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Symposium 2013

Background Paper - Poverty, inequality and equity – rethinking the paradigm

The Challenge

Rising inequality and the associated perception of inequity (unfairness) will impact global politics significantly in 2013. The phenomenon affects both rich and poor countries, and is apparent in diff ...

Rising inequality and the associated perception of inequity (unfairness) will impact global politics significantly in 2013. The phenomenon affects both rich and poor countries, and is apparent in different forms, in democracies, oligarchies and autocracies. If the percentage of wealth in the hands of a tiny number of people becomes disproportionately large, while median wealth has stagnated, social problems are inevitable. When this occurs in circumstances of high levels of unemployment and conditions of fiscal austerity, the problem is exacerbated. This characterizes the situation in much of the world at present. Recent research suggests that high measures of income inequality are strongly correlated with dangerous social pathology, while greater equality of income correlates with better social indicators. The areas considered include physical and mental health, educational performance, child well-being, trust and community life, social mobility, teenage births, obesity, drug abuse, violence and imprisonment.

To manage systemic global risks, and to protect the global commons, we need better governance of transnational challenges. It is not clear that we are moving in the right direction. The tension between the short-term pressures on national leaders from their citizens, and the trade-offs needed to balance costs and benefits in inter-national and inter-temporal transactions, makes collective action on transnational scales difficult under most circumstances. Current events, from the recent global financial crisis and recession, to the risk of inflection points if we transgress planetary boundaries, make it clear that present arrangements are far from satisfactory.