Worlds Apart: Measuring International and Global Inequality

by Branko Milanović

We are used to thinking about inequality within countries--about rich Americans versus poor Americans, for instance. But what about inequality between all citizens of the world? Worlds Apart addresses just how to measure global inequality among individuals, and shows that inequality is shaped by complex forces often working in different directions. Branko Milanovic, a top World Bank economist, analyzes income distribution worldwide using, for the first time, household survey data from more than 100 countries. He evenhandedly explains the main approaches to the problem, offers a more accurate way of measuring inequality among individuals, and discusses the relevant policies of first-world countries and nongovernmental organizations.


Inequality has increased between nations over the last half century (richer countries have generally grown faster than poorer countries). And yet the two most populous nations, China and India, have also grown fast. But over the past two decades inequality within countries has increased. As complex as reconciling these three data trends may be, it is the inequality between the world's individuals is staggering. At the turn of the twenty-first century, the richest 5 percent of people receive one-third of total global income, as much as the poorest 80 percent. While a few poor countries are catching up with the rich world, the differences between the richest and poorest individuals around the globe are huge and likely growing.

Genres: Economics, Nonfiction, Sociology

240 pages, Paperback

First published May 9, 2005

About the author

Branko Milanović (Serbian Cyrillic: Бранко Милановић, IPA: [brǎːŋko mǐlanoʋitɕ; milǎːn-]) is a Serbian-American economist. He is most known for his work on income distribution and inequality. Since January 2014, he is a visiting presidential professor at the Graduate Center of the City University of New York and an affiliated senior scholar at the Luxembourg Income Study (LIS). He also teaches at the London School of Economics and the Barcelona Institute for International Studies. In 2019 he has been appointed the honorary Maddison Chair at the University of Groningen.

Reviews

[Steven Peterson · Rating 4 out of 5]

Branko Milanovic is an economist with the World Bank, who specializes in studying income inequality and poverty. This work is an intriguing analysis of inequality in the world. It is also useful in that he also discusses all the problems with measuring exactly how much inequality there is between nations and even within nations.

He begins by noting that the common currency for individual and national level income can't simply be per capita income, since some currencies have greater purchasing power than others. Even if one reduce all monetary systems to the dollar, the same problem exists. In some countries the dollar will buy a lot more because prices of goods and services are pitched so low; but if those people then go to the United States or Western Europe, their dollars won't go very far at all. So, Milanovic opts for what he calls "Purchasing Power Parity."

Then, he discusses various ways of determining the extent of income inequality within countries. Readers will be introduced to that hardy statistic, the Gini Index, as well as other approaches to the subject. The heart of the book is an analysis of global income inequality. One of his findings is rather troubling. Most countries never advance up the ranks from the lowest tier (4th world); more countries are apt to drop from higher to lower tiers. He traces the dynamics from 1960 to 1978 to 2000, and the picture depicted is not very pretty. The world is not becoming more equal in terms of income distributions within societies in the near past.

He explores many other issues over the course of this book, but the preceding provides a clue as to what he is dealing with in this volume.

His conclusion? Only a world government can attack global economic inequality. Logically, it makes sense. Practically, it has two chances of coming about--slim and none, and slim has left town (to use the old phrase). Perhaps readers will disagree with my assessment of the likelihood of this solution coming about. But that is the stuff of debate and discussion over important issues. Overall, not always easy to plow through, but it is an intriguing book and it raises quite a few issues that are sure to stir debate.

[Diego · Rating 5 out of 5]

Branko Milanovic explica las principales formas de estimar la desigualdad global y elabora una serie de argumentos sobre la importancia que este tema tiene en el mundo globalizado en el que vivimos.

Es un libro muy técnico y lleno de datos que vale mucho la pena para entender algunos de los cambios más relevantes en los últimos 60 años en el mundo.

[Michalyn · Rating 4 out of 5]

A slim book but probably the best overview of the measurement (and ideological) debates surrounding international inequality. Milanovic is meticulous yet writes in a very clear way. A must read for anyone interested in globalization and international development.

[Serge · Rating 5 out of 5]

What I appreciated most about this book was its clarity. Milanovic teaes out three different concepts of inequality that force the reader to reckon with the enormity of confronting global disparities. Concept 1 is unweighted international inequality. Milanovic describes Concept 2 as "population-weighted international nequality". Concept 3 "goes back to the individual as the unit of analysis, ignoting country boundaries ("we line up all individuals regardles of the country, from the poorest to the richest")"I ageee that Purchaing Power Parity is a more reasonable measure of economic power and that "time-intransitivity" contrains its usefulness for longitudinal studies. Milanovic challenges the reader to hold three things in tension: within-country inequality, between country inequality, and the overlap between both. He accounts for the fact that "some of today's countries were colonies, and that it is difficult to obtain data on their GDP per capita." He notes that 1978 was the last year of relatively fast world growth (2.6 percent per capita) and that it was also the last year before the second oli-crisis and the tripling of oil prices. He argues that for twelve years, between 1982 and 1994, there was a steady and sharp increase in intercountry inequality-- a growing divergence in countries' economic performance, with poor countries doing, on average, worse than rich ones. He notes that Latin America has still not recovered from its lost decade in the 1980s and that by the year 2000, twenty-four African countries hd a GDP per capita that was smaller than twenty years earlier. Improved education, increasing labor force, and capital accumulation were offset by political instability, inflation, fiscal deficit, and graft. He observes that there is an "africanizaion" of poverty with four out of five African countries belonging to the Fourth World. The absence of rule of law and ethnic fractionalization are two contributing factors. Milanovic dedicates considerable attention to the rise and eventual stagnation of China and to the hard cold fact that 90 percent of the world population receives a little less than one third of the world income. We are a globe of rich and poor: only 17.4 percent of the world population can be called "middle class". He has no easy pescriptions for addressing the inequalit ythat he documents. Instead he points to the surging migration crisis and the ineffectiveness of global aid to de facto plutocracies. A sobering and important book.