Briefing Paper
Overseas Development Institute

February 2009

47

Growth without development: Looking beyond inequality
Does polarisation explain the divergence between growth and development?

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Key points
• Polarisation hinders both growth and human development • Measuring income polarisation provides a distinct insight into the link between growth and human development • Policy recommendations based on polarisation measures will differ from those based on conventional inequality measures, and are likely to be more nuanced
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everal countries, particularly in Asia, have seen soaring economic growth over the last decade. But when it comes to social indicators, such as health and education, they have made more limited progress. Inequality is often blamed for the poor links between economic growth and human development, but data show that links between economic growth, inequality and human development are less robust than often assumed. Important features of income distribution are not easily captured by conventional measures of inequality such as the Gini coefficient, particularly the way in which income is distributed across society. It was the Wolfson polarisation measure, for example, that highlighted the phenomenon of the disappearing US middle class – missed by the Gini. Unlike the measurement of inequality, polarisation measures focus on the clustering of members of a society at more than one income level – referred to as poles – capturing convergence around these income levels. Polarisation measures help to clarify why economic growth does not always translate into human development. They provide a distinct and