Work in Progress Do Not Distribute to Be Quoted Only with Author’s Permission [due to the Size of the Document, It Is Suggested to Print It Double-sided] Worlds Apart: Inter-national and World Inequality 1950-2000

The book defines three different concepts of world or inter-national inequality. The first uses unweighted countries’ GDPs per capita, the second, populationweighted GDPs per capita, the third, combines inter-national and internal income distribution to derive “true” world income distribution. According to the first and the second concept, inter-national inequality respectively increased and decreased over the last 50 years. The increase in unweighted inter-national inequality reflects divergence in countries’ growth rates particularly during the last twenty years during which most of Latin American, East European, and African countries either stagnated or declined. The decline in population-weighted inter-national inequality is entirely driven by China’s fast growth during the last two decades. The third concept, world inequality, is based on incomes or expenditures calculated from household surveys and is consequently available for a much shorter time period. Over the period 1988-93, it shows an important increase in inequality caused by slower growth of rural incomes in populous Asian countries compared to the rich OECD countries, as well as by rising urban-rural income differences in China, and by declining income in transition countries.