Unequal income distribution between countries

Dependence on unequal income distribution among countries
International income gap
Income inequality among countries
Maldistribution of wealth between countries
Excessively wealthy countries

Nature

Unequal income distribution between countries refers to the significant disparities in average income levels and economic well-being across nations. This problem manifests as wealthier countries enjoying higher standards of living, advanced infrastructure, and greater access to resources, while poorer countries face persistent poverty, limited opportunities, and underdevelopment. Such inequality hinders global economic growth, exacerbates social and political tensions, and impedes efforts to reduce poverty worldwide. Factors contributing to this issue include historical exploitation, differences in education, technology, governance, and access to global markets, making it a central challenge for international development and cooperation.

Background

Unequal income distribution between countries emerged as a prominent global concern in the mid-20th century, highlighted by post-colonial economic disparities and the publication of influential reports such as the 1970 Pearson Commission. The issue gained further attention through the United Nations’ Human Development Reports and World Bank analyses, which underscored persistent gaps between developed and developing nations, prompting international dialogue on economic justice and the structural roots of global inequality.

Incidence

There is worsening inequality both within societies and between states. In 1960, it was estimated that the richest fifth of the world's population, almost all living in developed countries, were 30 times richer than the poorest fifth, almost all living in developing countries. By 1997 the top fifth were 74 times richer, and the figures are believed to have got worse since then.

The income disparity between the richest 20% and the poorest 20% of the world's people has more than doubled in the years between 1970 and 2000, going from 30 to 1 to 61 to 1.

Comparative per capita income in developed market countries in 2000 was ten to eleven times higher than in developing market economies. On a regional basis for all countries: Africa was just below the average for developing market economies; Asia above the average and 30 to 40% above Africa; the Middle-East was about $300 higher than Latin America, but less than a third of the developed market economy's average; all European countries average over ten times Africa, and seven times Asia, but were 15% lower than the developed market economies; Australia-Oceania and North America were the highest – both above the average for developed market countries, the former 5% above average, the latter 35% above; North American per capita income exceeded African by over 1,500%.

Between 1960 and 1993 the per capita income gap between industrial and developing countries almost tripled. The growth of the world economy from 1962 to 1997 was enormous, measured only by GDP, which falls far short of measuring wealth in its entirety. Informal business and speculative activities are left out, especially clandestine and illegal activities, which, regrettably today make up a substantial share of globalized economic activity. Nevertheless in 35 years it rose from 1.1 to 24.9 thousand million dollars. The poor countries were comparatively poorer in 1997 than 35 years previously. The one fifth poorest countries achieved absolute growth in the sixties and have stagnated (in absolute terms) in the 15 years up to 1997. This explains why their share has declined in a more than alarming manner, from 0.21 to 0.07%.

Although they saw the repercussions of the crisis of the late sixties and early eighties, the rich countries recovered their share of 92% of international GDP. The countries at an intermediate level of development recovered in the period 1990-1994, with figures corroborating the "opportunities" for countries of intermediate growth at the periphery to integrate into the "wave of globalization".

Claim

The average amount of pocket money of children in the USA in 1993 – $230 a year – is more than the total annual income of the world's half-billion poorest people.

The vast inequalities between the poor and the rich nations create one of the world's most serious and urgent problems. Failure to reduce the international income gap, or even to prevent it from widening further, is a major source of international tension and a threat to peace.

Counter-claim

It is quite unlikely, with the best will in the world, that international inequalities can be reduced, or even prevented from increasing, for the rest of this century. But if one looks at realities rather than appearances, this does not seem an insoluble problem. The immediately urgent objectives are to achieve a substantial absolute improvement in the levels of the poorest countries (which is by no means identical with reducing inequality) and to bring about profound qualitative changes in all countries, which are needed for their survival in a world of limited resources and delicately poised ecological equilibria. To make a major issue of international inequalities only distracts attention from these more serious and urgent problems. It plays into the hands of those who are interested not in achieving real economic progress but in making political capital out of alleged economic failure.