges the interplay of conflict, violence, sustainability, governance, urbanization, and inclusive growth as not silos; but rather as a constellation of interdependent issues that must be addressed to create a more prosperous and healthy world for everyone.
Now that I’ve gushed, let me raise a serious critique about how the report addresses inequality.
Despite a growing global consensus that income inequality must be halted, the High-Level Panel did not generate targets for inequality reduction. Instead, reducing inequality is claimed to be imbued across all the goals. The Panel claims, rightly, that inequality is a national issue. For sure, solutions to inequality must happen within the cultural, political, economic contexts of countries. However, though solutions need to be tailored nationally, that doesn’t mean we can’t insist on global targets. There’s still plenty of time to develop what targets could look like. Others will agree and disagree, but I think excluding the idea this early on is premature and lacks creativity.
Further, there’s very little in the report to help countries think about ways to reduce inequality. Unfortunately, the report falls back on a tired narrative of economic growth as a be-all solution.
This answer reflects 15-year-old thinking that’s inappropriate for post 2015 world. For instance, in the report there’s a lot of talk about inclusive growth, which inherently reduces inequality, but there’s no suggestion for how to make growth inclusive, only talk about the need to increase productivity.
Worse, the parts on inequality and growth lack any mention of the role of government. As we know, it’s committed governmental intervention and political will making reductions in inequality possible among the few countries where it’s decreasing. Along these lines, there’s no mention of policies aimed toward inequality reduction, including stronger social insurance, more efficient taxation, and cash transfers to the poor. Last, there’s a few lines on the need for deregulation, which makes perfect sense in terms of curbing corruption. However, there should equally be language about how the deregulation of labor standards over the past 30 years has contributed to growing inequality.
With regard to measuring inequality, the report encourages countries to use income quintiles. I’m happy to see an endorsement for looking at how income is distributed. Yet, as we know, in many countries the severity of inequality is between the very, very top 1-5 percent and the rest. Therefore, the Panel should encourage countries to take data collection more seriously to gain a more fine-grained understanding of the differences between the very top and the very bottom. One way to start down this path is encouraging countries to utilize the Palma measure of inequality, which is the ratio of income between the top 10% and the bottom 40%.
I’ve said it once. After reading the report, I’ll say it again. It’s time to move the discussion from absolute to relative gains.