INNOVATIVE AND IMPORTANT, YES, BUT ALSO INSTRUMENTAL AND INCOMPLETE: THE TREATMENT OF REDISTRIBUTION IN THE NEW EW POVERTY AGENDA

The current narrative on poverty reduction, summarized in WDR 2000/1, rehabilitates distribution as a central topic on the development agenda. WDR argues (i) that redistribution matters for instrumental reasons, as a route to faster growth and faster poverty reduction; (ii) that changes to income distribution result from complex changes in sectoral, geographical and individual performance; and (iii) that better distribution can be achieved in a win-win fashion, without undermining incentives or forcing a choice between equity and efficiency. The argument can be extended: (i) the case for redistribution is not simply instrumental, but can be rooted in a discourse about social inclusion and rights; (ii) observed changes are strongly associated with liberalization policies, and with changes to social norms; and (iii) governments can do more than the Bank suggests to achieve greater equality. A commitment to redistribution should be enshrined in a new international development target: a ceiling on Gini coefficients of 0.45.