The World Bank’s New Inequality Indicator: The Number of Countries with High Inequality

Cameron Nadim Haddad, Daniel Gerszon Mahler, Carolina Diaz-Bonilla, Ruth Hill, Christoph Lakner and Gabriel Lara Ibarra

No 10796, Policy Research Working Paper Series from The World Bank

Abstract: The World Bank recently introduced a new key indicator to guide its work: the number of countries with high inequality, defined as a Gini index above 40. The new indicator was introduced as part of the new World Bank vision of ending poverty on a livable planet. This paper reviews why reducing inequality matters for ending poverty on a livable planet, summarizes the advantages and disadvantages of using the Gini index to track inequality, outlines challenges in measuring inequality, and discusses what a Gini threshold of 40 implies. Using the most recent data for every country, 52 countries of a total of 169 countries are classified as high inequality countries, which represents a decline from 77 countries at the beginning of the millennium.

Date: 2024-06-10
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