especially in India, will become much more important for the continued reduction of global inequality.<sup>27</sup> Third, climate change places considerable uncertainty on any such growth projection.

Regarding the overall level of global inequality, Hellebrandt and Mauro (2015) predict a decrease in the global Gini of almost 4 percentage points by 2035, which is substantial but leaves global inequality at a high level. Their results also show that growth (in GDP per capita proxying for survey incomes) will be crucial: In a scenario where poor countries grow slower than the baseline projections, the Gini index declines only by 1 percentage point. In contrast, overturning the decline in global inequality would require an increase of around 6 percentage points in within-country inequality in all countries, which is substantial.<sup>28</sup>

# **VI. Research agenda and concluding remarks**

More and better data have to be the top priority for future research on inequality in developing countries. First, good quality data on living standards are still missing in a number of countries, especially in the Middle East, the African continent, the Caribbean and the Pacific. Recently, the World Bank committed to support countries such that all poor countries have a survey at least every three years (World Bank, 2015b). Second, in middle-income countries, where agriculture and own-consumption is becoming less important, more attention ought to be paid to income data, as opposed to consumption expenditure. Levels and trends in inequality can be different if they are measured in terms of income or consumption expenditure, especially if the growth has been concentrated at the top where expenditure might be a poor measure.<sup>29</sup> Third, very little is known about capital incomes in developing countries, since many income surveys do not even attempt to collect this information.

Finally, and closely related, the measurement of top incomes needs to be improved in developing countries. The administrative records that have been used in developed countries are not available for the developing world. The most innovative approaches to inequality measurement combine income information from administrative records with household surveys for other questions.<sup>30</sup> Broad-based income taxes will generate these administrative records, similar to Piketty’s proposal

> 27 Roughly speaking, when the average income in China exceeds the global average, growth in China will have a disequalizing effect on global inequality. This is likely to happen very soon, as Milanovic (2016) explains in detail. 28 While it is not unprecedented for individual countries over a 20-year period, this is unlikely to happen in all countries in the world.

> 29 This does not necessarily apply to the measurement of absolute poverty, such as the $1 per day poverty estimated by the World Bank. Even though the importance of the agricultural sector is declining in these emerging economies, many of the poorest individuals will continue to live in rural areas and work in agriculture. Furthermore, monetary and non-monetary transfers may be underreported at the bottom in an income survey. For example, the US Current Population Survey fails to capture many transfer payments at the very bottom, when compared with administrative records (Meyer et al., 2015). As a result, consumption is often surprisingly high for individuals on very low or even zero incomes (e.g. Brewer et al., 2013 for the UK).

> 30 For example, France recently began using register-based information (including tax records) for some questions in its EU-SILC survey (Burricand, 2013).

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