Presentation by Marek Dabrowski (Professor of the Higher School of Economics (Moscow); Non-Resident Scholar at Bruegel (Brussels)

1. Marek Dabrowski
Inequalities in a globalized
economy (few remarks)
Presentation at the Dialog on Inequalities organized by the UNDP
RBEC, Istanbul Regional Hub, Istanbul, January 21, 2015

2. Various perspectives on
inequalities
• Intra-country (traditional) very much
determined by national debates, including
political ones
• Cross-country (global or regional)
– between countries
– within the entire population

3. The current mainstream
economic debate:
• Determined by the situation in individual high-
income economies
• Crisis of a traditional welfare state:
– original inefficiencies
– consequences of population aging
– consequences of globalization

4. Consequences of international division of
labor for high- and upper-middle income
economies
• Moving of many middle-income jobs in manufacturing and
services to emerging-market economies
• Limits on wage increase in tradable goods of services
• ‘Headquarter’ effect of multinational corporation
• Development of both sophisticated (high-paid) and labor-
intensive (low-paid) services

5. Consequences of globalization for emerging-
market and developing economies
• Rapid growth, decreasing poverty
• Mixed impact on income inequalities
• Controversy around Kuznets hypothesis
• Not all countries involved: various economic and
political systems, consequence of conflicts, etc.
• Inequality vs. structural characteristics of
individual economies
5

6. Inequality of what?
• Inequality of outcomes (income inequality)
• Inequality of opportunities (social and cultural
factors, education, health)
– progress in certain areas (education, health, gender
equality)
– continuous conflicts
– increasing exclusion in other areas (immigration
policies in developed countries, including attitude to
refugees)

7. Situation in the RBEC region
• Progress in fighting poverty and inequality the second
decade of transition – how sustainable?
• Decreasing extreme poverty
• Lower inequalities than other emerging-market/
developing regions
• Better situation in terms of equality of opportunities but
still serious cases of exclusion (think about Roma
population)
7

8. RBEC region: forthcoming challenges
• Slower global and regional growth
• Decline in commodity prices
• Conflict in Eastern Ukraine
• Stagnation in the EU Enlargement process
• Impact of Middle East instability
• Increasing migration flows
• Poor governance and business climate
• Ineffective welfare state vs. population aging
8