Shifting economic paradigms are altering distributional dynamics.
By Dr. Zia Qureshi
Senior Fellow – Global Economy and Development
Brookings Institution
Income and wealth inequality has risen in many countries in recent decades. Rising inequality and related disparities and anxieties have been stoking social discontent and are a major driver of the increased political polarization and populist nationalism that are so evident today. An increasingly unequal society can weaken trust in public institutions and undermine democratic governance. Mounting global disparities can imperil geopolitical stability. Rising inequality has emerged as an important topic of political debate and a major public policy concern.
Current inequality levels are high. Contemporary global inequalities are close to the peak levels observed in the early 20th century, at the end of the prewar era (variously described as the Belle Époque or the Gilded Age) that saw sharp increases in global inequality.
Over the past four decades, there has been a broad trend of rising income inequality across countries. Income inequality has risen in most advanced economies and major emerging economies, which together account for about two-thirds of the world’s population and 85 percent of global GDP (Figure 1). The increase has been particularly large in the United States, among advanced economies, and in China, India, and Russia, among major emerging economies.
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