OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Inequality in the Developing World OUP CORRECTED PROOF – FINAL, 04/02/21, SPi UNU World Institute for Development Economics Research (UNU-WIDER) was established by the United Nations University as its first research and training centre and started work in Helsinki, Finland, in 1985. The mandate of the institute is to undertake applied research and policy analysis on structural changes affecting developing and transitional economies, to provide a forum for the advocacy of policies leading to robust, equitable, and environmentally sustainable growth, and to promote capacity strengthening and training in the field of economic and social policy-making. Its work is carried out by staff researchers and visiting scholars in Helsinki and via networks of collaborating scholars and institutions around the world. United Nations University World Institute for Development Economics Research (UNU-WIDER) Katajanokanlaituri 6B, 00160 Helsinki, Finland www.wider.unu.edu OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Inequality in the Developing World Edited by C A R L O S G R A D Í N , M U R R AY L E I B B R A N D T, A N D F I N N TA R P 1 A study prepared by the United Nations University World Institute for Development Economics Research (UNU-WIDER) OUP CORRECTED PROOF – FINAL, 04/02/21, SPi 1 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. 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OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Foreword Inequality is a dominant challenge to development. It influences economic growth and redistribution, and feeds into power asymmetries that can jeopardize democ- ratization and human rights, trigger conflict, and entrench chronic poverty. Inequality is at the core of the United Nations mandate, and is one of the seventeen goals of the 2030 Agenda for Sustainable Goals. While global inequality fell, by and large, towards the end of the twentieth century, since the start of this century within- country inequality has been steadily rising—underpinning intense public and academic debates to the extent that it has become a prevailing policy concern of many countries and in all multilateral agencies. There has been strong interest for decades in bringing both developed and developing countries together in the analysis of global inequalities and the forces shaping them. Initially the lack of adequate data for such was a fundamental handicap. To address this, UNU-WIDER established the (freely downloadable) World Income Inequality Database (WIID) which compiles income inequality information from primary sources for developed, developing, and transition countries. In turn, the WIID increased the volume of the voice for analytical research on between-country and within-country inequalities. Hence the launch of UNU-WIDER’s Inequality in the Giants project—as part of a broad international effort designed to shed light on a set of new questions on such inequalities, by generating integrated datasets and applying a consistent methodology to investigate the determinants of inequality dynamics in ten of the world’s largest economies: Brazil, China, France, India, Indonesia, Mexico, Russia, South Africa, the UK, and the US. Employing advances made in recent decades on the measurement of inequality, as well as in the development of better data to analyse the processes which generate inequality, this book is the result of rigorous scientific work by a large team of international experts, each highly qualified within their respective research niches. I sincerely thank the editors—Carlos Gradín, Murray Leibbrandt, and Finn Tarp— for their sharp analytical and editorial skills, which result in giving us a more layered, more nuanced understanding of inequality in developing countries. UNU-WIDER gratefully acknowledges the support and financial contributions to its research programme by the governments of Finland, Sweden, and the UK. Without this vital funding our research and policy advisory work would be impossible. Kunal Sen Director, UNU-WIDER Helsinki, June 2020 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Acknowledgements This book has roots in discussions in late 2013/early 2014 between Francois Bourguignon, Francisco Ferreira, and Nora Lustig, later adding Murray Leibbrandt, to discuss a project idea put forward by Nora Lustig and referred to as ‘Inequality in the Giants’. The team developed the preliminary set of notes from this meeting into a five-page draft research proposal, originally meant to cover nine of the biggest countries in the world (Brazil, China, France, India, Mexico, Russia, South Africa, the UK, and the US. Subsequently, Indonesia was included, so the target number of case countries ended up being ten. The intention was to mobilize funding from different sources to implement the project with the team of four (above) as principal investigators. Finn Tarp, then director of UNU-WIDER, was invited to join the team, and a large number of potential contributors to the project were invited to a workshop on the sidelines of the UNU-WIDER conference Mapping the Future of Development Economics, held in Helsinki on 17–19 September 2015. The workshop was productive in terms of ideas. Funding for the ‘big’ project did not materialize as originally hoped, however. Instead, UNU-WIDER man- aged to move forward with a subset of countries—namely Mexico, South Africa, and India—coordinated by respectively Nora Lustig, Murray Leibbrandt, and Peter Lanjouw. Subsequently China and Brazil, coordinated by Shi Li and Marcelo Cortes Neri, joined the project, while Carlos Gradín joined the coordination team. The coordinators and their respective teams of authors produced several studies on each country, which were published in the WIDER Working Paper series. Much of this work also reached academic journals. We felt, however, that a comprehensive book and coherent statement was called for. We therefore put together a proposal that included both the attempt at analysing in-depth inequalities within our group of five large developing countries that jointly account for more than 40 per cent of the world’s population and the relationship with global inequality issues. Accordingly, we proposed to frame five country syntheses by broader contributions from development economists who are leaders in the field of inequality measurement, trends, impact, and policies. They agreed and each provided an excellent take on a set of key framework-setting issues that contextualize the country case studies and put them in perspective. We owe a profound debt to the original team of three for their inspiring stimulus. Their early notes and engagement in the work session organized with UNU- WIDER in September 2015 has been of great value. We would also like to express OUP CORRECTED PROOF – FINAL, 04/02/21, SPi viii Acknowledgements our most sincere gratitude to the chapter authors in this book for their willingness to participate in the research project and for their many insightful contributions. The same goes for the extensive and excellent group of collaborators on the background papers on each country case, synthesized here in this book. Warm thanks are also due to UNU-WIDER for institutional support and never failing collaboration. We wish in particular to thank Lorraine Telfer-Taivainen, UNU-WIDER Editorial and Publishing Associate, for sound advice, hard work, and making the collaboration with Oxford University Press run smoothly. Adam Swallow, Economics and Finance Commissioning Editor at Oxford University Press, and his colleagues provided expert guidance with the publication process, and we do wish to acknowledge the anonymous referee reports that helped sharpen our focus and change the organization of the book. Finally, a word of thanks to the donors of UNU-WIDER—Finland, Sweden, and the UK—for their core support to the work programme of UNU-WIDER, without which this book would not have been possible. Carlos Gradín, Murray Leibbrandt, and Finn Tarp Helsinki, Cape Town, and Copenhagen June 2020 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Contents List of Figures xi List of Tables xiii List of Abbreviations xv Notes on Contributors xvii PA RT I . I N T R O D U C T IO N 1. Setting the Scene 3 Carlos Gradín, Murray Leibbrandt, and Finn Tarp PA RT I I . G L O BA L I N E Q UA L I T Y A N D I N E QUA L I T Y W I T H I N C O U N T R I E S 2. What Might Explain Today’s Conflicting Narratives on Global Inequality? 17 Martin Ravallion 3. Comparing Global Inequality of Income and Wealth 49 James Davies and Anthony Shorrocks 4. Empirical Challenges Comparing Inequality across Countries: The Case of Middle-Income Countries from the LIS Database 74 Daniele Checchi, Andrej Cupak, and Teresa Munzi PA RT I I I . I N E QUA L I T Y I N F I V E D EV E L O P I N G G IA N T S 5. Brazil: What Are the Main Drivers of Income Distribution Changes in the New Millennium? 109 Marcelo Neri 6. China: Structural Change, Transition, Rent-Seeking and Corruption, and Government Policy 133 Shi Li, Terry Sicular, and Finn Tarp 7. India: Inequality Trends and Dynamics: The Bird’s-Eye and the Granular Perspectives 157 Hai-Anh H. Dang and Peter Lanjouw OUP CORRECTED PROOF – FINAL, 04/02/21, SPi x Contents 8. Mexico: Labour Markets and Fiscal Redistribution 1989–2014 180 Raymundo Campos-Vazquez, Nora Lustig, and John Scott 9. South Africa: The Top End, Labour Markets, Fiscal Redistribution, and the Persistence of Very High Inequality 205 Murray Leibbrandt, Vimal Ranchhod, and Pippa Green PA RT I V. I N E QUA L I T Y I N A B R OA D E R C O N T E X T 10. Economic Inequality and Subjective Well-Being Across the World 233 Andrew E. Clark and Conchita D’Ambrosio 11. China and the United States: Different Economic Models But Similarly Low Levels of Socioeconomic Mobility 257 Roy van der Weide and Ambar Narayan 12. From Manufacturing-Led Export Growth to a Twenty-First Century Inclusive Growth Strategy: Explaining the Demise of a Successful Growth Model and What to Do about It 284 Joseph E. Stiglitz PA RT V. SY N T H E SI S A N D P O L IC Y I M P L IC AT IO N S 13. Synthesis and Policy Implications 321 Carlos Gradín, Murray Leibbrandt, and Finn Tarp Index 339 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi List of Figures 2.1. Global inequality and its between- and within-country components 19 2.2. Inequality within the developing world 21 2.3. Relative inequality and growth in household income per capita 22 2.4. Global inequality for various weights on (log) national mean income 30 2.5. The elephant graph of Lakner and Milanovic 32 2.6. Lorenz curves for global income 1988 and 2008 33 2.7. Consumption floor for the developing world 36 2.8. Elephant or serpent? 38 2.9. Absolute inequality and growth in household income per capita 39 2.10. Plot of changes in absolute poverty against changes in absolute inequality across developing countries 40 3.1. Income inequality trends 2000–15, selected indices 56 3.2. Trends in wealth inequality vs income inequality, selected indices 57 3.3. Alternative decomposition routes 60 3.4. Between-country and within-country components of income inequality 61 3.5. Between-country and within-country components of wealth inequality 64 3.6. Counterfactual trends in income inequality 67 3.7. Counterfactual trends in wealth inequality 68 4.1. Impact of non-monetary incomes 79 4.2. Labour income availability at the individual level 80 4.3. Taxes and social security contributions as a percentage of total gross income 81 4.4. Extent of missing or zero income 83 4.5. Trends in income inequality (Gini index) in selected middle-income countries (USA as benchmark) 87 4.6. Evolution of income shares held by households with incomes below the 50th, and above the 90th and 95th percentiles 88 4.7. Inequality decomposition in labour incomes 91 4.8. Income inequality (Gini index) versus selected macroeconomic country characteristics 94 6.1. China’s Gini coefficient 134 6.2. Growth incidence curves for China 136 6.3. The composition of household income in China 137 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi 6.4. Primary sector employment in China as a share of total employment (per cent) 1980–2015 139 6.5. Wage growth of rural–urban migrant workers in China (%) 140 6.6. The shares of fiscal spending on education, medical insurance, social security, and agriculture in total budgetary expenditures in China 141 6.7. Growth of exports and imports of China (million US$) 142 7.1. Disparities in human capital outcomes, by social group 160 7.2. Impacts of upward mobility on consumption growth (at different percentiles: IV regression 1 (90% confidence bound) 175 8.1. Gini coefficient, 1989–2014 182 8.2. Decomposition of differences in the distribution of earnings: 1989–2014 185 8.3. Relative returns and relative supply of workers by education, college, and high school vs rest 187 8.4. Fiscal incidence analysis, core income concepts 194 8.5. Government transfers (% of GDP), 1988–2018 195 8.6. Fiscal policy and inequality, 1996–2015 196 8.7. Fiscal policy and poverty, 2008–15 197 9.1. Difference in estimated mean taxable income between NIDS and PIT by income bracket 214 9.2. Total effects of different variables over the distribution of earnings 218 9.3. Concentration curves for direct taxes 221 9.4. Distribution of selected fiscal benefits 222 9.5. The progressivity of each of the three main social cash transfers in South Africa 222 9.6. Socioeconomic class sizes, 2008–17 224 10.1. The distribution of the dependent variables 240 11.1. Great Gatsby Curve 263 11.2. Income mobility versus education mobility 264 11.3. Intergenerational mobility in education 266 11.4. Intergenerational mobility versus GDP per capita 268 12.1. Simulated manufacturing output shares 295 12.2. Manufacturing value added (% of GDP) in sub-Saharan Africa 296 12.3. Distribution of active population according to education level 304 xii List of Figures OUP CORRECTED PROOF – FINAL, 04/02/21, SPi List of Tables 3.1. Shorrocks–Shapley decomposition of global income inequality 61 3.2. Shorrocks–Shapley decomposition of global wealth inequality 64 3.3. Shorrocks–Shapley decomposition of changes in global income and wealth inequal ity 70 4.1. Descriptive statistics of variables used in the empirical analysis 92 4.2. Regression analysis: OLS including all contextual variables 95 4.3. Regression analysis: country fixed effects selecting some contextual variables 98 4.4. Regression analysis: country fixed effects selecting some contextual variables—most recent observations (year > 2000) 100 5.1. Inequality in Brazil by topic, technique, dataset, period of time, and income concept 111 5.2. Income, equality, and social welfare: contribution to growth ordered by disposable income 124 6.1. China’s regional and urban/rural income gaps 135 6.2. Gini coefficients of urban wages and income per capita in China, 1988–2013 144 7.1. Inequality trends in real consumption expenditure 159 7.2. Income shares in Palanpur over time (%) 165 7.3. Inequality of individual incomes 166 7.4. Decomposing inequality in India 169 7.5. Welfare transition dynamics based on synthetic panel data, India 1987/88–2011/12 (%) 172 8.1. Bound and Johnson decomposition: 1989–94; 1994–2006; 2006–14 (assuming an elasticity of substitution σ = 2 and comparing college and high school-educated workers with rest of workers) 188 9.1. Real annual growth rates in South Africa since 1990 206 9.2. Income components in per capita terms (real 2014 prices, rand) 209 9.3. Household composition from 1993 to 2014 210 9.4. Dynamic decompositions including household composition and re-rankings, 1993–2008 211 9.5. Gini coefficients at different thresholds 215 9.6. Labour market summary statistics, 2000, 2011, and 2014 217 10.1. Descriptive statistics: Afrobarometer 241 10.2. Descriptive statistics: Asianbarometer 241 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi xiv List of Tables 10.3. Descriptive statistics: Latinobarometer 242 10.4. Descriptive statistics: Eurobarometer 242 10.5. Economic conditions and inequality: OLS results in the Afrobarometer 244 10.6. Economic conditions and inequality: OLS results in the Asianbarometer 244 10.7. Economic conditions and inequality: OLS results in the Latinobarometer 245 10.8. Economic conditions and inequality: OLS results in the Eurobarometer 245 10.A1. List of items per dataset 249 10.A2. Number of observations per country per wave: Afrobarometer 250 10.A3. Number of observations per country per wave: Asianbarometer 250 10.A4. Number of observations per country per wave: Latinobarometer 251 10.A5. Number of observations per country per wave: Eurobarometer 252 10.A6. Economic conditions and inequality: OLS results in the Afrobarometer—all controls 253 10.A7. Economic conditions and inequality: OLS results in the Asianbarometer—all controls 254 10.A8. Economic conditions and inequality: OLS results in the Latinobarometer—all controls 255 10.A9. Economic conditions and inequality: OLS results in the Eurobarometer—all controls 256 12.1. Manufacturing share of GDP (%) 285 12.2. Deindustrialization in sub-Saharan Africa 296 OUP CORRECTED PROOF – FINAL, 04/02/21, SPi List of Abbreviations BRICS Brazil, Russia, India, China, South Africa group CCT conditional cash transfer CES constant elasticity of substitution CFPS China Family Planning Survey CHIP China Household Income Project DHI disposable household income DISE District Information System for Education ENIGH National Survey on Households’ Income and Expenditures FDI foreign direct investment GATT General Agreement on Tariffs and Trade GCIP Global Consumption and Income Project GDIM Global Database of Intergenerational Mobility GDP gross domestic product GGC Great Gatsby Curve GIC growth incidence curve GNI gross national income HDI Human Development Index IBGE Brazilian Institute of Geography and Statistics IHDS India Human Development Surveys IMF International Monetary Fund IPR intellectual property rights LIS Luxembourg Income Study LIT learning, industrial, and technology LSMS World Bank Living Standard Measurements Surveys (LSMS) MDGs Millennium Development Goals MENA Middle East and North Africa MLD Mean Log Deviation MRP mixed recall period NBS National Bureau of Statistics NIDS National Income Dynamics Study NSS National Sample Survey Organization OECD Organisation for Economic Co-Operation and Development PIT personal income tax PME Pesquisa Mensal de Emprego PNAD Pesquisa Nacional de Amostras a Domicílio PNADC Pesquisa Nacional de Amostras a Domicilio Contínua PPP purchasing power parity PSID Panel Study of Income Dynamics QE quantitative easing OUP CORRECTED PROOF – FINAL, 04/02/21, SPi xvi List of Abbreviations QLFS Quarterly Labour Force Survey R&D research and development RAIS Registro Anual de Informações Sociais RIF re-centred influence function SARS South African Revenue Services SCs Scheduled Castes SDGs Sustainable Development Goals SIA scale invariance axiom SNA System of National Accounts SOEs state-owned enterprises SSA sub-Saharan Africa SWIID Standardized World Income Inequality Database TSTSLS two-sample two-stage least squares US United States WID World Inequality Database WIID UNU-WIDER World Income Inequality Database WIPO World International Properties Rights Organization WTO World Trade Organization OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Notes on Contributors Raymundo Campos-Vazquez obtained his PhD in economics from the University of Califormia, Berkeley in 2009. Since then, he has worked as a professor in El Colegio de Mexico in Mexico City. He has publications in the American Economic Review , Oxford Development Studies , and American Economic Journal: Economic Policy , among others. Currently he is on academic leave at the Banco de Mexico. Daniele Checchi is a professor of economics at the University of Milan. He also serves as a Secretary General of the LIS Cross-National Data Center in Luxembourg. He has published in journals such as Economic Policy , Journal of Public Economics , European Sociological Review , and others, and his research interests range from inequalities in educational attainments to educational policies, from wage inequalities to the role of labour market institutions in shaping inequalities of opportunities. Andrew E. Clark is CNRS research director and a professor of economics at the Paris School of Economics. He pioneered the introduction of subjective well-being in econom- ics in the early 1990s, and its use for the analysis of contextual effects. He has more than 30,000 citations on Google Scholar, and nine papers cited more than 1000 times each. He was among the ‘Highly Cited Researchers 2018’—the list that recognizes world-class researchers selected for their performance, demonstrated by production of multiple highly cited papers that rank in the top 1 per cent by citations for field and year in the Web of Science. Andrej Cupak works as a data expert and research associate at the LIS Cross-National Data Center in Luxembourg. He is also affiliated with the National Bank of Slovakia. His research interests include household consumption and financial behaviour, human capital, income and wealth inequality, survey data, and applied microeconomics more generally. Conchita D’Ambrosio is a professor of economics at the Department of Behavioural and Cognitive Sciences, University of Luxembourg. Her research interests revolve around the analysis and measurement of individual well-being, both theoretically and empirically. In this respect, she has proposed a number of different axiomatically characterized well-being indices, including measures of social exclusion and of poverty over time, that disentangle the effects of chronic and persistent poverty. She has also worked on the empirical analysis of these indices using data from a variety of different countries. She has published widely in the fields of social-index numbers and income distribution. Hai-Anh H. Dang is an economist in the Analytics and Tools Unit, Development Data Group, World Bank. His main research is on international development, poverty, inequality, human development topics, and methodology to construct synthetic (pseudo) panel data from cross-sections. He has published in various development journals, including Economic Development and Cultural Change , Journal of Development Economics , Journal of Development Studies , World Bank Economic Review , World Development , and has chapters OUP CORRECTED PROOF – FINAL, 04/02/21, SPi xviii Notes on Contributors in books published by leading academic publishers. He also serves as a co-editor of Review of Development Economics , and on the editorial boards of other journals. James Davies is a professor of economics in the Department of Economics, University of Western Ontario in London, Canada. His field is public economics and his research has ranged over many topics, from tax policy to inequality measurement. In recent years he has focused on policy to mitigate the economic impacts of climate change and natural dis- asters, and on the global distribution of personal wealth. Carlos Gradín is a research fellow at the United Nations University World Institute for Development Economics Research (UNU-WIDER) in Helsinki, and a professor of applied economics at the University of Vigo (on leave of absence). His main research interest is the study of poverty, inequality, and discrimination in both developed and developing countries, especially inequalities between population groups (i.e. by gender, race, or ethnicity). His research deals with enhancing the empirical evidence as well as methodological tools for the measurement and understanding of those issues. His research has been widely published in international journals. Pippa Green is a South African journalist and writer. She has served as deputy editor for a number of South African newspapers, as head of Radio News at the South African public broadcaster, and as a visiting professor of journalism at Princeton University. She is South Africa’s Press Ombudsman and before this worked in SALDRU, editing and writing on employment, inequality, and inclusive growth in South Africa. Peter Lanjouw is a professor at the School of Business and Economics, VU University Amsterdam. His research focuses on the measurement of poverty and inequality as well as the analysis of rural development, notably via the study of a village economy in rural India and the broader process of rural non-farm diversification. He has co-authored several books and has also published in such leading economics journals as Econometrica and the Economic Journal , as well as numerous field journals. He is currently editor of the World Bank Research Observer. Murray Leibbrandt holds the National Research Foundation Chair in Poverty and Inequality Research at the University of Cape Town and is a senior research fellow of UNU-WIDER. He is the director of the Southern Africa Labour and Development Research Unit and the African Centre of Excellence for Inequality Research. He has pub- lished widely in development economics using survey data and especially panel data to analyse South Africa’s poverty, inequality, and labour-market dynamics. Shi Li is a professor of economics at Zhejiang University, director of the China Institute for Income Distribution at Beijing Normal University, non-resident senior research fellow at UNU-WIDER, and a research fellow at IZA. His research focuses on income and wealth distribution, poverty, labour markets, and rural migration and the labour market in China. He has published in journals such as Review of Income and Wealth , Oxford Bulletin of Economics and Statistics , Economic Development and Cultural Change , and Journal of Development Economics. His publications include several edited volumes, including Rising Inequality in China (with H. Sato and T. Sicular, Cambridge University Press 2013). Nora Lustig is Samuel Z. Stone Professor of Latin American Economics and the founding director of the Commitment to Equity Institute (CEQ) at Tulane University. She is also a OUP CORRECTED PROOF – FINAL, 04/02/21, SPi Notes on Contributors xix non-resident senior fellow at the Brookings Institution, the Center for Global Development, and the Inter-American Dialogue. Her research on economic development, inequality, and social policies has been published across more than sixty articles, close to ninety chapters, and twenty-five books and edited volumes. Professor Lustig is a founding member and President Emeritus of the Latin American and Caribbean Economic Association (LACEA) and serves on the editorial board of the Journal of Economic Inequality . She received her doctorate in economics from the University of California, Berkeley. Teresa Munzi is the director of operations at the LIS Cross-National Data Center in Luxembourg, where she is responsible for managing and overseeing all operations in the LIS office. Her research interests include the comparative study of welfare systems and their impact on poverty, inequality, and family wellbeing; and gender differences in employment and earnings. Ambar Narayan is a lead economist in the Poverty & Equity Global Practice of the World Bank. He leads and advises teams conducting policy analysis, evaluations, and research in development from a microeconomic perspective, and has published research papers and policy briefs on issues that reflect the eclectic mix of topics on which he has worked over the years. He has been a lead author for large World Bank studies, including a recent global report on intergenerational mobility, and regional or country reports on inequality of opportunity, poverty, and the impact of economic shocks. He has a PhD in economics from Brown University in the United States. Marcelo Neri is director of FGV Social at the Getulio Vargas Foundation (FGV). He holds a PhD in economics, Princeton University. Previously he was the secretary-general of the Council of Economic and Social Development (CDES), president of the Institute for Applied Economic Research (Ipea), and Minister of Strategic Affairs in Brazil. He has evaluated policies in more than a dozen countries and also designed and implemented policies at three government levels in Brazil. Neri’s research focuses on social policies, microeconometrics, and well-being. He teaches graduate and undergraduate courses at EPGE/FGV, writes regularly in scientific journals, and has published ten books. Vimal Ranchhod is a professor at the School of Economics and the Deputy Director of the Southern Africa Labour and Development Research Unit. He is a labour economist who has published widely on labour markets, education, and poverty and inequality. Martin Ravallion currently holds the inaugural Edmond D. Villani Chair of Economics at Georgetown University. Prior to joining Georgetown in 2013 he was director of the World Bank’s research department, the Development Research Group. Martin’s main research interests over the past thirty years have concerned poverty and policies for fighting it. He has published extensively on this topic and advised numerous governments and international agencies. John Scott is a professor-researcher at the Economics Department at the Centro de Investigación y Docencia Económicas (CIDE) in Mexico City, and academic researcher at the Consejo Nacional de Evaluación de la Política de Desarrollo Social (CONEVAL), a public institution responsible for poverty measurement and the evaluation of social pro- grammes in Mexico. He has a BA in philosophy from NYU and an M.Phil in economics