Measuring and delivering social inclusion: Leave no one behind in the digital transformation journey

Abstract

We have lived with COVID-19 for almost two years. It has affected economies all around the world, particularly in the developing world. Yet, developing economies, while experiencing an economic contraction in 2020 have rebound relatively quickly and the IMF forecasts them to perform better than developed economies this year (although the next year’s growth rates are predicted to be somewhat lower). But what about inequality? Has COVID-19 affected inequality in developing economies and how? Now two years after the start of the pandemic we have some, albeit incomplete and scattered, evidence about this impact. While discussing this issue, we should have in mind that inequality has different dimensions; in addition to income inequality (which is the most often used measure of inequality), there is also wealth inequality as well as inequality in access to services. This paper focuses on within-country income inequality while hypothesizing about the impact of income inequality on access to basic social services (such as healthcare and education), and its impact on income inequality in the medium and long run. The paper largely ignores the dimension of between-country inequality (Milanović 2011), recently reviewed in the context of COVID-19 by Deaton (2021), although some comparisons are almost inevitable as the first part of the paper discusses the structural characteristics of developing economies and their potential inequality impact in comparison with developed economies. Geographically, the focus is on the least developed and some developing countries, taking a closure look at Uganda, Bangladesh, Senegal, South Africa and the Philippines.