By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Income inequality in both the advanced and developing economy is widening according to a recent report on ‘’Fiscal Policy and Income Inequality’’ by staff of the International Monetary Fund (IMF).

In its executive summary, the IMF reports that rising income inequality in advanced and developing economies has coincided with growing public support for income redistribution. ‘’This comes at a time when fiscal restraint is an important priority in many advanced and developing economies,’’ the report said.

The report says that over the last three (3) decades, inequality in the personal distribution of income has increased in most economies.

‘’This increase in inequality across the globe has also been accompanied by a widespread rise in public support for redistribution,’’ the report affirmed.

According to the IMF, over one-third of advanced economies and half of emerging Europe experienced increases in their Ginis exceeding three (3) percentage points, with most of the increases in emerging Europe occurring between 1990 and 1995 during the early years of their transition to market-based systems.

Also, inequality rose in most economies in Asia and the Pacific and in Middle East and North Africa. While average inequality fell in sub-Saharan Africa over this period, it still rose by more than three (3) percentage points in more than one-fourth of these economies. ‘’Inequality also increased in over one-third of the economies in Latin America, although on average there was a slight decline,’’ the report said.

The IMF said despite rising inequality, on average, poverty rates have been declining in most developing economies.

‘’The data for developing economies reflect absolute poverty rates (i.e., thepercentage of the population with per capita incomes below $1.25 per capita per day in 2005 PPPdollars),’’ the IMF affirmed.

According to the report, in sub-Saharan Africa, the combination of sustained economic growth and decliningaverage inequality has led to a substantial and sustained decline in absolute poverty rates and high growth has resulted in even larger decreases in absolute poverty in Asia and the Pacific, despite rising average inequality. ‘’Absolute poverty has also been on a downward trend in Latin America and the Caribbean as well as in the Middle East and North Africa since the mid-1990s,’’ the IMF reported.

The report further affirmed that since 2000 there has been a substantial decline in the Gini in nearly all countries in this region and the increase in inequality across the globe has also been accompanied by a widespread rise in public support for redistribution.

The ‘’Fiscal Policy and Income Inequality’’ report said changes in inequality within regions are the persistent differences across regions. According to the IMF, between 1990 and 2010, average inequality in each region changed byless than 3¼ percentage points.

This is in contrast compared to average inequality in the two (2) most unequal regions(sub-Saharan Africa and Latin America) remained 12 percentage points higher than the two mostequal regions (emerging Europe and advanced economies).

The IMF says more recently, public debate has focused on the sharp increase in the share of total income going to top income groups.‘’Over the last three decades the market income sharesof the richest one-percent of the population have increased substantially in English-speakingadvanced economies, as well as in China and India,’’ the report noted.

The report says for example, in the United States, theshare of market income captured by the richest 10 percent surged from around 30 percent in 1980to 48 percent by 2012, while the share of the richest one-percent increased from 8 percent to19 percent.

‘’Even more striking is the fourfold increase in the income share of the richest 0.1 percent,from 2.6 percent to 10.4 percent. There has been substantial variation across countries in how muchthe share of the highest income groups has risen. The increase in the share of the top one-percenthas been much less pronounced in Southern European and Nordic economies, and hardly anyincreases have been observed in continental Europe and Japan,’’ the report said.