Extreme Inequality: Evidence from Brazil, India, the Middle East, and South Africa

Abstract

This paper presents new findings about inequality dynamics in Brazil, India, the Middle East, and South Africa from the World Inequality Database (WID.world). We combine tax data, household surveys, and national accounts in a systematic manner to produce estimates of the distribution of income, using concepts coherent with macroeconomic national accounts. We document an extreme level of inequality in these regions, with top 10 percent income shares above 50 percent of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top, whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population below top groups. We discuss the diversity of regional contexts and highlight two explanations for the levels observed: the historical legacy of social segregation and modern economic institutions and policies.