And yet it Moves: The Agenda against Inequalities in the G7 and G20
| Date | 01 May 2019 |
| Author | Simone Martelli,Lawrence Bartolomucci |
| Published date | 01 May 2019 |
| DOI | http://doi.org/10.1111/1758-5899.12651 |
And yet it Moves: The Agenda against
Inequalities in the G7 and G20
Simone Martelli and Lawrence Bartolomucci
Italian Ministry of Economy and Finance
Abstract
Over the last years, inequality has climbed on top of the political agenda both in the G7 and G20, also as a response to the
wide discontent against governments’policies. However, discussions have developed along significantly different patterns. On
one hand, the G7 managed to develop a joint understanding on the main drivers and on the domestic and global policies to
tackle the multiple dimensions of inequality, with no country-specific commitment. On the other hand, G20 countries have
taken up domestic policy commitments for greater inclusiveness, but they did not accomplish agreement on any common
framework. Indeed, works can be further developed in both fora; however, the development of a multilateral policy-oriented
framework on inequalities and inclusiveness in the G20 appears more pressing. Looking also at the G7 experience, this would
require putting inclusive growth on top of the G20 Presidencies’work plans, ensure a stronger political engagement by all
members and tackle some of the persistent flaws in the G20 governance.
Uneven growth across social classes and perceived insecu-
rity in different aspects of life have raised popular dissatis-
faction, pushing for an expansion of the welfare state and a
restriction of economic and migration openness, mainly
through the upsurge of populist parties in developed coun-
tries.
1
Indeed, inequality has become a pressing policy chal-
lenge of our time.
This should not be seen only as a legacy of the great
recession. Even before the financial crisis, concerns were
growing about the neo-liberal model, where higher growth
can go hand in hand with inequality. Yet, The Economist,in
mid-2006, listed three conditions for inequality to be accept-
able: overall sustained economic growth, social mobility and
a functioning social safety net (The Economist, 2006). The
great recession put all of them under strain: income fell,
opportunities to climb the social ladder blurred and public
finances slimmed down both in advanced and developing
countries.
This paper studies recent developments of global policy
making against inequality, and its prospects. This is based
on the approach of Martelli et al. (2018), which shows the
need to build a common understanding on inequality,
between countries and policy fields. To this end, the authors
advanced a common framework on inequalities, combining
its different dimensions, the international and domestic dri-
vers, and the policies to tackle them, based on the analysis
of economic literature and empirical data. This could even-
tually support a better coordination in policy making, both
domestically and internationally. In the following, we first
set the background, summarizing main trends on inequality
and related policies. Second, we comment recent advance-
ments on G7 coordination to tackle inequalities, as a group
of reasonably similar countries. Third, we analyse the latest
progress at the G20 level. We conclude by identifying key
steps to mainstream the discussion on inequalities at the
international level.
Even if there seems to be a consensus that within-country
income inequality has risen substantially, notably in most
wealthy economies
2
(Alvaredo et al., 2017; Atkinson, 2015; Bour-
guignon, 2015; Milanovic, 2016; Piketty, 2014), data gaps, lack of
data harmonization and differences in the definition of inequal-
ity indexes may lead to different (and possibly biased) conclu-
sions (Ferreira and Lustig, 2015), ultimately preventing the
formation of a shared understanding on the different dimen-
sions of inequality and a coherent approach to tackling them.
3
The concept of hidden inequality emerges from the eco-
nomic theory on inequality (Cobham et al., 2016a, 2016b;
Schutz, 1951). This is the component of inequality which is
not captured by current measures and datasets and it
results in being the main driver of the multiplicity of mes-
sages on inequality trends and rankings. Hidden areas of
inequality are related to both measurement errors of well-
established inequality indexes (i.e. misreporting of income
data) and additional dimensions of inequality which are not
measured (i.e. opportunities).
Among economic dimensions, wealth inequality is a sig-
nificant element of hidden inequality, while multiple non-
economic dimensions of well-being range from labour mar-
ket conditions to education, health, pensions, public budget
composition, housing, safety, environmental quality, civic
engagement and overall life satisfaction.
4
In this regard, it is
appropriate to refer to ‘hidden inequalities’.
Overall, inequality of opportunities is the crucial element
of hidden inequalities. It cannot be measured per se, but it
is the single element precluding social mobility. Economic
and non-economic dimensions of inequality are all intertwined
with inequality of opportunities as causes, consequences, or
even as part of it.
©2019 University of Durham and John Wiley & Sons, Ltd. Global Policy (2019) 10:2 doi: 10.1111/1758-5899.12651
Global Policy Volume 10 . Issue 2 . May 2019
274
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