Income inequality and nations' altruism

Abstract

To tackle poverty and ill health in developing countries, industrialised countries agreed in the 2002 Monterrey Consensus on Finance for Development to devolve 0·7% of their gross national income (GNI) to development aid. Up until now, that target has only been achieved by some Nordic countries. We noticed that these countries also experience the lowest levels of income inequality. To assess the strength of the association between income inequality and a nation's propensity to distribute development aid, we correlated the Gini coefficient (the most commonly used income inequality index) with figures for official development assistance (ODA, expressed as a percentage of GNI) for 22 countries belonging to the Organisation for Economic Co-operation and Development (OECD). Income inequality measures come from the most recent values reported on the Luxembourg Income Study (LIS) website (http://www.lisproject.org), and from OECD or UN-WIDER sources when LIS data were unavailable. Data on ODA/GNI ratios and on gross national product (GNP) per capita are drawn from OECD statistics for 2003. As shown in the figure, we found a significant inverse correlation between Gini coefficient and ODA/GNI ratio (Spearman's rank correlation coefficient rs=−0·68, p=0·0005; rs2=0·46). When adjusting for GNP per capita, we obtained a similar and still significant partial correlation (rs=−0·65, p=0·0016). The value of rs2 indicates that income inequality explains almost 50% of the variability of the ODA/GNI percentage. Income inequality has been related to various societal effects. The existence of an independent contextual effect of income inequality on health has been the topic of an intense debate in recent years. However, as argued by some,1Diez-Roux AV Link BG Northridge ME A multilevel analysis of income inequality and cardiovascular disease risk factors.Soc Sci Med. 2000; 50: 673-687Crossref PubMed Scopus (266) Google Scholar it may be conceptually challenging to disentangle income inequality effects from those of individual income, their being inextricably linked. Ecological studies have also suggested that income inequality represents a correlate of operating social policies, such as those concerning health care, education, social welfare, and working conditions.2Kaplan GA Pamuk ER Lynch JW Cohen RD Balfour JL Inequality in income and mortality in the United States: analysis of mortality and potential pathways.BMJ. 1996; 312: 999-1003Crossref PubMed Scopus (864) Google Scholar, 3Lynch JW Davey Smith G Hillemeier M Shaw M Raghunathan T Kaplan GA Income inequality, the psychosocial environment, and health: comparisons of wealthy nations.Lancet. 2001; 358: 194-200Summary Full Text Full Text PDF PubMed Scopus (320) Google Scholar Moreover, associations have been found between income inequality and extent of social capital in terms of civil trust, links between individuals, and reciprocity.4Kawachi I Kennedy BP Lochner K Prothrow-Stith D Social capital, income inequality, and mortality.Am J Public Health. 1997; 87: 1491-1498Crossref PubMed Scopus (2044) Google Scholar From an economic perspective, a nation's income inequality sets the level of redistribution of public resources, which are critical in defining the protective role of social policies. Our analysis indicates that this wealth redistribution is also related to the altruistic behaviour of a nation—ie, communities that tend to distribute their goods equally are also keen to aid people in poorer countries. As with human love, whereby the more individuals receive the more they give back, for countries, the more they are equalitarian, the more they grant externally. Sociologists might like to explore these behaviours. We just argue that this is an additional reason to include Gini coefficient in the set of key human development indicators of international agencies. We declare that we have no conflict of interest.