Inequality in Developing Countries: What Do We Know?
In an April 28 2014 tweet, the Pope declared inequality to be “the root of social evil”. Thomas Piketty’s book, Capital in the Twenty-First Century attracted considerable attention, particularly on this side of the Atlantic. By presenting a number of facts on inequality over the past 200 years, it forcefully documents the almost-uninterrupted increase in the concentration of wealth that took place within the wealthiest nations. An intense and often passionate debate ensued on what these facts meant for economic development in general and what policies were warranted. While the countries included in Piketty’s analysis are exclusively the wealthiest ones, one wonders about the extent to which these observations and the broader lessons derived from them are applicable to the developing world (Milanovic 2014).