Inequality under globalisation

A theory of changing inequality was offered for developing countries by Simon Kuznets in 1955, positing a rise in inequalities in the early stages of development but a decline later on. This was thanks in part to efforts at the World Bank to begin to compile a comprehensive global data set of inequality measures, along with income measures prepared by the Penn World Tables and Purchasing Power Parity estimates of the relative purchasing power of different national currencies. In turn, this enables a descriptive history of inequality going far beyond in detail, accuracy and causal implications the limited information reported on households or persons in surveys. In short, Kuznets correctly captured the critical role played by intersectoral structural change in inequality; however, his historical experience precluded him from applying that correct insight to the particular and peculiar facts of globalisation. And this, in a nutshell, is what we know about the relationship between globalisation and inequality.