Within, between, and across: why is “where” so important in understanding global inequality?

Todd A. Knoop

Chapter 5 in Understanding Economic Inequality, 2025, pp 132-170 from Edward Elgar Publishing

Abstract: Here, inequality is examined from a global perspective, not just a country-specific perspective. When we consider inequality across the globe from the standpoint of individuals (ignoring nationality), global inequality and between-country inequality has declined significantly. However, within-country inequality has increased to offset much of this improvement. As a result, overall global inequality today is primarily domestic and much closer to home. However, it is still true that location has important ramifications for both understanding and addressing global poverty. “Where” matters a lot when determining “how much”—and we will seek to understand why this is the case in this chapter. We will also examine how inequality is shaping population and health as poorer countries experience an epidemiological transition as higher incomes lead to fewer preventable deaths. To understand all of these changes, we will focus on the role of incentives and the economic institutions that shape these incentives. We will see that when institutions are inclusive, people engage in productive behaviors that increase income, but when institutions are extractive, poverty traps are created. However, the importance of historical path dependence—the fact that today's institutions are inevitably shaped by past institutions—often means that institutions are difficult and slow to change. As a result, the importance of “where” will continue to persist.

Keywords: Global inequality; Between-country inequality; Epidemiological transition; Extractive institutions; Historical path dependence; Migration (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035360116
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