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Wealth & Income Inequality

Global Inequality Between Countries

Why inequality within a country is only part of the picture - and how the gap between countries has changed over recent decades.

Most discussions of inequality focus on within-country inequality - the gap between richer and poorer people in the same nation. But between-country inequality - the gap in average income between different countries - is a separate and, on a global scale, historically larger component of total worldwide inequality, connecting directly to the global inequality themes covered in the international affairs module.

How the global picture has actually shifted

Between-country inequality rose sharply during a long stretch of the 20th century, as some economies industrialized rapidly while others didn’t. More recently, that trend has partially reversed: rapid growth in several large developing economies has driven a degree of convergence - poorer countries’ average incomes growing faster than wealthier countries’, narrowing the gap between them, even as within-country inequality has often risen at the same time.

Two trends moving in different directions

Global between-country inequality has fallen meaningfully in recent decades, driven substantially by rapid growth in populous countries like China and India. At the same time, within-country inequality has risen in many of those same countries, and in many wealthier countries too - showing that overall global inequality has genuinely complex, sometimes offsetting components, not a single simple trend.

Why this distinction matters for how “global inequality” is discussed

A statement like “global inequality is falling” and a statement like “inequality is rising within most countries” can both be true at the same time, describing different components of the same overall picture. Understanding which specific measure is being discussed - within-country, between-country, or a combined global total - is essential to correctly interpreting claims about global inequality trends.

Assuming a single inequality statistic tells the whole global story

Headlines about global inequality "rising" or "falling" often refer to just one specific component - within-country, between-country, or a particular combined measure - without always making that clear. Checking which specific measure is being referenced avoids drawing an overly simple conclusion from a genuinely more nuanced set of trends.

Key takeaways
  • Within-country inequality and between-country inequality are separate, distinct measures.
  • Rapid growth in large developing economies has driven convergence, narrowing the gap between countries.
  • Within-country inequality has often risen even as between-country inequality has fallen.
  • Claims about "global inequality" should be checked against which specific measure they're describing.
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