Speaking of inequality…

..I came across this map of the world’s Gini coefficients at the incredible, incomparable, what-would-I-do-without-it Wikipedia. It shows in clearer form than ranks of numbers how generally there is a negative correlation between the Gini coefficient and GDP per capita.

The richer a country, the more equal!

All sorts of things mess up that glib conclusion – social policy, economic policy, population size, ethnography, economic structure, war and civil conflict, colonialisation, etc – but it’s still interesting.

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5 Responses to Speaking of inequality…

  1. THR says:

    It’s an interesting chart. It’s certainly worth asking questions about why some countries are more ‘equal’ than others. There are several rough hypotheses that suggest themselves.
    First, open markets perform better than sheer despotic tyrannies. But developed welfare states perform better than those with merely (relatively) open markets. Venezeula, with its much-maligned leader, performs much better than most of its continent. Canada out-performs the US. China makes no pretence of being ‘communist’. And Central Europe and Japan manage to be relatively wealthy and relatively equal.

  2. Jarrah says:

    Yes, it makes sense that strong welfare policies will make for more equal societies. So in that sense, they ‘perform better’. However, they perform worse on other measures, so obviously there’s a trade-off. How much inequality is too much?

  3. THR says:

    The ‘trade-off’ is hardly self-evident in the chart above, given that some of the most equal societies also have the best standards of living and life expectancy. It may be a spurious correlation, but many of the more unequal countries have pretty high levels of social unrest (i.e. China, South Africa, Brazil).

  4. Jarrah says:

    Of course it’s not evident in the chart above – it only measures the Gini coefficient.

    “some of the most equal societies also have the best standards of living and life expectancy.”

    Yes, that’s what I said originally. And it highlights the problem with correlations – which way does causation flow? :-)

  5. THR says:

    Whichever way it goes, simply by accepting the proposition, you already go a long way toward overcoming vast amounts of bullshit and ideological assumptions. You’d have to look at each specific case to assess the causality of it. I’m suggesting that in broad terms, these results shouldn’t be surprising.

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