Trends in Global Income Distribution, 1970-2000, and Scenarios for 2015

The paper builds on the author’s prior research in areas of evolution of the global income distribution and of the “quasi-exact” polynomial interpolation of density functions. The 1970-2000 estimates are augmented with two 2015 scenarios: (a) distribution-neural growth (national distributions kept constant) and (b) pro-poor growth (the poor’s income grows at twice the average rate until 2015). The scenarios are based on historical 1990-2002 trends in GDP growth and UN population projections for 2015. Compared to 2000, the distribution-neutral growth scenario for 2015 shows a decline in the Gini – 0.300, Theil 1 and 2 – 0.114 and 0.082, respectively, and a decline in absolute poverty from 1,172 mln. in 2000 to 689 mln. in 2015. These changes are explained to a large degree by the projected fast growth in India and China. The pro-poor growth scenario resulted in additional 253 mln. people rescued from poverty. Two more simulations are presented: (1) transfers being made to the poor in 2000, and (2) distribution-neutral growth occurring during 1970-2000. An annex discusses advantages of the “quasi-exact” polynomial interpolation of income distributions.