Global Inequalities Do Exist… But We Are Getting Better At Reducing Them

New Inequality of Human Progress Index (IHPI) reveals a promising global decline in inequality, states Cato Institute Policy Analyst and Managing Editor of Chelsea Follett, alongside Assistant Professor of Economics at George Mason University Vincent Geloso.

Global Inequalities Do Exist… But We Are Getting Better At Reducing Them

Over the past few decades, the world has experienced remarkable advancements in various aspects of human development. However, the extent to which these gains have been shared broadly remains a critical question. Addressing this concern, the recently unveiled Inequality of Human Progress Index (IHPI) offers a comprehensive evaluation of global development disparities. Unlike previous indices, the IHPI goes beyond income inequality, encompassing a broader spectrum of dimensions to gauge relative disparities in international progress.

By adopting a multidimensional approach to inequality analysis, the IHPI recognizes the significance of various factors. It takes into account material well-being, as well as seven additional metrics: lifespan, infant mortality, adequate nutrition, environmental safety, access to educational opportunities, availability of information through the internet, and political freedom. Remarkably, the world has witnessed increased equality across all but two of these dimensions since 1990.

The progress can be attributed to globalization and the liberalization of markets, which have not only elevated living standards but also contributed to a reduction in overall inequality. This comprehensive assessment underscores the significance of addressing inequality beyond economic aspects, recognizing the interconnectedness of various dimensions of human progress.

Follett and Geloso note: “The latter may be the result of the environmental Kuznets Curve, which stipulates that pollution increases with economic growth until a critical point is reached, after which pollution starts to fall. In our case, the rising inequality in outdoor air pollution may reflect that some countries are undergoing this transition. The trend in infant mortality may reflect that child mortality has not fallen as fast (proportionally) in low-income countries as in high-income countries since 1990.”

Beyond Income Inequality

The Inequality of Human Progress Index (IHPI) surveys international inequality across a greater number of dimensions than any prior index. Using data from 1990 to 2018, the IHPI measures relative gaps in global development across eight distinct dimensions: lifespan, childhood survival (infant mortality rates), nutrition, environmental quality (outdoor air pollution death rates), education, internet access, income, and political freedom (democracy versus autocracy over time).

And that is because focusing solely on income inequality when assessing the state of the world provides only a limited understanding of global progress. To gain a more comprehensive perspective, it is essential to measure the multidimensional evolution of inequality in human progress.

By considering various dimensions such as lifespan, infant mortality, nutrition, environmental safety, education, access to information, and political freedom, a fuller picture of global development disparities emerges. This broader approach recognizes that progress extends beyond financial aspects and acknowledges the interconnectedness of different facets of human well-being. By adopting a multidimensional framework, it is possible to gain a deeper understanding of the state of the world and effectively address the complex challenges of inequality.

The authors conclude, “Because of its greater multidimensionality, the IHPI provides a more meaningful understanding of well-being and progress, as well as their distribution. Our index makes clear not only that the world is better off than many people appreciate, but that the world is also far more equal.”