1050X300 MS inequality 1101

How Inequality Found a Political Voice

Author(s): Michael Spence

Date: Nov 1, 2016

Theme(s): Finance & Macroeconomics

Publications: Opinions & Speeches

Academic Council Chairman Michael Spence writes on why it took politics so long to catch up with economic reality.

It took a long time for widening inequality to have an impact on politics, as it suddenly has done in recent years. Now that it is a central issue, national economic priorities will need to shift substantially to create more equitable, inclusive economies and societies. If they do not, people could embrace explosive alternatives to their current governments, such as the populist movements now sweeping many countries.

Political leaders often speak of growth patterns that unfairly distribute the benefits of growth; but then they do relatively little about it when they are in power. When countries go down the path of non-inclusive growth patterns, it usually results in disrespect for expertise, disillusionment with the political system and shared cultural values, and even greater social fragmentation and polarization.

Acknowledging the importance of how economic benefits are distributed is of course not new. In developing countries, economic exclusion and extreme inequality have always been unconducive to long-term high-growth patterns. Under these conditions, pro-growth policies are politically unsustainable, and they are ultimately disrupted by political dislocations, social unrest, or even violence.

 

This article first appeared in Project Syndicate on October 28, 2016. Please click on the link to access the entire article.

The views expressed in the reports featured are the author’s own and do not necessarily reflect Asia Global Institute’s editorial policy.