By Donella Meadows
–July 6, 1989–
The 1989 World Bank Development Report came out last month, an event that created excitement nowhere except in the hearts of statistics freaks like me. No sooner had my copy arrived than I turned to my favorite table — Table 30, Income Distribution. I like to keep up with how the top 10 percent lives.
To my disappointment the numbers were exactly the same as last year’s, not because the world hasn’t changed, but because the World Bank, once again, hasn’t updated that table. The numbers in Table 30 are interesting, fascinating even, but many of them are now at least ten years old.
That in itself is worth noting. The world’s keepers of economic statistics chart with eager concern the total amounts of money that flow around the world, the rate at which those flows increase, and what countries owe how much to whom. But they seem uninterested in who ultimately gets it, in how equitably income is distributed on its way to what is presumably its purpose — the enhancement of human welfare. (That IS its purpose, isn’t it?)
I don’t see how they can be uninterested. Even with old numbers, even with only 46 out of 120 countries reporting, Table 30 contains dynamite information.
It says, for example, that in the United States the richest 10 percent of households get to spend more money than the poorest 40 percent all together — the top 10 percent get a 23.3 percent share of national income; the bottom 40 percent get 17.2 percent. Those are 1980 statistics — the distribution has swung further toward the rich since then, but the World Bank hasn’t seen fit to note that yet.
In Japan in the latest year listed (1979) the richest 10 percent got almost exactly as much of the pie as the poorest 40 percent: 22.4 percent to 21.9 percent, respectively.
If you think that’s unfair, consider Zambia (in 1976), where the richest 10 percent got 46 percent of the income stream and the poorest 40 percent got only 11 percent. Then there’s Brazil, the World Inequity Champion (among the countries for which there are any statistics at all). In Brazil in 1972 (why no update since then?) the richest ten percent garnered 51 percent of the national income, the poorest 40 percent got by somehow on just seven percent.
UNICEF also puts out an annual report, called The State of the World’s Children. It focuses firmly on the actual welfare of people, especially young people, who in every country live disproportionately at the bottom 40 percent of the barrel. UNICEF suggests that countries should be ranked not by average GNP per capita, but by the average income of the lowest 40 percent. According to the World Bank’s Table 30, that would change national rankings considerably.
Kenya, for example, has an average GNP per capita double that of Bangladesh. But the poorest 40 percent of Kenya’s people get only 8.9 percent of the national income, whereas the poorest 40 percent in Bangladesh get a 17.3 percent share. That means there is no difference in the actual income levels of the poor in the two countries — they are both at about $65 per household per year, the lowest of all the reporting countries.
Mexico and Hungary fall close together in a GNP per capita ranking, each at about $2000 per person. But the average income of Mexico’s poorest 40 percent is only about half that of Hungary’s ($515 and $994 respectively).
The United States ranks higher than Japan in average income per person ($18,530 to $15,760), but lower in the average income of the bottom 40 percent. (Japanese families in the bottom 40 percent average $9022; U.S. families only $7967.)
All these numbers have to do with distribution of income within nations. What if we looked at the income distribution across nations? How is the pie shared over the whole world? What proportion do the world’s upper 10 percent get?
We have no way of knowing. Only 46 of 120 nations are reporting. The World Bank does not tabulate income distribution worldwide.
Why not? Why do the world’s statisticians know so much about total money flows and so little about money distribution? Why is Table 30 never complete or current?
The only explanation I can come up with is that the people in the world’s upper ten percent (including every economist at the World Bank and most of us in this country) really don’t want to know.
Copyright Sustainability Institute 1989