World leaders, including Brazil, Norway, South Africa, and Spain, along with Nobel laureate Joseph Stiglitz, have called for the establishment of an International Panel on Inequality. The proposed panel, similar to the Intergovernmental Panel on Climate Change, aims to assess the scale of inequality, its drivers and consequences, and policies that can reduce it. The African Union endorsed the initiative in February, and South Africa plans to present a General Assembly resolution to establish it. This move could lead to a permanent scientific body within the multilateral system focused on inequality.
The African Centre of Excellence for Inequality Research has been working on country inequality diagnostics and analyses with African researchers and national statistical offices for over a decade. Their work, summarized in a recent book on inequality in sub-Saharan Africa, highlights the need for African-led assessments of inequality. The centre's co-authors, Murray Leibbrandt and Anda David, emphasize that frameworks built mainly on global north data and institutions might not accurately reflect the realities of inequality in Africa, where it is most severe.
To address this issue, the African Inequality Review was developed to close the knowledge gap about inequality in Africa. The review aims to conduct new cross-country research on African inequality and create a public resource linking the continent's inequality datasets. This initiative can offer African-led assessments of inequality, grounded in the continent's institutions and labour markets, and linked data infrastructure needed to study rents, assets, and fiscal choices alongside household outcomes.
Africa's demographic shift will significantly impact global inequality, with the continent accounting for more than half of the world's population growth by the end of the century. The economically active population in Africa is expected to drive most of the global growth, and since most Africans are concentrated at the bottom of the global income distribution, this shift will pull the world's distribution with it. Between 1990 and 2016, the share of the world's poorest income decile living in sub-Saharan Africa rose from about one in five to one in three.
The African Inequality Review is modeled on previous reviews, such as the Deaton Review in the UK and the Latin American and Caribbean Inequality Review. The launch of the review involved an African Expert Panel, ensuring senior African policymakers, practitioners, and researchers participated. The panel discussed two questions: where are important policy choices being made without necessary evidence, and which inequality questions, answered well, would change policy? Several priorities emerged, including the need for better data on fiscal, corporate, and asset issues.
Participants at the African Expert Panel meeting highlighted the importance of linking household survey research with tax records, administrative and firm-level data, and ownership and procurement registers. This would connect the distribution of outcomes to the mechanisms that produce them. They also emphasized that single summary measures, such as the Gini coefficient, have limitations and cannot tell governments which policies to prioritize to address inequality.
The International Panel on Inequality, if established, will require a strong African evidence base to effectively assess and address global inequality. The African Inequality Review can provide valuable insights and a model for research designed with policymakers. With Africa's young and growing population determining the future of global inequality, it is crucial that the panel's assessments reflect the realities of the continent. Key initiatives, such as the African Inequality Review, can help shape the future of global inequality.
Key points
- The proposed International Panel on Inequality requires a strong African evidence base to effectively assess and address global inequality.
- The African Inequality Review aims to close the knowledge gap about inequality in Africa and provide African-led assessments of inequality.
- Africa's demographic shift will significantly impact global inequality, with the continent accounting for more than half of the world's population growth by the end of the century.
