Examining Inequality: Who Really Benefits from Global Growth?

SummaryThis paper analyzes global consumption distribution from 1993 to 2001. It demonstrates that half of the increase in global consumption in the 1990s benefited the developed world populations. The other main beneficiary was China’s population—the number of Chinese in extreme poverty fell and a new global middle-class emerged.Elsewhere, the per capita consumption of the poor rose at half the global average rate: much less than one-to-one growth. Growth did help the poor, but it was much better for the rich. The analysis suggests that relying on growth to reduce poverty is rather inefficient; more direct state interventions seem more effective.These insights are poorly illustrated by global indices, such as Gini coefficients, but are strikingly demonstrated by density curves—the wider use of which could better inform debate in this area.