National and Global Inequality
Recent AfricaFocus Bulletins | More on illicit financial flows and tax justice
Social and economic inequality results from the intersection of different
dimensions of inequality, including not only strictly economic forces
but also inherited disadvantages and current discrimination along multiple other axes: race, gender,
sexual orientation, disability status, and more. This reality has
been theorized in the concept of "intersectionality,"
made prominent by feminist critical race scholars such as Kimberlé
Williams Crenshaw. Yet one of the fundamental aspects of inequality
often missed is that based on geography. High levels of inequality
are found within cities, between urban and rural areas, and between
states or regions within a single country.
financial flows, in particular, are closely linked to inequalities
within countries and, most strikingly, to inequalities between
countries. These two intersect to form "global inequality."
And they are in turn intertwined with all the other dimensions of
inequality cited by intersectional theorists.
There is abundant
documentation of the stark inequalities within the United States, and
new data is coming out all the time. In December 2015, the Institute
for Policy Studies released a new report,
Bonanza," comparing different
sectors of the US population in terms of their wealth. Among the
wealthiest people now own more wealth than the entire bottom half of
the American population, a total of 152 million people in 57 million
The wealthiest 100
households now own about as much wealth as the entire African
American population in the United States.
The wealthiest 186
members of the Forbes 400 own as much wealth as the entire US Latino
The same month, Pew
Research Center released statistics
on changes in household income between 1971 and 2015.
from this data shows households with
annual earnings of $200,000 or more moving from a small share of the
total to the largest single share, easily outstripping all other
income segments. The share of total income going to people in the
middle income range has been going down, while the share going to the
top 1% keeps going up. As is often noted, these trends are
fundamentally reshaping the electoral landscape through the powerful
and growing influence of money in politics.
It is also increasingly
recognized that income inequalities reflect not only the inequalities
of economic class but also those of race, gender, ethnicity,
immigrant status, and other human characteristics that can be used to
shape privilege and vulnerability. How these different forces
interact and what to do about them is intensely contested in both
scholarly and political arenas. Less noted is how they interact with
"place," and particularly with the divisions between
countries at the global level.
Yet "big data"
is also revealing a global pattern of inequality that is even more
extreme than the inequality within any one country. One of the most
insightful analysts of this reality is Branko Milanovic. His latest
Inequality, both shows the dramatic rise
of the global 1% in the last 20 years and traces variations in
patterns of change within countries and between countries. While the
middle classes in China and India are rising, inequality remains high
and is even growing within countries, including rich countries in
North America and Western Europe, new emerging powers such as China
and Brazil, and oil-rich kleptocracies in the Middle East and Africa.
Gini index of incomes, which measures
inequality on a scale from 0 (perfect equality) to 100 (perfect
inequality), ranges from over 60 in South Africa to the low 50s in
Brazil and Guatemala, the low 40s in China and the United States, and
under 30 in the most egalitarian European countries such as Sweden
But inequality between
countries also means that people in different countries have
different chances to be at the top of the global heap. Thus 12% of
Americans are in the top 1% globally, while only the very wealthiest
1% of Russians, Brazilians, and South Africans make into the global
top 1%. Africa, despite rising average growth rates and its own crop
of millionaires and billionaires in many countries, remains on
average the most disadvantaged continent in the global distribution
of income. The "citizenship premium" means that average
income in the top 10% in an African country is far below average
income in the top 10% in the United States or another rich country.
So too, Africans in the bottom 10% of their countries' income
distributions are far worse off, on average, than people in the bottom
10% in rich countries. The disparities purely from the accident of
birth are staggering.
As can be seen in the
table below, calculated from Milanovic's
data, if one compares selected African
countries to the United States, the average income per person in the
United States of $23,133 in the period just before 2010 was more than
seven times the average income in South Africa. It was almost 25
times the average income in Ghana, and almost 50 times that in
Nigeria. The average income of even the bottom 10% in the United
States was slightly more than the average income in South Africa as a
whole, and far greater than average income in other African
countries. While the exact numbers may be contested, based as they
are on household surveys and referring only to cash income, there can
be no doubt that these contrasts are striking.
(in 2005 US$)
Ratio USA Mean
to Country Mean
Ratio Mean of
Bottom 10% in USA to Country Mean
Lowest income 10%
in USA (if it were a country)
Source and notes:
Calculated from data downloaded from the World
Income Distribution (WYD) dataset 1988-2008.
For a Google spreadsheet including a wider selection of countries
from the database, click
Most recent bulletins on illicit financial flows and tax justice
June 8, 2020 Africa/Global: Thinking Post-Covid-19
“Calls for debt relief—or more timid debt service moratorium—are
drops in the ocean. Something much more ambitious and radical
should be envisaged. This crisis allows us to think big. … [F]or
these exceptional times, we need exceptional solutions. This virus
does offer Africa an opportunity to exercise agency and embark on a
more robust structural transformation process. Building on the
gains of the last few years and the resilience of its population,
there will probably be no better time to fast-track change.” -
Carlos Lopes, former Executive Secretary of the United Nations
Economic Commission for Africa
February 24, 2020 USA/Global: National and Global Inequalities Are Intertwined
The recession that began in 2008 brought new life to the public debate on class and racial inequality in the United States. The #OccupyWallStreet demonstrations in 2011 may have left no institutional legacy, but they shined a spotlight on a yawning wealth gap and the role of the “one percent.” #BlackLivesMatter and related movements challenged complacency on entrenched racism … Public awareness of inequality, like awareness of climate change, was rising even before President Trump took office. But his administration’s sharp turn toward denial and regression on both issues has spurred active opposition and cut into the complacency of conventional Democratic Party politics.
October 9, 2019 Africa/Global: Targeting Corporate Shell Games
“Across the world, citizens who want their governments to implement
policies to reduce inequalities, address climate change and looming
ecological disaster, provide better public services and amenities,
ensure social protection, generate quality employment and so on,
are always confronted with one question: where is the money? We are
constantly told that governments cannot afford the necessary
expenditure; that running fiscal deficits will lead to financial
chaos and crisis; and that raising taxes will simply drive away
investment. But this is not just misleading; it is simply wrong.
Governments are constrained in their resources because they tolerate widespread tax evasion and avoidance. ” - Professor Jayati
Ghosh, Jawaharlal Nehru University
August 12, 2019 Africa/Global: Tax Avoidance 101
Aircastle Ltd., a Connecticut-based global company specialized in
leasing airplanes, is not alone among large American companies
lowering their taxes through creative accounting, which also
include well-known giants such as Amazon and Apple.
But the recent revelations on Aircastle´s use of Mauritius as a
tax haven provide a helpful window into how such tax dodges can
make use of off-shore companies set up primarily for that purpose.
August 12, 2019 Africa/Global: #MauritiusLeaks Reveals Tax Dodges
“Based on a cache of 200,000 confidential records from the
Mauritius office of the Bermuda-based offshore law firm Conyers
Dill & Pearman, the investigation reveals how a sophisticated
financial system based on the island is designed to divert tax
revenue from poor nations back to the coffers of Western
corporations and African oligarchs, with Mauritius getting a share.
The files date from the early 1990s to 2017.” - International
Consortium of Investigative Journalists
April 30, 2019 Africa/Global: Fighting Tax Evasion and Tax Avoidance
The UN Economic Commission for Africa (ECA), in its annual
Economic Report on Africa, focused on financing development in
Africa, highlighted the urgency to curb what it termed “revenue
leaks” through tax evasion and tax avoidance, as well as through
misguided government policies. Multinational corporations, corrupt
officials, and financial intermediaries around the world siphon
off African wealth, leaving national budgets starved for resources
to invest in health, education, and sustainable economic growth.
January 8, 2019 Mozambique/Global: Who Pays for Transnational Corruption?
The line-up of those involved in this $2.2 billion fraudulent loan deal, now
implicated in a case in the U.S. District Court of the Eastern District of New York,
is multinational. The five named individuals indicted include the former Minister of
Finance of Mozambique, a Lebanese businessman representing Privinvest (an
international shipping conglomerate in Abu Dhabi), and three London-based bankers,
citizens of New Zealand, Great Britain, and Bulgaria, employed at the time of the
loans by the giant Swiss bank Credit Suisse. Three more names are redacted in the
indictment and 5 others, three Mozambicans and two additional employees of
Privinvest, are cited but not named in the text of the indictment.
November 12, 2018 Africa: Africa Mining Vision
The Africa Mining Vision (AMV) was adopted by Heads of State at the February 2009
African Union summit following the October 2008 meeting of African Ministers
responsible for Mineral Resources Development. An action plan was adopted in December
2011, and the African Minerals Development Centre (https://www.uneca.org/amdc)
launched in December 2013. The lead role in developing the vision was taken by
African professional staff at the United Nations Economic Commission for Africa
(UNECA), in consultation not only with African governments but also with civil
society organizations and specialists on the mining sector.
November 12, 2018 Africa: Why Mining is Hard to Tax
"In Africa as elsewhere in the world, while energy companies might be somewhat undertaxed,
mining companies typically are greatly under-taxed. Indeed, it is only a
slight exaggeration to say that, with a few significant exceptions, notably
Botswana’s diamond mines, mining in Africa is barely taxed at all. One reliable
source indicates that contemporary African governments collect about 55% of the total
value of energy production in tax revenue, but only 3% of the value of mining
production." - Taxing Africa
October 16, 2018 Africa/Global: Drug Company Profits vs. Public Health
"Oxfam examined publicly available data on subsidiaries of four of the largest US
drug companies and found a striking pattern. In the countries analyzed that have
standard corporate tax rates, rich or poor, the corporations’ pretax profits were
low. In eight advanced economies, drug company profits averaged 7 percent, while in
seven developing countries they averaged 5 percent. Yet globally, these corporations
reported annual global profits of up to 30 percent. So where were the high profits?
Tax havens. In four countries that charge low or no corporate tax rates, these
companies posted skyrocketing 31 percent profit margins." - Oxfam, September 2018
October 1, 2018 Africa/Global: Professionals Enabling Corruption
"Lifting the veil of corporate secrecy reveals a simple principle: Offshore is
actually a set of professional services that specialize in enabling businesses and
individuals to effectively retreat from legal, regulatory, and public scrutiny,
empowering them vis-a-vis those who have remained 'onshore' without access to such
services." - Hudson Institute
June 4, 2018 West Africa/Global: Tax Evasion without Borders
"On paper, the company that engineered and built the [$50 million mineral sands]
processing plant [in Senegal] was SNC Lavalin-Mauritius Ltd, a local division of SNC
Lavalin [Canada]. In reality, SNC Lavalin-Mauritius wasn’t involved. It was a shell,
created for the specific purpose of helping the engineering giant avoid tax payments.
The company had no construction equipment and no office of its own. It operated from
inside the Mauritius office of the offshoring law firm Appleby, which helped SNCLavalin
create the shell company." - West Africa Leaks