A Workshop to Strengthen Understanding, Assessment & Reporting
June 3-4, 2016
New York, New York
Executive Summary
This report summarizes the discussions and resulting recommendations from the June 3-4, 2016 workshop organized by Friedrich-Ebert-Stiftung New York and New Rules for Global Finance to strengthen understanding, assessment and reporting on what impact the global financial rules and rule makers – in the International Monetary Fund (IMF), World Bank, Organization for Economic Cooperation and Development (OECD), United Nations (UN), G20, and Financial Stability Board (FSB) – can have on economic inequalities and the social and political inequalities linked to them. The workshop was structured around two roundtables, one featuring inputs from an academic- and policy-experts’ Reflection Group on Inequality, the other featuring presentations from the rule-making international organizations on their approaches to inequality. This was followed by moderated breakout groups looking at how each of the organizations might impact inequality.
The opening roundtable questioned organisers’ notion that the problem with strengthening reporting objectives has primarily to do with refining the use of best measures, literature and data and not the implications of more fundamental questions. There was a broad agreement that, as one participant put it, “There is a danger of getting distracted by relatively insignificant questions, when the stories we tell about inequality vary little depending on whether we use Gini or Atkinson or some other measure.” Instead, participants emphasized the need for a comprehensive “dashboard” of measures and indicators, since the greater problem is not a lack of tools but a lack of adequate data on matters like the care economy, capital incomes, illicit financial flows, and even basic population data from a number of developing countries.
During the second roundtable, representatives from the international organizations presented a range of research and discussed how it impacts the development of targets and policy mandates. The IMF is exploring how inequality impacts its mandate, notably through research on links between inequality and economic growth and stability. The World Bank approaches inequality indirectly, through its indicators of “shared prosperity” and poverty reduction. The OECD introduced its new framework on inequalities: "Productive Economies, Inclusive Societies" and mentioned its focus on expanding datasets beyond its wealthy member states, to include upper 2 middle-income countries such as Brazil and India. The UN Development System (UNDS) is finalizing inequality indicators for Agenda 2030’s Sustainable Development Goal (SDG) 10, but an Inter-Agency Task Force charged with coordinating the UN system’s approach underscores the huge task to correct inconsistencies in data that exist across the large number of UN entities. The G20 German Presidency will put inclusive and sustainable growth at the heart of its work program in 2017. Finally, the Financial Stability Board is conducting impact assessments of financial reforms on government spending and has begun to incorporate financial inclusion goals into its work plan.
Observations and recommendations:
· It is necessary to be more clear about the relationship between wealth and income inequality;
When wealth can buy access, inequality within a country can corrupt the political decision-making process;
· The lack of good data is a more serious stumbling block than a lack of tools to analyze inequality, especially for international inequality;
· The international organizations should do much more to encourage countries to be more transparent about wealth and income data;
· Organizations dominated by the Global North (especially OECD) have historically been lacking in sufficient space for developing countries to have an impact on their decision making, which points to the need for the UN to create that space;
· There are two main roadblocks to strengthened understanding, assessment and reporting on inequality: o a lack of sufficient data to accurately assess inequality, especially international inequality; and o political capture, either of the international organizations by the richest and most powerful countries, or of national governments by the richest and most powerful private actors.
· The project should therefore focus explicitly on the relationship between economic and political inequalities, drawing on the fact that the abuse of political rights places clear obligations on states in a human rights framework.
Full workshop report available here
This report was prepared by the workshop organizers: Sara Burke, Senior Policy Analyst at Friedrich-Ebert-Stiftung New York, Jo Marie Griesgraber, Executive Director of New Rules for Global Finance, Matthew Martin, Executive Director of Development Finance International, and Nathan Coplin, who at the time of the workshop was Deputy Director of New Rules for Global Finance. Please direct any follow up questions to Ms. Burke This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Ms. Griesgraber This e-mail address is being protected from spambots. You need JavaScript enabled to view it