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The growing inequality is often reflected in the cityscape: High-rises in the commercial centres, and shacks for those that are left out.

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Social science research addresses rising inequality

Published: 5 December 2014 Updated: 5 December 2014

Inequality increases polarization, limits democracy and economic growth. At least according to the UN research institute for social development, UNRISD. Economic redistribution, decreasing education divides, and well-managed finances, are part of the solution, according to UNU-WIDER. Sweden supports both UN research institutions on social science. Now they encourage action against inequality.

One percent of the Earth’s population owns almost 50 percent of its total wealth. At the same time, 2.2 billion people currently live in or near so-called multidimensional poverty, with overlapping deficits in education, health and living standard.

Inequality is not only unjust; it also leads to unsustainable societies. Inequality leads to criminality, polarization, bad health and an uneducated workforce, which is forced into low wage-jobs, while the political influence is concentrated with the wealthy.

This is claimed in a report by UNRISD, one of two UN social science research institutes that want to put inequality on the agenda.

UNRISD: Including the poor through structural change

– The development agenda needs to become more universal, and not just concern itself with the poor.

The statement may sound unexpected to come from Sarah Cook, director for the UN Research Institute for Social Development (UNRISD), an organization receiving Swedish support. But her point is that policy has to focus more on creating sustainable societies.

– Social policies can’t just be about protection of individuals, but also about including them in society through work and education. Economic inequality is increasing, and this needs to be considered in the next series of development goals, says Sarah Cook.

In 1963, when UNRISD was founded, development was mainly measured by economic growth. But the institute showed how social factors like nutrition, health and education can play an important role in the development of a country. The inspiration partly came from the Swedish economist Gunnar Myrdal, who was awarded with the Nobel economics prize. This perspective still guides their research.

Inequality has been a topic in many of their reports, for example Combating Poverty and Inequality (2010). In the foreword, Ban Ki-Moon writes that UNRISD shows that wealth not automatically trickles down with economic growth, but that conscious action is needed if we are to reach equitable societies. According to UNRISD, this requires a structural perspective.

But equality also has to preside between women and men:

– Reproductive work, like caring for children, the sick and the elderly, is generally carried out by women, and is often unpaid. This work must be recognized as an important part of our economies, writes UNRISD.

UNU-WIDER: Aid makes a difference – both in the short and the long run

UNU-WIDER has also taken interest in the question of inequality. In a policy brief from June 2014, development economist Giovanni Andrea Comia presented his research on why inequality has decreased in Latin America. He points to a combination of redistributive policies, decreasing educational divides and well-managed finances. For example, despite increasing welfare expenditure, foreign borrowing was halved between 2002 and 2009 in the countries under investigation.

The study shows that conscious policy work can make a big difference, and that the trend of increasing inequality can be turned around. According to Finn Tarp, UNU-WIDER director, social science should play a key role in these issues:

– Structural transformation, inclusion and sustainability are big issues. Social scientists should not shy away from them, but provide insight to policy makers.

Sweden supports UNU-WIDER and their work in studying the long-term effects has approached the question scientifically. They have involved more than 300 researchers from 59 countries in the largest attempt so far to answer the question of the aid effectiveness.

Their research resulted in 247 unique reports and 15 key results. An annual inflow of aid equivalent to five percent of GDP increases schooling by 1.4 years per child and boosts life expectancy at birth by four years. The research also showed that aid has a 7.3 percent annual rate of return. So even if individual aid contributions sometimes fail, on the aggregate level they have a significant economic impact. But aid often needs time to take effect:

“This is a cumulative process. Many of the growth effects are not seen immediately. Sending a child to school improves their well-being today, but most of the economic benefits occur in the long run, when that child eventually enters the workforce.” (“Aid in a post-2015 world”)

Another question addressed by the study is which types of aid are more effective. One recommendation that the researchers raise is that the contributions need to be scaled up and become more focussed on structural change. In order to maximize long term effects, health, poverty and environment need to be linked together instead of becoming treated as isolated problems. Furthermore, lack of reliable data in low income countries is a development barrier.

Support to social science research

Swedish support to social science research amounts to 129 million SEK for 2014.

UNU-WIDER receives 33.5 million SEK for the period 2014-2018, and UNRISD receive 47.4 million SEK for the period 2011-2014.

Page owner: The Communication Department

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