Over the past decade, inequalities have been placed at the center of the global social and economic policy agenda. This was driven in large part by the pioneering work of British economist Sir Tony Atkinson, French economist Le Capital au XXIe siècle by Thomas Piketty, and the work of sociologists like Goran Therborn.
All of the United Nations’ key development goals, such as the Sustainable Development Goals, are premised on the need to tackle increasing levels of inequality across the world and have as key goals.
Global attention to inequality is also informed by a set of issues that have given rise to more virulent right-wing politics in the US, UK and much of Europe. This is the result of increasing levels of inequality and high levels of discontent among so-called “blue collar workers”, and the consequent rise in identity politics.
But, in our opinion, the debates on inequalities have not been sufficiently informed by the perspectives of the countries of the South.
If we are to tackle inequalities across the world, the issue of inequalities between countries – and the historical and political factors that give rise to it – cannot be ignored.
In view of this reality, we have identified four main problems which we believe should guide the research agenda in the countries of the South. Despite the attention the world has paid to the issue of inequality, in reality very little has been done to address the problem. This is most clearly shown by the COVID-19 pandemic, which has revealed massive inequalities across the world.
Part of the reason is that the realities of inequality in developing countries and the forces behind these patterns are not sufficiently understood. For example, according to the International Labor Organization in Africa, around 85.8% of jobs are informal. These workers are not part of the way labor markets are traditionally understood.
Another big difference is that in most northern countries, tax transfers are able to improve inequality outcomes. The Global South has limited fiscal reach because it lacks the capacity to raise significant tax revenues.
Areas of intervention
Based on our knowledge gained from establishing the Southern Center for Inequality Studies and our first four years of research, we have identified four areas that we believe should be at the forefront of the research agenda of academics in the countries of the South.
We present them below.
Technical solutions : These include in particular fiscal transfers. While important, they alone are not enough to tackle inequalities. What is needed is a better understanding of the political, social and economic factors behind the growth of inequalities. This includes how these forces may be different in countries of the South. Inequality is a global problem, but that does not mean that its causes are universal. Inequality is in essence a matter of power, which is socially constructed. For this reason, context is important. While inequality is a global problem, its growth is most pronounced and the political, social and economic challenges it poses are the most complex and pronounced in the countries of the South.
Monetary valuations: An example of such assessments is the Gini coefficient, which measures levels of inequality. These assessments have been useful in measuring inequalities but do not offer useful solutions. Studies and policies on inequalities must move away from the concern of these measures. This is important if we are to understand inequality as a violation of human dignity. Here, a multidisciplinary approach is needed if we are to resolve the challenge of inequalities. History, sociology, gender studies, anthropology, philosophy, natural sciences and health sciences have as much to contribute as economics.
It is for this reason, for example, that UNAIDS Executive Director Winnie Byanyima will be presenting the Southern Center for Inequality Studies annual conference on inequality. Ms. Byanyima was previously Executive Director of Oxfam International and Director of Gender and Development at UNDP.
Differences in capacity: It is important to understand the differences in the fiscal capacities of the countries of the North and the South to fight against inequalities. High-income countries can alleviate high levels of inequality somewhat because they have high tax levels and strong state capacity. But this is not possible in most countries of the South – at least not to the same extent. This generates complex social and economic challenges that require political attention.
Hip joint: This highlights the need to understand that inequalities within countries are inextricably linked to the forces that shape inequalities between countries. The problem cannot be solved in just one geography. Inequalities between countries must be tackled simultaneously.
The COVID-19 pandemic has highlighted how countries are bearing the burden of the pandemic in very different ways.
The heaviest tolls were imposed on the most economically marginalized countries. In South Africa, for example, job and income losses have been most pronounced. Low-paid workers, youth, and workers in the informal economy and service sectors have borne a disproportionate burden of job and income losses. Women, who represent a substantial share of workers in the service economy, have been hit the hardest.
Northern countries have been able to protect their economies from the impact of the COVID-19 pandemic thanks to a stimulus package of an unprecedented level. The US stimulus package has been estimated at US $ 1.9 trillion. Developing and emerging economies, on the other hand, have been plunged into a deep economic crisis as a result of the pandemic.
The COVID-19 pandemic has also highlighted inequalities between countries. This is particularly evident in the way access to vaccines has been determined. This undermines recovery in both developing and developed countries and underscores the need to address inequalities as a global problem, between countries and within countries.
Despite all of the excellent academic research on inequality, the COVID-19 pandemic shows us that very little has been accomplished at the political level to actually rise to the challenge and move to a more equal world. If we are to do this, global policies must take into account the realities of unequal economic and social models around the world.
Moreover, the realities of inequality from the perspective of the countries of the South must inform these policy changes. If we do not pursue such an ambitious political agenda, the COVID-19 pandemic will be another shock, like the 2008 global financial crisis, which exposes the fragility and inequalities of our economic and social systems, but which we quickly forget – that is, until the next global shock.
Southern Center for Inequality Studies Annual Inequality Conference 2021 to be presented on Thursday, September 30
Imraan Valodia, Dean of the Faculty of Business, Law and Management and Director of the Southern Center for Inequality Studies, University of the Witwatersrand