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Global inequality and the global inequality extraction ratio: the story of the past two centuries

Author

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  • Milanovic, Branko

Abstract

Using social tables, the author makes an estimate of global inequality (inequality among world citizens) in the early 19th century. The analysis shows that the level and composition of global inequality have changed over the past two centuries. The level has increased, reaching a high plateau around the 1950s, and the main determinants of global inequality have become differences in mean country incomes rather than inequalities within nations. The inequality extraction ratio (the percentage of total inequality that was extracted by global elites) has remained surprisingly stable, at around 70 percent of the maximum global Gini, during the past 100 years.

Suggested Citation

  • Milanovic, Branko, 2009. "Global inequality and the global inequality extraction ratio: the story of the past two centuries," Policy Research Working Paper Series 5044, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5044
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    References listed on IDEAS

    as
    1. Milanovic, Branko & Lindert, Peter & Williamson, Jeffrey, 2007. "Measuring Ancient Inequality," MPRA Paper 5388, University Library of Munich, Germany.
    2. Branko Milanovic, 2006. "An Estimate Of Average Income And Inequality In Byzantium Around Year 1000," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(3), pages 449-470, September.
    3. Maddison, Angus, 2007. "Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History," OUP Catalogue, Oxford University Press, number 9780199227204.
    4. Branko Milanovic & Peter H. Lindert & Jeffrey G. Williamson, 2011. "Pre‐Industrial Inequality," Economic Journal, Royal Economic Society, vol. 121(551), pages 255-272, March.
    5. Milanovic, Branko, 2007. "An even higher global inequality than previously thought," MPRA Paper 6676, University Library of Munich, Germany.
    6. Prados De La Escosura, Leandro, 2008. "Inequality, poverty and the Kuznets curve in Spain, 1850–2000," European Review of Economic History, Cambridge University Press, vol. 12(3), pages 287-324, December.
    7. Paul Bairoch, 1981. "The Main Trends in National Economic Disparities since the Industrial Revolution," Palgrave Macmillan Books, in: Paul Bairoch & Maurice Lévy-Leboyer (ed.), Disparities in Economic Development since the Industrial Revolution, chapter 1, pages 3-17, Palgrave Macmillan.
    8. Joerg Baten, 2000. "Economic Development and the Distribution of Nutritional Resources in Bavaria, 1797-1839: An Anthropometric Study," Journal of Income Distribution, Ad libros publications inc., vol. 9(1), pages 6-6, June.
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    Cited by:

    1. Guillaume Allègre & Xavier Timbeau, 2015. "La critique du Capital au XXI e siècle . À la recherche des fondements macroéconomiques des inégalités," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 31-55.
    2. Erfurth, Philipp Emanuel, 2021. "Unequal Unification? Income Inequality and Unification in 19th Century Italy and Germany," SocArXiv 2fma9, Center for Open Science.
    3. Kalinowski, Slawomir, 2018. "The problem of poverty and social exclusion in the European Union countries in the context of sustainable development," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 180(3), September.
    4. repec:hal:spmain:info:hdl:2441/6cveipjp238a0afbjf8ivdsi62 is not listed on IDEAS
    5. Erfurth, Philipp, 2024. "Unequal unification? Income inequality and unification in nineteenth century Italy and Germany," International Review of Law and Economics, Elsevier, vol. 78(C).
    6. repec:spo:wpmain:info:hdl:2441/4g0qd281j48jib2k4okap9f4eo is not listed on IDEAS
    7. repec:spo:wpmain:info:hdl:2441/6cveipjp238a0afbjf8ivdsi62 is not listed on IDEAS
    8. Guillaume Allègre & Xavier Timbeau, 2014. "The critique of capital in the twenty first century : in search of the macroeconomic foundations of inequality," Documents de Travail de l'OFCE 2014-10, Observatoire Francais des Conjonctures Economiques (OFCE).
    9. John G. Ingersoll, 2024. "Inequality in the Distribution of Wealth and Income as a Natural Consequence of the Equal Opportunity of All Members in the Economic System Represented by a Scale-Free Network," Economies, MDPI, vol. 12(9), pages 1-32, August.
    10. Yessi Vadila & Budy P. Resosudarmo, 2020. "Tariff reform and income inequality in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 455-475, June.
    11. Serrano, Joaquín & Benzaquén, Ivana, 2017. "La frontera de posibilidades de desigualdad en América Latina," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(334), pages .427-461, abril-jun.
    12. Duarte Leite & Óscar Afonso & Sandra Silva, 2014. "A tale of two countries: a directed technical change approach," FEP Working Papers 539, Universidade do Porto, Faculdade de Economia do Porto.
    13. repec:hal:spmain:info:hdl:2441/4g0qd281j48jib2k4okap9f4eo is not listed on IDEAS
    14. José Gabriel Palma, 2011. "Forum 2011," Development and Change, International Institute of Social Studies, vol. 42(1), pages 87-153, January.
    15. Alberto Chilosi, 2010. "Poverty, Population, Inequality, and Development: the Historical Perspective," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(2), pages 469-501, December.
    16. González, Mariano & Larrú, José María, 2012. "Egalitarian aid. The impact of aid on Latin American inequality," MPRA Paper 41660, University Library of Munich, Germany.
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    19. Undp, 2011. "HDR 2011 - Sustainability and Equity: A Better Future for All," Human Development Report (1990 to present), Human Development Report Office (HDRO), United Nations Development Programme (UNDP), number hdr2011, September.
    20. repec:hal:spmain:info:hdl:2441/6g0gsihsjmn5snc9pb0h529k0 is not listed on IDEAS
    21. Slawomir Kalinowski & Anna Rosa, 2021. "Sustainable Development and the Problems of Rural Poverty and Social Exclusion in the EU Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 438-463.

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    More about this item

    Keywords

    Inequality; Poverty Impact Evaluation; Equity and Development; Services&Transfers to Poor; Access to Finance;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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