Global Wealth Research Articles

Capacity Building of the Trade Bodies to Boost Private Sector Development

According to the Global Wealth Report 2019, the amount of global aggregate wealth is USD 360.6 trillion, which means per capita wealth is USD 70,850 and each living adult is supposed to have USD 70,850 of his own. Nobody should be poor; no hunger should be there around the world. But the reality is only 1% people own 45% wealth of the world and the top 10% people owns 82% of the global wealth. From macroeconomic perspective, the 16 wealthiest countries own the maximum wealth of this planet. This uneven distribution of wealth is not happening deliberately, there are many reasons for that. Social scientists, policy makers, government and development partners are trying to reduce this disparity and make a poverty-free, hunger-free world for us. To achieve this objective poverty alleviation is the number one target. This single target cannot be achieved by a single stakeholder i.e. government, private sector, development partners etc. United effort of all the stakeholders is required to achieve it. Private sector development is the easiest option to alleviate poverty and reduce social disparity. Making everyone economically rich is not possible but ensuring livelihoods and economic empowerment for all is essentially an achievable target. A country is developed when its private sector is developed. Economic development is essential for social security, safety net, better standard of living, good governance so on and so forth. Private sector development is also the number one objective of the government. Government is trying to formulate pro-private sector policies and facilitate private sector participation in decision making.

A critique of the Laffer theorem’s macro-narrative consequences for corporate tax avoidance from a Global Wealth Chain perspective

ABSTRACT Global Wealth Chain analysis explores the potential for wealth creation to become wealth capture. Corporate tax avoidance is a component in many GWC. The problem is complex, involving both practices and undergirding macro-narratives that support a status quo and limit political and regulatory action. In this paper, I argue that the Laffer theorem and its legacy plays a background role in framing tax avoidance. The theorem is one component in a general direction of travel of neoliberal policy. Following general discussion of the issues I note that the original version of the theorem takes no account of avoidance and subsequent iterations do so based on incompatible concepts of firm behaviour. These problems are rooted in mainstream economic methodology and distort a more historical, sociological and institutional understanding of the economy. This has additional consequences for issues of tax justice, since these sit awkwardly with formal economic analysis.

Evolutionary game inspired by Cipolla's basic laws of human stupidity.

In this work we present an evolutionary game inspired by the work of Carlo Cipolla entitled The Basic Laws of Human Stupidity. The game expands the classical scheme of two archetypical strategies, collaborators and defectors, by including two additional strategies. One of these strategies is associated with a stupid player that, according to Cipolla, is the most dangerous one as it undermines the global wealth of the population. By considering a spatial evolutionary game and imitation dynamics that go beyond the paradigm of a rational player we explore the impact of Cipolla's ideas and analyze the extent of the damage that stupid players inflict on the population.

Taxation Untapped: The Potential of the UN Sustainable Development Goals to Promote Progressive International Tax Reform

Taxation is a unique and valuable method to create a significant and sustainable source of domestic and international public finance for the public goods essential to the realisation of the UN’s Sustainable Development Goals (SDGs). However, current proposals for reform of the international tax regime to address tax avoidance by high-profit multinational corporations (MNCs) are deeply flawed. This contribution explores the potential of Goal 17 of the SDGs to mandate and articulate a progressive international tax reform agenda based on two pillars. The first makes recognition of the real harms done by massive tax evasion by MNCs central to any reform agenda, and proposes that taxation be reconceptualised as an institution representing a public compact between a government, its people and MNCs in a public-oriented state. The second pillar proposes the concept of Global Wealth Chains (GWCs) as the basis for exploring a more effective, transnational tax governance regime. In the following paragraphs I highlight the estimated funding gap to meet the SDGs, and describe the size and harmful effects of the ‘tax gap’ from tax evasion and avoidance, in particular for poorer countries. I then show how the flagship international tax reform agenda led by the Organisation for Economic Co-operation and Development (OECD) and G20 - the Base-Erosion and Profit-Shifting (BEPS) project - is based on a flawed understanding of the governance of MNCs’ profit-generation activities. I conclude with a proposal for the need to think systematically, historically and strategically about international tax governance, in order to articulate and promote an equitable and effective international tax reform agenda.

Why a Richer World Will Have More Civic Discontent: The Infinity Theory of Social Movements

Two narratives of economic development are presented. The first highlights contemporary global wealth and income inequality. The second illustrates historical aggregate gains in global wealth and income. Within these two broad narratives of economic development, protests and social movements will arise to modulate feelings of unfairness and deprivation. A new theory of social movements is developed. Collective remembering and collective imagining can inform feelings of unfairness, frustration, and relative deprivation in the present. This theory highlights the importance of a temporal account of the development of social movements within democracies that allow for the expression of civic discontent without brutalization. The theory predicts aggregate global economic development, with unequal economic gains, will always necessitate social movements to modulate economic inequality and circumvent perceived and actual hardship. The implications of this theory for understanding globalization, social movements, and creating fairer democratic societies are discussed.

Does a global wealth tax reduce inequality? When Piketty meets Mankiw

We investigate the effects of a wealth tax on consumption and wealth inequality in a standard small open economy model featuring labour income heterogeneity. We show that consumption inequality and wealth inequality are identical in the long run if consumption growth exceeds output growth. Under this condition, the wealth tax reduces long run inequality under two additional conditions. First, the difference between the rate of return on wealth and the growth rate, r−g, is higher than a positive threshold. Second, the tax rate is lower than a cap which rises in r−g but decreases in labour income heterogeneity.

C. Pareto's Rule 80/20 Pareto’s Rule on global wealth and material distribution: The role of start-ups to change the dynamics of the rule

Pareto Rule of 80/20 has a lot to inform the globe of the inequalities that prevail in human and business systems. This Rule of 80/20 was first postulated by Juran in 1937, however the principles are still applicable in the modern society. It is so unfortunate that the 20% who controls 80% (vital few) of the global wealth, is still sustained. The 80% who controls only 20% (trivial many) of the global income still find themselves constricted to that position. This is a pathetic situation, and governments should do well to help start-ups and the marginalised in societies to extricate themselves from this mess. Poverty or unfair distribution of wealth should not be accepted as the order of life, and individuals should do well to come out of it. It is the hope of this article that when start-ups are given the necessary push by government to be sustainable, there would be a paradigm shift within the 80/20 Rule of Pareto

The Effect of Knowledge Components on the Inequality of Global Wealth Distribution

The Effect of Knowledge Components on the Inequality of Global Wealth Distribution

Georg Hegel on Social Inequality and Lessons from History for the Modern Welfare State

Complementing the strand of literature on problems of social inequality we offer a perspective inspired by the work of Georg Hegel. The German philosopher’s prescient view on the dialectical bond of emerging capitalist system and the role of the fiscal state was impressive in its development potential with insights for the industrialized society. Taking stock of the post 2008-crisis environment of greater social marginalization, the adjustment path to a stable modern social equilibrium appears to be lengthy, filled with patches of low growth and higher social costs. A pragmatic policy response is needed. We critically analyze some of the ambitious recent policy proposals on income redistribution and welfare state (e.g. Obama plan, Sarkozy-Hollande plan, global wealth tax, and more recent debates prompted by the US and EU political cycles). Despite the preferred model, the role of the fiscal contract is instrumental and rising social value of the welfare state on a global scale is just one component of the social-economic puzzle. The paper offers some conclusions deeply rooted with economic history analysis weighing somewhat subjective assessments on practicality of the welfare state resurrection in the new century.

Practical Applications of Liabilities Matter: Improving Target Date Glidepath Construction through Liability Adaptive Asset Allocation

Practical Applications Summary In Liabilities Matter: Improving Target Date Glidepath Construction through Liability Adaptive Asset Allocation, from the Summer 2019 issue of The Journal of Retirement, author Michael W. Crook (of UBS Global Wealth Management in New York, NY) calls into question the rationale behind the most popular investment funds in today’s employee defined-contribution (DC) plans. Target date funds (TDFs)—which, for example, are held by 75% of participants in DC plans managed by Vanguard—use a preset schedule called a glidepath to reallocate assets from equities to fixed-income securities as a participant’s retirement date approaches. The author finds that this approach does not work as well as the liability-driven investment (LDI) strategy used by pension plans. LDI is more responsive to the needs of participants because it focuses not on participants’ retirement dates, but on how close they are to having enough money on which to retire. It reallocates assets to fixed-income securities as a participant’s plan balance approaches the amount needed to fund all retirement expenses. The author finds that LDI produces better outcomes, is easier to explain to clients, and makes it easier for financial advisors to provide customized financial planning and total wealth management for their clients.

Environmental aspects in Earth sciences and environmental management: a brief overview of author's developments against the background of global trends

Earth science and geography are experiencing a new Renaissance, called environmentalism. It is due to the growing importance of threats for the global community because of the negative reaction of the natural environment to the growing workload. The purpose of this article is to show innovation and investment opportunities that must significantly change the attitude to geography and Earth sciences in general and identify opportunities for the formation and development of environmental geography by radically modernizing the approach, especially research methods, mainly through the latest geographical education, making it an urgent social need. The article summarizes the experience and results of the author and his colleagues’ work over two decades of research. Main material. Presentation of the basic content of the article is organized into 3 rubrics. The trends of conceptual changes are considered as an extension of traditional ecology to environmentology. There is a transformation of the subject - object dualism of classical ecology to the realization of complex interaction. It is generally the subject of environmentology. Only in this case, the consumer attitude to the natural environment transforms into the knowledge of natural systems as a stakeholder of mankind. This trend is due to the awareness of the importance of complex natural systems, arbitrarily called the natural environment, in relations with humanity. The relations have to become partnership ones, not aggressive ones. The science that deals closest with this problem is environmental geography. The importance of the territory as an integral resource of the society is stressed in the trends of sustainable development. It is considered not only as a necessary, though non-economic condition of existence, but as an economic object, that is natural capital. The latter requires a different attitude to itself than just the environment: inventory procedures (like other means of production), objective assessment, amortization, ever-increasing investment and economic transformation into the actual trend. Intangible natural resources -the prospect of environmental geography. In this case, natural environment of the external conditions of human existence will become an essential and indispensable part of the global and national wealth of countries. Natural-resource rents should become a way of filling the gross domestic product at different levels of the society’s structuring (environmental economy). Along with material and energy resources, the value of intangible natural resources and relevant environmental management is significantly increasing, which environmental geography also should deal with. Conclusions and prospects. 1. In fact, at present humanity is possessed by geographical problems of the environment. Determining the general trend of the world community development, they are at the core of sustainable development. At the same time, these problems are still being solved without the involvement of geographical science and geographical technologies. 2. In the context of the information era, when the problems of negative environmental changes become public and are regarded as the first threat to human existence, geography should become environmental geography. For this purpose, it must change people’s attitude to the natural environment, considering it to be an equitable subject of relations with humanity. 3. The approaches to the environment as natural capital, which provides significant economic surplus value and social value, are considered effective. Unfortunately, these qualities of nature have not received a value expression yet. They remain public resources, while they should be assets of the environmental economy. 4. The formation of these development trends is able to make environmental geography join the list of avant-garde sciences, providing the prospect of sustainable development of mankind.

The Role of National Economies in The Creation of World Wealth

The purpose of the study is to determine the role countries play in creating world wealth in terms of the modern stage of social development. Methodology of research is based on general scientific and special research methods such as analysis and synthesis, generalization, grouping, and forecasting. Findings. World wealth is defined as the cumulative effect of national wealth created by countries. It is established that the modern role of countries in the creation of world wealth is clearly demonstrated by the dynamics of real GDP indicators, which is analyzed by groups of countries and presented as a comparison of absolute and relative increase / decrease values in the long-term period (1980-2018). It was found that the dynamics of world wealth growth was generally positive over a long time. At the same time, it was not progressively growing, but fluctuating with a remaining upward trend. This is due to the cyclical development of the economy, its crises and other manifestations of instability in the world (in particular, political, environmental, technological, and social). The following is revealed: economies of developing countries are growing faster, but a large share of world wealth in terms of real GDP is created by developed countries, they also provide a greater degree of its increase. Extrapolation of actual data (1980-2018) for the future (2019-2023), indicates a sufficient probability of maintaining the leading economic dynamics of developing countries in comparison with developed countries. However, it is necessary to take into account a number of geopolitical and geo-economic factors that can significantly adjust this forecast. It is necessary to note the following factors: changes in relations (both political and economic) between the United States and China; a slowdown in the economic growth of large-scale national economies in developing countries (China, India), as well as low activity of the world trade, which does not stimulate the recovery of high economic growth rates of more successful countries and does not help prevent the decline of less developed countries (Iran, Venezuela, etc.). It is proved that rapid economic growth in developing countries does not lead to the same intensive accumulation of wealth in these states as well as its effective use for national development and improvement of the standards of living. Practical value is that the main research results contribute to the development of international economic theory; their applied significance is determined by the forecasts of the formation of world wealth and the role countries play in this process (according to the level of their economic development and regions). Keywords: world wealth, national wealth, world economic trends, economic development, economic growth. REFERENCES 1. Acemoglu, D. & Robinson, J. A. (2017). Chomu natsii zanepadaiut: pokhodzhennia vlady, bahatstva ta bidnosti [Why Nations Fail: The Origins of Power, Prosperity, and Poverty]. Kyiv: Nash format [in Ukrainian]. 2. Kolomiiets, H. M. & Didorchuk, I. L. (2015). Reitynhy krain za rivnem IT-sfery yak indykatory rozvytku aktualnykh form suspilnoho bahatstva [Ratings Countries in Terms of IT Sector as Indicators of the Actual Forms of Social Wealth], Biznes inform – Biznes inform, 11, 8–15 [in Ukrainian]. 3. Milanovich, В. (2017). Globalnoe neravenstvo: novyj podkhod dlya epokhi globalizaczii [Global Inequality: A New Approach for the Age of Globalization]. Instituta Gajdara [in Russian]. 4. Naisbitt, J. (2003). Mehatrendi [Megatrends]. Moscow: AST CJSC NPP «Ermak» [in Russian]. 5. Reinert, Е. S. (2017). Kak bogatye strany stali bogatymi, i pochemu bednye strany ostayutsya bednymi [How Rich Countries Got Rich... And Why Poor Countries Stay Poor]. Moscow: Izd. dom Vysshej shkoly ekonomiki [in Russian]. 6. Deaton, A., Grosh, M. (2000). Consumption. Designing Household Survey Questionnaires for Developing Countries: Lessons from Ten Years of LSMS Experience Grosh and Glewwe. Washington, DC : World Bank. 7. Florini, A. (2000). Ann FLORINI. What the World Needs Now? The Third Force. The Rise of Transnational Civil : Society Carnegie Endowment for International Peace. 8. GDP, current prices, 2018. International Monetary Fund official Website : IMF Data Mapper. – Retrieved from: http://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD (accessed 18.11.2019). 9. GDP based on PPP, Share of World, 2018. International Monetary Fund official Website: IMF Data Mapper. – Retrieved from: http://www.imf.org/external/datamapper/PPPSH@WEO/OEMDC/ADVEC/WEOWORLD (accessed 18.11.2019). 10. Inflation Rate, Average Consumer Prices (2018). International Monetary Fund. – Retrieved from: http://www.imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/ADVEC/ (accessed 18.11.2019). 11. Research Institute. Global Wealth Report 2018. CREDIT SUISSE AG Research Institute. 12. The real wealth of nations. (2012) The Economist. – Retrieved from: http://www.economist.com/node/21557732 (accessed 18.11.2019). 13. The Changing Wealth of Nations Measuring Sustainable. Development in the New Millennium (2011). Washington : The World Bank Washington DC. Published: 20 20 - 03 - 26

An Evolutionary Game Model with Punishment and Protection to Promote Trust in the Sharing Economy

In this paper, we present an evolutionary trust game, taking punishment and protection into consideration, to investigate the formation of trust in the so-called sharing economy from a population perspective. This sharing economy trust model comprises four types of players: a trustworthy provider, an untrustworthy provider, a trustworthy consumer, and an untrustworthy consumer. Punishment in the form of penalty for untrustworthy providers and protection in the form of insurance for consumers are mechanisms adopted to prevent untrustworthy behaviour. Through comprehensive simulation experiments, we evaluate dynamics of the population for different initial population setups and effects of having penalty and insurance in place. Our results show that each player type influences the ‘existence’ and ‘survival’ of other types of players, and untrustworthy players do not necessarily dominate the population even when the temptation to defect (i.e., to be untrustworthy) is high. Additionally, we observe that imposing a heavier penalty or having insurance for all consumers (trustworthy and untrustworthy) can be counterproductive for promoting trustworthiness in the population and increasing the global net wealth. Our findings have important implications for understanding trust in the context of the sharing economy, and for clarifying the usefulness of protection policies within it.

Measuring the Contribution of Faith-based Schools to Human Capital Wealth: Estimates for the Catholic Church

This paper provides estimates of the contribution of faith-based schools to human capital wealth using recent World Bank data. Wealth is the assets base that enables nations to generate future income. Estimates suggest that human capital wealth accounts for two thirds of global wealth, a much larger proportion than natural capital and produced capital. This paper’s analysis relies on an assessment of the share of human capital wealth attributed to educational attainment, and the share of contribution of Catholic schools to educational attainment. The analysis suggests that Catholic schools contribute at least US$ 12 trillion to the changing wealth of nations.

Global Wealth Inequality

This article reviews the recent literature on the dynamics of global wealth inequality. I first reconcile available estimates of wealth inequality in the United States. Both surveys and tax data show that wealth inequality has increased dramatically since the 1980s, with a top 1% wealth share of approximately 40% in 2016 versus 25–30% in the 1980s. Second, I discuss the fast-growing literature on wealth inequality across the world. Evidence points toward a rise in global wealth concentration: For China, Europe, and the United States combined, the top 1% wealth share has increased from 28% in 1980 to 33% today, while the bottom 75% share hovered around 10%. Recent studies, however, may underestimate the level and rise of inequality, as financial globalization makes it increasingly hard to measure wealth at the top. I discuss how new data sources (leaks from financial institutions, tax amnesties, and macroeconomic statistics of tax havens) can be leveraged to better capture the wealth of the rich.

Over the Top: Why an Annual Wealth Tax for Canada is Unnecessary

The idea of a wealth tax has taken on new prominence since French economist Thomas Piketty famously proposed a global wealth tax in 2013; Senator Elizabeth Warren has even made a national wealth tax a plank in her campaign to become the Democratic presidential candidate in 2020. The current interest in wealth taxation is a response to the increase in wealth concentration and income inequality that has occurred in most OECD countries. It has been well documented that both income and wealth inequality have risen significantly in recent decades. In this Commentary, we critically evaluate the case for an annual wealth tax as part of Canada’s tax system. To do so, we review current received wisdom on the elements of a good tax system, drawing on the normative tax design literature and best practices. We do not address the issue of how responsive tax policy needs to be to deal with the evolving inequality of income and wealth. Our focus, instead, is on the mix of policy instruments that are most effective for whatever degree of responsiveness policymakers choose. Our argument is that wealth taxes add relatively little to the taxes on capital and capital income that are already in place, and that concerns about the social consequences of wealth concentration are better addressed by reform of existing capital income taxes and by considering wealth transfer (inheritance) taxation. Our argument against wealth taxation is over and above the substantial administrative challenges in measurement, collection and coverage for annual wealth taxes. These alone are enough to raise red flags about wealth taxation. For our part, we rely on the more fundamental argument that annual net wealth taxes are unnecessary since their objectives can be better achieved by suitably designed taxes on capital income and wealth transfers.

Inequality, Injustice and India’s Forgotten People

It is the Boston Consulting Group’s 15th annual report called ‘Winning the Growth Game: Global Wealth 2015’ that has been extensively reported by the media persons in India. This report came just one year after the Global Wealth Databook 2014 from Credit Suisse wherein the picture of global inequality is presented in a more accurate and comprehensive manner. It is undisputed that over time there has been a significant decline in poverty in India. However, the same is not true about inequality. Has inequality declined with the same rate as the decline in poverty in India? As per the official data collected on all parameters of development in India the tribals are straggling way behind in terms of income, health, education, nutrition, infrastructure and governance. Tribals in India have been the receivers of injustices throughout the process of development. To exemplify, among 65 to 70 million people displaced during the development process in India 40 per cent are tribals. In India, more than 90 per cent of total coal and above 50 per cent of minerals and dams are located in the tribal regions, yet these areas have remained the least developed. In paradox to economic theory, many developed districts in India include pockets of intense backwardness. The paper argues that in India the tribals have remained excluded from the list of beneficiaries in the development process. The paper also discusses the process of marginalization of tribal in the developmental process and towards the end gives some recommendations.

WEALTH MANAGMENT MARKET IN CHINA OPPORTUNITIES AND CHALLENGES

As the key player in prospective Asia-Pacific market, China is becoming one of the most notable countries with regard to private banking services. In spite of being relatively young, Chinese wealth management market has been developing rapidly with increasing number of affluent clients and their value of total assets. Currently undergoing through transition between early development and maturity, Chinese wealth management market has several challenges to face in order to become a fully established one. The research objective of the article is to present the characteristics and potentia of Chinese wealth management market and to what extent does it correspond with global wealth management trends. The research method applied in the paper is an in-depth analysis of the case study regarding Chinese wealth management market with its’ potential and challenges. In order to carry out the analysis, various reports on the issue in question published by leading consulting companies, banks and experts were analyzed and relevant statistical data in the given period of time was examined as well. The outcome of the article is to list key steps for Chinese wealth management market to be taken, in order to elevate its’ status as one of the leading wealth management markets worldwide.

Segmenting Chinese Millennial Restaurant Customers: A Lifestyle and Health and Environmental Consciousness Approach

ABSTRACTThis paper provides insights into the attitudes and behaviors of Chinese Millennials towards dining out, based on a sample of 468 respondents in Hong Kong, China. Millennials are the generation that is most conscious of sustainability and personal health issues, and they are contributing to the growing demand for wellness-related products and services. The Chinese are the largest emerging group within this cohort for global spending and wealth creation, and their consumption behaviors are increasingly influential in a resource-scarce world. Prior studies have adopted various approaches to segment restaurant customers. However, none have formed segments using consumer health and environmental-related attitudes and behaviors. Furthermore, there have been relatively few studies on the menu information which customers value most. Respondents in the current study were segmented on the basis of their lifestyles and health and environmental consciousness. The researchers identified six customer segments and compared their attitudes to two types of information on restaurant menus – nutrition and sustainability.

Cut and Paste: Charlie White on the Collage Impulse Today

ONE COULD ARGUE that the current financial meltdown has been lurking behind every corner—that with each new height of global wealth, voices of reason warned that the bottom would surely fall out. P...