Inequality and Globalization

When thinking about inequality, it makes sense to approach the world as a single community. When looking at the world through this lens, some notable trends stand out. The first is that global inequality greatly exceeds inequality within any individual country. This observation should come as no surprise, since global inequality reflects the enormous differences in wealth between the world's richest and the world's poorest countries, not just the differences within them. Much more striking is the fact that, in a dramatic reversal of the trend that prevailed for most of the twentieth century, global inequality has declined markedly since 2000. Even as global inequality has declined, however, inequality within individual countries has crept upward. To counteract this trend, states should pursue policies aimed at redistributing income, strengthen the regulation of the labor and financial markets, and develop international arrangements that prevent firms from avoiding taxes by shifting their assets or operations overseas.