11/13/2017 Inequality and Shared Prosperity Overview

Understanding Poverty (/en/understanding-poverty)

In qu lit nd Sh r d Prosp rit

Th World B nk is workin to promot sh r d prosp rit in th 140-plus cli nt countri s w s rv . It m ns th t w will work to
incr s th incom s nd w lf r of th l ss w ll off wh r v r th r , b it th poor st of n tions or in thrivin , middl -incom
countri s.

INEQUALITY AND SHARED PROSPERITY HOME (/EN/TOPIC/ISP) OVERVIEW

Ov rvi w

CONTEXT

STRATEGY

RESULTS

The World Bank Group has two clear goals (http://www.worldbank.org/en/news/feature/2013/05/08/shared-prosperity-goal-

for-changing-world): to end extreme poverty (http://www.worldbank.org/poverty) globally and to boost shared prosperity in
every country. Promoting shared prosperity means that we will work to increase the incomes and welfare of the poorer
segments of society wherever they are, be it the poorest of nations or thriving, middle- or high-income countries. This
indicator departs from the traditional focus on growth of average income of the population – an approach that implicitly
assumes that economic growth automatically trickles down to the poor.

The latest data shows (http://www.worldbank.org/PSP) that in 60 of the 83 countries studied, the bottom 40 percent of the
income distribution experienced positive income growth between 2008 and 2013, representing 67 percent of the world’s
population. In 49 countries, the income growth of the bottom 40 exceeded that of the top 60. East Asia and Paci c and Latin
America and Caribbean tended to perform better, but, there was large variance, especially in Europe and Central Asia and
among industrial countries.

The shared prosperity goal re ects the fact that as developing countries grow their economies and lift millions out of poverty,
they may also experience growing inequality. We now know that nations with a widening gap between those who can and
cannot access opportunities in life have di culty sustaining economic growth and social stability over time. To date, no
country has managed to transition beyond a middle-income status while maintaining high levels of inequality.

Given current and projected growth patterns, inequality can play an important role both in ending extreme poverty by 2030
and in ensuring that growth works for the poorest. Inequality between all people in the world has declined since 1990, and
although within-country inequality is still higher today than 25 years ago, in the last number of years, for every country in
which inequality widened, there were two countries in which inequality narrowed.

In far too many places, however, inequality remains unacceptably high, and the increasing share of income going to the top 1
percent of earners is of great concern. A stronger focus on faster inequality reduction, especially in countries with high
inequality and a large number of poor people, will further enhance the power of economic growth to translate into poverty
reduction and better opportunities for all. 

Last Updated: Oct 02,2016

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11/13/2017 Inequality and Shared Prosperity Overview

RELATED
Poverty and Shared Prosperity 2016: Take on Inequality (http://www.worldbank.org/en/publication/poverty-and-shared-prosperity)

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Find out what the Bank Group's branches are doing on Inequality and Shared Prosperity.

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PHOTO GALLERY

VIDEO OCT 02,2016

(http://www. ickr.com/photos/worldbank/2228672727/in%2Fset-
(http://www. ickr.com/photos/worldbank/4248381369/in%2Fset-
(http://www. ickr.com/photos/worldbank/1117708714/in%2Fset-
(http://www. ickr.com/photos/worl
To End Extr m Pov rt b 2030, W N d to T ckl In qu lit 72157630502568422%2F)
72157630502568422%2F) 72157630502568422%2F) 72157630502568422%2F)
(http://www.worldb nk.or / n/n ws/vid o/2016/10/02/to- nd- xtr m -pov rt -b -2030-w -n d-to-t ckl -in qu lit )

(http://www. ickr.com/photos/worldbank/4724936900/in%2Fset-
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(http://www. ickr.com/photos/worldbank/7556689742/in%2Fset-
(http://www. ickr.com/photos/worl
72157630502568422%2F) 72157630502568422%2F) 72157630502568422%2F) 72157630502568422%2F)

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Poverty & Equity Data (http://povertydata.worldbank.org/poverty/home/)

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LAC Equity Lab (http://www.worldbank.org/en/topic/poverty/lac-equity-lab1/overview)

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