Commitment to Reducing Inequality Index

Syllabus: GS3/Inclusive Growth

Context

• The Index is published by international non-governmental organisation Oxfam and Development Finance International (DFI), measuring 164 countries’ commitment to reducing inequality. 

About

• The fifth edition of the index ranked countries on their policies regarding public services spending (education, health and social protection), progressive taxation, and labour rights and wages .

Major Highlights

• Nine out of ten countries are implementing policies and actions likely to increase economic inequality.
• Major Cuts: 84 percent of countries have cut investment in education, health and social protection, 81 percent weakened their tax systems’ ability to reduce inequality, and in 90 percent of them, labour rights and minimum wages have worsened.
• The top performers: These are all high-income countries, led by Norway, Canada, Australia, Germany and Finland.
  • Labour policies: These countries start from much lower wage inequality. 
  • They have high social spending and collect more tax revenue. 
• Belarus, Costa Rica and South Africa are at the best-performing among the low- and middle-income countries. 
• The worst performers: They are low- and lower middle-income countries, all situated in sub-Saharan Africa (South Sudan, Nigeria, Zimbabwe, Uganda, Central African Republic, Liberia, Sierra Leone and Burundi). 

• Recommendations: 
  • Develop clear national time bound plans to reduce inequality.
  • Prioritize public spending on essential public services such as education, healthcare and social protection.
  • Increase progressive taxation by taxing the income of the richest 1%.
  • Intervene in the labour market to protect all workers.
  • Develop gender-responsive policies to recognize, reduce and redistribute unpaid care work and ensure that paid care workers are represented and rewarded justly. 

Source: DTE