Why Inequality Matters in a Globalizing World

Nancy Birdsall

The Center for Global Development

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In this 2005 WIDER Annual Lecture, CGD President Nancy Birdsall addresses the challenge that global inequality poses for managing and civilizing globalization so that it works for the developing world. She first argues that money inequality matters to people. Moreover, in developing countries, where markets and politics are by definition far-from-perfect, inequality is likely to be destructive, reducing prospects for growth, poverty reduction, and good government. She then turns to a fundamental problem of globalization--that it is asymmetric, i.e. that it benefits the rich more than the poor, both within and across countries. Birdsall argues that the world is not "flat," as New York Times columnist Thomas Friedman has suggested. Rather, what appears to be a level playing field to people on the surface is actually a field of craters in which other people are stuck--and hard to see. Birdsall discusses the implications of these craters for global security, stability, shared prosperity, and global social justice. She concludes by suggesting steps for addressing the core problem: we have a global economy but no effective global polity.

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In the article, Rising Inequality in the New Global Economy, Nancy Birdsall argues that globalization is dis-equalizing, rewarding the already rich while leaving the poor behind, and that we need a 'global polity' to address the asymmetric impacts of globablization.

Download slides from the lecture, "Why Inequality Matters in a Globalizing World" (PDF, 580KB), delivered Oct. 26, 2005 at the United Nations University's World Institute for Development Economic Research (WIDER) in Helsinki Finland.

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The lecture draws upon the following previously released CGD publications:

Commodity Dependence, Trade and Growth: When Openness Is Not Enough
Economic Policy and Wage Differentials in Latin America
Give Us Your Best and Brightest. The Global Hunt for Talent and Its Impact on the Developing World

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http://www.cgdev.org/content/opinion/detail/4793/