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The World Bank’s New Inequality Indicator : The Number of Countries with High Inequality

Author

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  • Haddad,Cameron Nadim
  • Mahler,Daniel Gerszon
  • Diaz-Bonilla,Carolina
  • Hill,Ruth
  • Lakner,Christoph
  • Lara Ibarra,Gabriel

Abstract

The World Bank recently introduced a new key indicator to guide its work: the number of countries with high inequality, defined as a Gini index above 40. The new indicator was introduced as part of the new World Bank vision of ending poverty on a livable planet. This paper reviews why reducing inequality matters for ending poverty on a livable planet, summarizes the advantages and disadvantages of using the Gini index to track inequality, outlines challenges in measuring inequality, and discusses what a Gini threshold of 40 implies. Using the most recent data for every country, 52 countries of a total of 169 countries are classified as high inequality countries, which represents a decline from 77 countries at the beginning of the millennium.

Suggested Citation

  • Haddad,Cameron Nadim & Mahler,Daniel Gerszon & Diaz-Bonilla,Carolina & Hill,Ruth & Lakner,Christoph & Lara Ibarra,Gabriel, 2024. "The World Bank’s New Inequality Indicator : The Number of Countries with High Inequality," Policy Research Working Paper Series 10796, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10796
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