The Commitment To Reducing Inequality Index 2018

DEVELOPMENT FINANCE INTERNATIONAL AND OXFAM REPORT OCTOBER 2018
The financial district of Dhaka, Bangladesh. Despite economic growth, almost 40 million people in Bangladesh still live
below the national poverty line. Photo: GMB Akrash/Oxfam
THE COMMITMENT TO REDUCING

INEQUALITY INDEX 2018
A global ranking of governments based on what they
are doing to tackle the gap between rich and poor
In 2015, the leaders of 193 governments promised to reduce inequality under Goal 10 of
the Sustainable Development Goals (SDGs). Without reducing inequality, meeting SDG 1
to eliminate poverty will be impossible. In 2017, Development Finance International (DFI)
and Oxfam produced the first index to measure the commitment of governments to
reduce the gap between the rich and the poor. The index is based on a new database of
indicators, now covering 157 countries, which measures government action on social
spending, tax and labour rights – three areas found to be critical to reducing the gap.
This second edition of the Commitment to Reducing Inequality (CRI) Index finds that
countries such as South Korea, Namibia and Uruguay are taking strong steps to reduce
inequality. Sadly, countries such as India and Nigeria do very badly overall, as does the
USA among rich countries, showing a lack of commitment to closing the inequality gap.
www.oxfam.org
The report recommends that all countries should develop national inequality action plans
to achieve SDG 10 on reducing inequality. These plans should include delivery of
universal, public and free health and education and universal social protection floors.
They should be funded by increasing progressive taxation and clamping down on
exemptions and tax dodging. Countries must also respect union rights and make
women’s rights at work comprehensive, and they should raise minimum wages to living
wages.
See also the CRI Index website: www.inequalityindex.org and the methodology details at
http://policy-practice.oxfam.org.uk/publications/the-commitment-to-reducing-inequality-index-
2018-a-global-ranking-of-government-620553
CONTENTS
Summary ...................................................................................................................... 3
The inequality crisis, the fight against poverty and the role of governments ............................ 3
The Commitment to Reducing Inequality Index ........................................................................ 3
Methodology improvements to this year’s index ....................................................................... 6
What are the main findings of the CRI Index? .......................................................................... 7
Which countries are doing best? ............................................................................................... 7
Which countries have improved their performance since last year? ......................................... 9
Which countries are doing worst? ........................................................................................... 10
What are some of the overall trends emerging from the new CRI index? .............................. 12
Areas for improvement and further development .................................................................... 17
Recommendations .................................................................................................................. 19
1 Reducing inequality through social spending ....................................................... 20
2 Reducing inequality through tax policies .............................................................. 30
3 The role of work and wages in reducing inequality ............................................... 41
4 Conclusion ........................................................................................................... 48
Annex 1: The Commitment to Reducing Inequality findings ................................................... 49
Regional rankings .................................................................................................................... 54
Notes .......................................................................................................................... 61
Acknowledgements ..................................................................................................... 74
Endorsements ......................................................................................................................... 75
2 Commitment to Reducing Inequality Index 2018

SUMMARY
THE INEQUALITY CRISIS, THE FIGHT AGAINST
POVERTY AND THE ROLE OF GOVERNMENTS
Many countries across the world, rich and poor, have experienced rapid growth in the gap
between the richest people in society and everyone else over the past 30 years.1 Failure to
tackle this growing crisis is undermining social and economic progress and the fight against
poverty. Oxfam’s research has shown that, since the turn of the century, the poorest half of the
world’s population have received just 1% of the total increase in global wealth, while the top 1%
have received 50% of the increase.2
Inequality is bad for us all. It reduces economic growth, and worsens health and other
outcomes.3 The consequences for the world’s poorest people are particularly severe. The
evidence is clear: there will be no end to extreme poverty unless governments tackle inequality
and reverse recent trends. Unless they do so, the World Bank predicts that by 2030 almost half
a billion people will still be living in extreme poverty.4
The rise of extreme economic inequality also undermines the fight against gender inequality and
threatens women’s rights. Women’s economic empowerment has the potential to transform
many women’s lives for the better and support economic growth. However, unless the causes of
extreme economic inequality are urgently addressed, most of the benefits of women-driven
growth will accrue to those already at the top end of the economy. Economic inequality also
compounds other inequalities such as those based on race, caste or ethnicity.
Development Finance International (DFI) and Oxfam believe that the inequality crisis is not
inevitable and that governments are not powerless against it. Inequality is a policy choice, and
our findings this year show this clearly. All over the world, governments are taking strong policy
steps to fight inequality. President Moon of South Korea tops the class, having increased tax on
the richest earners, boosted spending for the poor and dramatically increased the minimum
wage. But others are doing well too. Ethiopia has the sixth highest level of education spending
in the world. Chile has increased its rate of corporation tax. Indonesia has increased its
minimum wage and its spending on health.
These positive actions shame those governments that are failing their people. Nigeria remains
at the bottom of the CRI Index, failing the poorest people, despite its president claiming to care
about inequality. Hungary has halved its corporation tax rate, and violations of labour rights
have increased. In Brazil social spending has been frozen for the next 20 years. And Donald
Trump has slashed corporation tax in the USA, in one of the biggest giveaways to the 1% in
history.5
THE COMMITMENT TO REDUCING INEQUALITY INDEX

This is the second edition of the Commitment to Reducing Inequality (CRI) Index, which ranks
157 governments across the world. The full rankings, along with regional rankings, can be found
in Annex 1. The Index is based on our comprehensive database, including countries where DFI
has strong data and research contacts or Oxfam has country programmes or affiliates, to build
up a unique perspective on the extent to which governments are tackling the growing gap
between rich and poor in three key policy areas. This year’s Index has seen significant changes
in methodology from 2017, including new indicators on tax avoidance and on gender-based
violence.

The CRI Index was reviewed by the Joint Research Centre of the European Commission in both
2017 and 2018. Following the 2017 review, several adjustments were made to match best
practice in constructing composite indicators. A number of refinements along the 2018 review
are in the pipeline for next year's version. Thereafter, both indexes were statistically audited. In
2018, the JRC concluded that the CRI is robust statistically and is ‘paving the way towards a
monitoring framework that can help identify weaknesses and best practices in governments’
efforts to reduce the gap between rich and poor’. The 2017 audit is available
at https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620316/tb-cri-index-
statistical-audit-170717-en.pdf;
The 2018 audit is available at: http://policy-practice.oxfam.org.uk/publications/the-

commitment-to-reducing-inequality-index-2018-a-global-ranking-of-government-620553
The CRI Index measures government efforts in three policy areas or ‘pillars’: social spending,
taxation and labour. These were selected because of widespread evidence6 that government
actions in these three areas have in the past played a key part in reducing the gap between rich
and poor.
1. Social spending on public services such as education, health and social protection has been
shown to have a strong impact on reducing inequality, particularly for the poorest women and
girls who are the most dependent on them. For example, a study of 13 developing countries
that had reduced their overall inequality levels found that 69% of this reduction was because of
public services.7 Social spending is almost always progressive because it helps reduce
existing levels of inequality. Despite this, in many countries, social spending could be far more
progressive and pro-poor. Social spending can play a key role in reducing the amount of
unpaid care work that many women often do – a major cause of gender inequality – by
redistributing child and elder care, healthcare and other domestic labour.8
2. Progressive taxation, where corporations and the richest individuals are taxed more in
order to redistribute resources in society and ensure the funding of public services, is a key
tool for governments that are committed to reducing inequality. Its potential role in reducing
inequality has been clearly documented in both OECD countries9 and developing
countries,10 and highlighted recently by the International Monetary Fund (IMF) in its October
2017 Fiscal Monitor.11 However, taxation can be progressive or regressive, depending on the
policy choices made by government. Equally, a belief that taxation is gender-neutral has led
to a lack of attention to how taxes levied have increased the gender gap. The ability of
countries to collect progressive taxes is also undermined by harmful tax practices which
facilitate tax dodging.
3. There is strong evidence that higher wages for ordinary workers and stronger labour
rights, especially for women, are key to reducing inequality.12 Governments can have a
direct impact here by setting minimum wages and raising the floor of wages; they can also
have an indirect impact by supporting and protecting the right of trade unions to form and
organize. Evidence from the IMF and others shows that the recent decline in trade union
organization has been linked to the rise in inequality, as workers lose bargaining power and
more of the value of production goes to profits and the owners of capital.13 Women are
disproportionately represented in the lowest-paid jobs, with poor protection and precarious
conditions of employment.14 Governments can help correct this by passing and enforcing
laws against discrimination and violence against women, and laws that promote equal pay
and parental leave.
Actions across all three areas are mutually reinforcing. While progressive taxation is a good
thing in itself, its impact is greatly increased when used for progressive spending, and the CRI
Index reflects this in the scoring of countries’ efforts.
Clearly, tackling inequality requires other policy interventions: but, like the UN’s Human
Development Index (HDI), the three critical variables – action on social spending, taxation and
labour – can arguably be used as a proxy for a government’s general commitment to tackling
inequality.

Why monitor government policy? Why not just monitor levels of inequality?
There are three reasons why DFI and Oxfam have chosen to measure the commitment of
governments to reducing inequality.
First, in 2015 governments across the world made a commitment to reduce inequality and
eradicate poverty through the Sustainable Development Goals (SDGs) and specifically Goal 10
on reducing inequality. Goal 10 will be reviewed in 2019, and the CRI Index will contribute to
this in enabling citizens to hold governments to account for their progress or lack of it.
Second, DFI and Oxfam strongly believe that the different levels of inequality that exist from one
national context to another show that inequality is far from inevitable; rather, it is the product of
policy choices made by governments. There are, of course, contextual challenges to consider in
every situation, as well as contextual advantages in some cases. All countries are also subject
to global forces that they cannot fully control (e.g. pressure to reduce wages and tax rates), and
this is particularly true of developing countries. The worldwide system of tax havens, which
undermines scope for government action, is a clear example.
Nevertheless, despite these global issues, DFI and Oxfam believe that governments have
considerable powers to reduce the gap between rich and poor women and men in their
countries. If this were not the case, there would not be so much variation in the policy actions of
different countries. Therefore, it is vital to be able to measure and monitor government policy
commitments to reducing inequality.
The final reason for developing the CRI Index is that existing systems to measure incomes and
wealth (e.g. national household surveys) collect data infrequently and contain major data errors
– notably under-reporting of the incomes and wealth of the richest people.15 This means that the
data are very weak and rarely updated, especially for the poorest countries, so they are a poor
measure by which to hold governments to account. There is a need for urgent and significant
improvements in both the coverage and frequency of national data on levels of inequality.
The relationship between the CRI findings and the level of inequality in a given country was
discussed at some length in last year’s report.16 In short, there was no automatic relationship,
but a more complex one. Some countries, like Namibia, have very high levels of inequality but
are strongly committed to reducing them. Others, like Nigeria, have high levels of inequality and
are failing to do anything about it. Other countries, like Denmark, have relatively low inequality
levels because of policies they have followed in the past but which they have increasingly
stepped away from, which is now leading to an increase in inequality. This is true for most high-
income, low-inequality countries. However, others, like Finland, remain committed to keeping
inequality levels low.

METHODOLOGY IMPROVEMENTS TO THIS YEAR’S
INDEX
Figure 1: The CRI 2018 pillars and indicators
The first edition of the CRI was launched in July 2017, covering 152 countries (CRI 2017). It
was published deliberately as a ‘beta’ version, and comments were sought from experts across
the world. These invaluable inputs have led to some significant refinements to the Index this
year (CRI 2018). The core methodology remains unchanged, focusing on the three pillars of
spending, tax and labour. Nevertheless, at a more detailed level there have been some
important additions and changes.17
The most significant change is the inclusion of three new sub-indicators, one in the tax pillar and
two in the labour pillar. One of the concerns voiced by many who commented on the Index last
year was that we had not considered the extent to which a country was enabling companies to
dodge tax. This meant that countries like Luxembourg or the Netherlands were getting higher
scores than they should. The negative role played by the Netherlands as a corporate tax haven
has become a hot topic in the country and Oxfam and allies are putting pressure on the
government to take clear steps to stop this.18 This year we have added a new indicator on
harmful tax practices (HTPs) to address this.
In the labour pillar, many suggested that women’s labour rights are fundamentally undermined
by violence and harassment against women at work.19 Working women can sometimes
experience greater levels of domestic violence in response to greater economic autonomy. 20 In
India for example, 6% of women (15–49 age group) have experienced spousal sexual violence
in their lifetime, with 5% experiencing this type of violence in the past 12 months.21 This has led
to new indicators on the quality of laws against sexual harassment and rape. 22
In addition to these new indicators, there has been a lot of detailed work on improving data
sources, ensuring that we are using the most up-to-date sources. Across all pillars, major
progress has been made on including more recent data. In CRI 2018, virtually all tax and labour

data are for 2017, compared with 2015 in CRI 2017. The average years for education and
health spending data have improved from 2014 to 2016, and for social protection from 2012 to
2015. The cut-off for data for this year’s Index is the end of 2017, so any policy changes from
2018 are not included, although we do refer to some of the more notable ones in the text. We
have also managed to add five new countries this year, bringing the total to 157.23
These changes to the methodology and improvements in the quality of data mean that a straight
comparison between the scores of a country this year and last year may not give an accurate
picture of its performance. Countries’ movements up and down in terms of their scores are the
result of a combination of changes in their policies and changes to the methodology of the
Index.
For this reason, our analysis does not focus on simple comparisons of the scores for countries
between CRI 2017 and CRI 2018. However, it is possible to compare concrete policy changes
between the two editions of the CRI Index; for example, increases in health spending, or cuts to
the top rate of personal income tax, or increases in maternity leave; so we have highlighted
these. We also look at some of the key overall trends emerging since the first CRI Index.
WHAT ARE THE MAIN FINDINGS OF THE CRI INDEX?
All countries could do more, even those near the top
The first and most important point is that no country is doing particularly well, and even those at
the top of the listings have room for improvement. Even the top performer, Denmark, does not
get a perfect score and could be doing more. Furthermore, 112 of the 157 countries included in
the Index are doing less than half of what the best performers are managing to do.
WHICH COUNTRIES ARE DOING BEST?

The full CRI rankings, along with regional rankings, can be found in Annex 1 of the full report.
The top 10 performers in this year’s Index are highlighted in Table 1.
Table 1: CRI Index ranking out of 157 countries – the top 1024

Box 1: The best and the worst
Denmark tops this year’s CRI Index with the highest score. The northern European
country has some of the most progressive taxation policies in the world. It also has some
of the best labour market policies, and its protection of women in the workplace is the best
in the world.
Nigeria has the unenviable distinction of being at the bottom of the Index for the second
year running. Its social spending (on health, education and social protection) is shamefully
low, which is reflected in very poor social outcomes for its citizens. One in 10 children in
Nigeria does not reach their fifth birthday,25 and more than 10 million children do not go to
school.26 Sixty percent of these are girls.27 The CRI Index shows that in the past year
Nigeria has seen an increase in the number of labour rights violations. The minimum wage
has not increased since 2011. Social spending has stagnated. The CRI Index shows that
there is still significant potential for Nigeria to raise and collect more tax,28 so it scores very
badly on this aspect too. There have however been very recent improvements in this area
in 2018, which will show up in next year’s CRI. The IMF has given clear advice on the
importance of tackling inequality, referring to Nigeria’s score in the CRI Index. 29 The
president of the country has also said that tackling inequality is important, as inequality
leads to political instability.30 Yet little has been done.
Most of the countries near the top of the index are OECD countries, headed this year by
Denmark. In this way, the rankings are similar to those of the HDI. With more national wealth,
these countries have much more scope to raise progressive tax revenues because there are
more citizens and corporations with higher incomes that can pay more tax; likewise, they have
greater scope to spend those revenues on public services and social protection. The leading
countries are also trying to tackle wage inequality by increasing the minimum wage and
supporting labour rights and women’s rights. Finally, they have a smaller informal sector than is
typical in developing countries, although precarious forms of employment are on the increase.
For most rich countries, the main body of policies measured by the Index was introduced in a
different period of history, when significant action in these areas was broadly accepted as the right
thing to do and paid dividends in terms of social and economic progress. Today, however, in many
rich countries, political support for these measures has eroded, with governments across the
industrialized world chipping away at progressive spending, taxation and labour rights (see Box 4).
Most of the highest-ranked non-OECD countries in the CRI are in Latin America, the most unequal
region in the world (see Box 3). They are headed by Argentina, followed by Costa Rica and
Brazil. In the last decade, in all of these countries, governments have made strong efforts to
reduce inequality and poverty through redistributive expenditure and (in some) by increasing
minimum wages. In Argentina, for example, the Gini coefficient fell from 0.51 in 2003 to 0.41 in
201331 and the poverty rate fell from 23% to 5.5%, with 40% of the reduction in inequality and 90%
of the reduction in poverty due to redistributive policies.32 Unfortunately, however, the new
governments in Brazil and Argentina have already moved to reverse many of these policies. In
Brazil social spending has been frozen for the next 20 years.33 In Argentina, government
austerity34 has led to sweeping cuts in the social protection budget (see Box 3).35
Lower-middle-income countries (LMICs) can also show strong commitment to reducing

inequality. The CRI 2018 shows that Lesotho, for example, spends 14% of its national budget
on education and 12% on health, and has a progressive tax structure as well as progressive
policies on trade unions and women’s labour rights; Georgia has strong and progressive social
spending and progressive tax collection and has implemented big increases in education
spending. Low-income countries can also demonstrate strong commitment to tackling
inequality. For example, since the 2017 CRI, Ethiopia has increased its budget for education to
23% from 22%, the sixth highest proportion in the world. This continued high investment has
seen the numbers of children going to school increase dramatically. 36

Namibia remains one of the highest-ranked African countries in the Index and is fifth among the
middle-income countries. It is a good example of the difference between a country’s CRI
ranking and traditional measures of inequality. Despite being one of the most unequal countries
in the world, its high CRI score reflects the commitment of the Namibian government to reducing
inequality, particularly through its high levels of social spending (with secondary education free
for all students) and some of the most progressive taxation policies. Its commitment has been
recognized by economist Joseph Stiglitz and others and, although inequality remains very high,
it has been continually reducing inequality since 1993 and is no longer the world’s most unequal
country.37 Since CRI 2017, the government has increased spending on social protection and
has also increased the minimum wage substantially, and a new study has shown that its
taxation and spending policies are reducing inequality significantly. 38
WHICH COUNTRIES HAVE IMPROVED THEIR

PERFORMANCE SINCE LAST YEAR?
While we cannot make a general comparison of last year’s rankings with this year’s, due to
improvements in methodology, we have been able to carry out a detailed analysis of countries
that have made significant positive or negative policy moves. The most positive story this year
across all three pillars is from South Korea.
Box 2: Showing real commitment to reduce inequality – South Korea
President Moon Jae-in took office in early 2017, promising to tackle inequality in South
Korea. The country’s inequality levels have been increasing rapidly. Over the past two
decades the income growth of those at the bottom has stagnated while the top 10% have
seen their incomes grow by 6% each year, so that they now lay claim to 45% of national
income.39 South Korea comes second to bottom of the OECD countries in the CRI Index.
To pursue a reduction in inequality and an increase in inclusive growth, President Moon
has acted in all three areas measured by the Index. He has committed to dramatically
increasing the minimum wage and in his first year in office has delivered, increasing it by
16.4%.40
He has also increased taxation on the most profitable and largest corporations in South
Korea, raising their corporate income tax (CIT) rate from 22% to 25%, which is expected to
raise revenues of US$2.3bn annually.41 He has also raised income tax for the highest
earners, a move that had the support of 86% of Koreans.42
Finally, he has embarked on a programme of expanded welfare spending. South Korea
has some of the lowest welfare spending in the OECD.43 President Moon has increased
spending, including provision for a universal child support grant.44
In an address to the UN General Assembly on 21 September 2017, President Moon
stated: ‘As of now, my Administration is pursuing bold measures to change the economic
paradigm in order to deal with economic inequalities that stand in the way of growth and
social cohesion…. This is what we call a “people-centered economy”.’45
The CRI 2018 also shows that there are quite a number of other governments which have taken
clear steps in one or more of the CRI Index policy areas since the CRI 2017, demonstrating that
progress is possible. Indonesia stands out for its moves to increase the minimum wage
substantially and to equalize it across the country, and in its move to increase spending on
health, to help finance the move towards universal health coverage (UHC), although at 7% of
the government budget, Indonesia still needs to increase this substantially in the coming years
to deliver health for all. Mongolia and Guyana have substantially increased income tax for high
earners, and Mali and Colombia have increased taxes on corporates significantly. Colombia

has also increased health spending, although the privatization of the health system and
corruption scandals undermine the value of this increase.46 Colombia has also extended
maternity leave. Mozambique has increased maternity leave by 50%.
Iceland has given social protection a big increase and has passed a law requiring companies to
obtain official certification that they are paying women and men the same.47 Guinea and Liberia
have both increased education spending significantly, although in the case of Liberia this is
likely to be linked to its controversial moves to privatize primary education. 48
The new president of Sierra Leone, Julius Maada has made some promising steps to tackle
inequality. The minimum wage has been increased, as has personal income tax, and new steps
taken to improve tax collection, including cracking down on unnecessary tax incentives. His
recent move to make primary education free is particularly encouraging. 49
WHICH COUNTRIES ARE DOING WORST?

Table 2: CRI Index ranking out of 157 countries – the 10 countries at the bottom of the
Index
The degree to which rich OECD countries are using government policy to tackle inequality
varies dramatically. The USA and Spain among the major economies, for example, are much
further down the list of rich countries in the CRI Index
As this report highlights, many middle-income countries (MICs) have the scope to do far more to
tackle inequality than they are doing currently. For example, Indonesia today is richer in terms
of per capita income than the USA was when it passed the Social Security Act in 1935. 50 Yet
Indonesia has some of the lowest tax collection rates in the world, at just 11% of gross domestic
product (GDP); the new finance minister has made increasing this her priority.51 Recently, a
paper from the Center for Global Development demonstrated that most developing countries
could if they chose raise enough resources of their own through tax to eliminate extreme
poverty.52 This also echoes Oxfam’s previous research into inequality in the BRIC countries,
Turkey and South Africa.53
India also fares very badly, ranking 147th out of 157 countries on its commitment to reducing
inequality – a very worrying situation given that the country is home to 1.3 billion people, many
of whom live in extreme poverty. Oxfam has calculated that if India were to reduce inequality by
a third, more than 170 million people would no longer be poor. 54 Government spending on
health, education and social protection is woefully low and often subsidizes the private sector.55
Civil society has consistently campaigned for increased spending.56 The tax structure looks

reasonably progressive on paper, but in practice much of the progressive taxation, like that on
the incomes of the richest, is not collected. On labour rights and respect for women in the
workplace India also fares poorly, reflecting the fact that the majority of the labour force is
employed in the agricultural and informal sectors, which lack union organization and
enforcement of gender rights.
Box 3: Latin America – making a wrong turn57
In the past 15 years, Latin America as a region has bucked the trend in terms of reducing
inequality. Although there are, of course, some exceptions, governments in Brazil,
Uruguay, Bolivia, Ecuador and other countries had put in place strong policies to tackle
inequality, mostly by increasing public revenues and social spending and, in some
countries, raising minimum wages. This is reflected in the CRI Index, with a number of
Latin American countries ranking relatively highly.
However, the global economic slowdown since 2010 and the fall in commodity prices (on
which many countries in the region depend) has led to an increase in poverty rates since
2015. In some countries this has combined with a shift of government towards the centre-
right, with less interest in reducing inequality. As a result, inequality reduction is already
slowing.
The impact of these policy changes is yet to show up in the data. Our data for this year for
the Latin America region is 2015, so before these cuts had taken effect. They will show up
in subsequent iterations. Countries taking regressive actions are likely to begin to slip
down the Index unless they make further policy changes, and will start to show contrasts
with those countries in Latin America which remain on a progressive path.
These are just some of the many stories behind the numbers in the CRI Index. There is, of
course, a story for every country, and we encourage readers to share them with us.58
Which countries have got worse since last year?
Singapore is now in the bottom 10 countries in the world in terms of reducing inequality. This is
partly because of the introduction of the new indicator on harmful tax practices, because
Singapore has a number of these.59 It has increased its personal income tax (PIT) by 2%, but
the maximum rate remains a very low at 22% for the highest earners. Apart from tax, its low
score is also due to a relatively low level of public social spending – only 39% of the budget
goes to education, health and social protection combined (way behind South Korea and
Thailand at 50%). On labour, it has no equal pay or non-discrimination laws for women; its laws
on both rape and sexual harassment are inadequate; and there is no minimum wage, except for
cleaners and security guards.
Hungary this year more than halved its corporate tax rate to just 9%, the lowest in the
European Union. Violations of labour rights have increased, and social protection spending has
fallen. Croatia and Egypt both cut their maximum rates of personal and corporate income tax.60
Mongolia had the highest cut in social protection spending. It has recently been forced by the
IMF to end its universal child benefit, so further cuts could well be on the way. 61 The
Democratic Republic of Congo (DRC) has also cut both education and health spending.

WHAT ARE SOME OF THE OVERALL TRENDS
EMERGING FROM THE NEW CRI INDEX?
Overall, the average proportions of government spending going to the three key anti-inequality
social sectors have risen marginally since CRI 2017, from 43.15% to 43.22% of total spending.
The countries increasing their spending the most were Guinea, Georgia, Mauritania, Saint
Lucia, São Tomé and Príncipe, Angola, Ukraine, Kazakhstan, Liberia, Indonesia and South
Korea. In the OECD, key upward movers were Iceland, Portugal and Slovenia.
• Spending on education has risen from an average 14.7% to 14.8% of government budgets.
Significant increases were registered by Georgia, Saint Lucia, Guinea, Saint Vincent and
the Grenadines, the Dominican Republic, Liberia, Uruguay, São Tomé and Príncipe, Bhutan
and Cameroon. DRC, Vanuatu and Singapore saw some of the biggest decreases.
• Spending on health has risen from 10.36% to 10.6% of budgets, with significant increases
by Kazakhstan, Colombia, Lithuania, Georgia, São Tomé and Príncipe, Thailand, Niger,
Jamaica, Lao PDR and Indonesia. Australia and DRC were among the biggest cutters of
health spending.
• Spending on social protection appears to have stayed broadly the same at 18.5% on
average. Within the OECD, Iceland, Australia, Cyprus, Latvia and Portugal have increased
their spending. Since the installation of their new governments, South Korea and Indonesia
have also considerably increased their social protection spending. China, Mongolia and
Serbia saw some of the biggest decreases in spending.
The top 10 spenders and cutters in each area of education, health and social protection can be
found in section 1 on social spending.
The impact of spending on inequality has also increased somewhat, potentially reducing the
average national Gini score by 18%, compared with 17.7% in CRI 2017.62
There has also been mixed progress on making taxation more progressive:
• On value added tax (VAT), a few countries reduced rates last year (Brazil, Romania and
Trinidad), but just as many increased them (notably Colombia and Sri Lanka). In addition, a
few countries, such as Burkina Faso and Senegal, made VAT exemptions more pro-poor,
and Cambodia increased its minimum threshold for paying VAT, leaving out small traders.
Overall, average rates fell slightly to 15.5%.
• On corporate income tax, global average rates fell very slightly, from 24.65% to 24.48%.
Although 15 countries cut their CIT rates in 2017 compared with only 10 raising them, some
of these cuts were limited to smaller companies (e.g. in Australia) which can be positive,63
and most cuts were relatively small at under 2.5%. Those cutting rates tended to be more
frequent in economically significant countries.64 Hungary stands out as the worst performer
for having cut CIT to 9% from 19%, but several other countries have gradually been
introducing cuts over the last 4–8 years, resulting in major reductions over time in Israel,
Norway, Pakistan, Spain and the UK. On the other hand, Colombia, Mali, Jordan, Greece
and Peru were among those increasing. However, these changes are dwarfed by the USA’s
2018 federal rate cut from 35% to 21%. This change will appear in next year’s CRI, and the
key question will be whether many countries will follow suit (so far, based on 2018 tax
codes, the opposite seems to be the case, with only Argentina and Belgium cutting CIT, and
Burkina Faso, Ecuador, South Korea, Latvia and Taiwan increasing their rates).
• On personal income tax, average top rates rose very slightly from 30.5% to 30.8% in
2017. Governments increasing top rates in 2016–17 included Mongolia, Guyana, Uruguay,
Austria, South Africa, Jamaica and Zambia. On the other hand, Chile, Croatia and Egypt all
cut their top rates. Countries increasing rates in 2018 (not represented in this year’s Index,

but will be in next year’s) include Barbados, Colombia, Ghana, South Korea, Latvia (which
has moved from a flat to a progressive tax structure), the Philippines and Sri Lanka. There
are still two countries with no CIT or PIT (Bahrain and Vanuatu) and two others with no PIT
(Maldives and Oman), all of which therefore have highly regressive tax systems.
However, at the same time as tax rates have been rising, effectiveness in collecting the more
progressive income taxes has been falling. Tax collection effectiveness as measured by
productivity has fallen by around 3%. On the other hand, countries such as Luxembourg, Togo,
Fiji, Japan, Bolivia and Ukraine managed to increase their tax collection considerably in 2017.
Because of this weaker collection, the impact on inequality, or incidence of taxes has also
fallen, so that taxes are likely to be reducing inequality by only 2.7%, down from 3.5% last year.
Clearly a lot more could be done to improve the inequality-reducing impact of taxation. More
positively, though, countries like Morocco, China and Ukraine have also managed to make their
tax collection less regressive, by collecting more of the progressive taxes and less of the
regressive ones.
On labour, much remains unchanged, but there have been positive changes on minimum
wages since last year:
• On labour rights, the Global Labour University reports that there has been a small
improvement in country scores from 4.107 to 4.165 on its scale of 1 to 10. 65 This is due
almost entirely to countries that have reduced the number of legal violations of trade union
and worker rights. On the other hand, virtually no countries have improved their laws and
none of the countries which ban independent trade unions has changed its laws (Belarus,
China, Equatorial Guinea, Eritrea, Iran, Iraq, Lao PDR, Libya, Qatar, Saudi Arabia, Sudan,
Syria, Turkmenistan, UAE, Uzbekistan, Vietnam).
• As for women’s rights at work, relatively few countries – only Barbados, Liberia and
Lithuania – have introduced stronger anti-discrimination and equal pay laws since 2015.
This still leaves 27 and 23 countries respectively without such laws. Unlike general labour
rights, there is no global system for measuring whether such laws (and the laws measured
in the new CRI 2018 indicator on violence against women) are actually being implemented
and are improving women’s lives.66
• There has been much more progress on parental leave, with improvements in at least 13
countries. Notable among them are Bhutan and India, which doubled both maternity and
paternity leave in 2016 and 2017 respectively; Mozambique, which increased maternity
leave by 50%; and Paraguay, which will increase the proportion of prior salary paid from
75% to 100% from November 2018. Colombia, the Dominican Republic and Israel have
increased maternity leave by small periods (although for the Dominican Republic this has
taken 15 years since ratifying the relevant ILO convention), Cyprus has introduced 14 days’
paternity leave and compared with 2016, Spain more than doubled paternity leave to 35
days in 2017, adding one more week in 2018. New Zealand is gradually increasing
maternity leave from 18 to 26 weeks by 2022, and there are ongoing parliamentary efforts in
Guyana and the Philippines to reach the same levels. There are still five countries (Lesotho,
Papua New Guinea, Suriname, Tonga and the USA) that have no statutory paid parental
leave for all employees.
• More than half of countries have increased their minimum wages more rapidly than per
capita GDP. The most dramatic increases include those in Korea and Indonesia (which
have increased the minimum wage by 16% and 9% respectively) and in Burkina Faso,
Madagascar, Mali, the Gambia, Kiribati, Sierra Leone, Timor-Leste, Ecuador, El Salvador
and Costa Rica. A few OECD countries have also increased minimum wages considerably:
Portugal, Malta and Japan. Other countries are taking dramatic steps to change their
systems: Indonesia is trying to equalize wages by increasing them more rapidly in poorer
regions, Austria supplemented its industry-specific bargaining with a nationwide minimum
wage last year, and India introduced a nationwide floor to try to limit regional divergences.
Other countries are in the process of introducing national minimum wages (e.g. South
Africa, planned for 2019 and its content remains hotly debated) or least for some sectors
(e.g. Cambodia for the textiles sector). This puts pressure on countries which do not yet
have minimum wages (like Djibouti, South Sudan) or which limit them to specific sectors
(Cambodia, Saint Lucia, Singapore, Tonga, Jordan).
In addition to these trends since last year, the following general conclusions made in 2017 still
stand:
• Many countries are doing relatively well on the scale of social spending. The overall average
for all 157 countries is that they are spending more on social protection (18% of budgets
overall) than on education (14.8%) or health (10.6%). The average spending levels for
education and health are still well below the political commitments to which many countries
have signed up, as part of the Abuja and Incheon Declarations (20% and 15%
respectively).67 In most low- and lower-middle-income countries, social protection spending
also remains well below the levels needed for basic social protection floors, as estimated by
the Bachelet Commission (3–5% of GDP).68 Most countries across the world still need to
increase their spending on all three sectors dramatically.
• Many countries are doing rather poorly in ensuring that their social spending benefits their
poorest citizens more than the wealthy and thereby reduces inequality. In 85 of the countries
analysed, social spending is reducing the Gini coefficient by less than one-tenth. Countries
need to do much more to ensure that their social spending reaches the poorest citizens
through universal, free public provision, which is the best way to reduce inequality
• On tax, corporate taxes have fallen slightly from last year’s CRI to this year’s, and a number
of economically significant countries have already made – or are planning to make – cuts to
their corporate tax rates, as the broad pattern of the race to the bottom on corporate tax
rates continues. Personal income taxes have risen a little, but the long-term trends are
unclear. Reversing the race to the bottom means making both PIT and CIT more progressive
and ensuring higher rates of collection from richer individuals and companies. Rates of the
much less progressive VAT have stopped rising, having reached high levels in many
countries. It remains to be seen whether the huge income tax cuts announced in the USA’s
2018 budget will provoke a round of copycat measures elsewhere. It remains essential in
many countries to ensure that rates of progressive taxes are higher, and to make VAT less
regressive by exempting basic foodstuffs and small traders.
• Most countries are also doing very poorly on collecting personal and corporate income taxes,
with collection levels averaging well below 15%, compared with 40% for VAT. To improve
the impact on inequality, countries need to collect a much higher proportion of their potential
corporate and personal income taxes, by clamping down on exemptions for large
corporations and deductions for rich individuals, renegotiating tax treaties and ending the era
of tax havens.
• On labour, the average minimum wage is only just over half of national GDP per capita. Over
80% of the 157 countries have laws mandating equal pay and non-discrimination in hiring by
gender (a much higher figure than last year due to new primary research); but only 45% and
40% respectively have adequate laws on sexual harassment and rape, and these gender
equality laws are poorly enforced in almost all countries. Countries are only scoring 6.4 out
of 10 (on average) on the CRI labour rights indicator, with a much lower score on
enforcement than on the existence of laws. In addition, across the world, 8% of the
workforce have no labour rights because they are unemployed, while 38% often have
minimal labour rights because they work in the informal sector. A further 35% have reduced
rights due to non-standard employment contracts. Countries need to increase their minimum
wages, reinforce gender equality laws, implement labour rights laws much more rigorously
and extend labour rights and minimum wages to employees on non-standard contracts.

The patterns vary dramatically for countries with different levels of income.
• Developing countries are spending 16% of their budgets on education, compared with only
12% among OECD countries. However, the lower a country’s income, the less it spends on
health (8% for low-income countries compared with 15% for OECD countries) and on social
protection (7% for low-income countries compared with 37% for OECD countries).
• Developing countries (especially low-income countries (LICs)) often have a more
progressive tax system on paper than OECD countries because of VAT exemptions for basic
goods and small traders, and higher corporate tax rates. Nevertheless, OECD countries
reduce inequality more effectively because they are better at collecting income taxes. There
are different priorities here for different countries, according to their level of income:
developing countries (especially MICs) should collect more personal and corporate income
taxes; OECD countries need to improve their tax structures (enhance pro-poor exemptions
from VAT and reverse the race to the bottom on corporate tax rates); and OECD countries
and upper-middle-income countries (UMICs) must end harmful tax practices that affect the
ability of other countries to collect corporate taxes.
• OECD countries generally score much higher than developing countries on labour and
gender rights – especially on the existence of relevant laws and paid parental leave. On the
other hand, low-income countries perform best on statutory minimum wages, due to far-
sighted minimum wage increases by a small number of governments (albeit potentially
undermined by poor enforcement). A large number of developing countries still need to
adopt and enforce laws guaranteeing labour and gender rights, while many OECD and
middle-income countries need to focus on increasing minimum wages.
LIMITATIONS OF THE CRI INDEX

The CRI Index can only ever be a simple tool that gives one measure of how countries are
fighting inequality. The subsequent sections discuss the specific limitations of each of the three
pillars, but there are also some overall limitations that are worth mentioning here.
What is clear is that the Index can never substitute for context-specific knowledge and the story
of each country’s path to reducing inequality, or for detailed analysis of each government’s
proposals or positions. Wherever possible, DFI and Oxfam have worked with colleagues in each
country to ensure the most accurate representation of their government’s efforts, and in many
countries Oxfam continues to work on detailed country reports on inequality that are far more
comprehensive. In the online tool accompanying the Index, many countries have added
additional narrative sections with links to the work they are doing to combat inequality at country
levels.
Nevertheless, in a broad index such as this, some individual countries may be unfairly praised
(see Box 4), while others may be unfairly penalized. But on balance, DFI and Oxfam consider
that the Index provides a strong foundation from which to gauge the commitment of a
government to tackle the inequality crisis.

Box 5: Trading on past glories – when is commitment not commitment?
DFI and Oxfam have called this index the Commitment to Reducing Inequality (CRI) Index
because we want to highlight the purposeful and proactive role that committed
governments can play in tackling inequality. Nevertheless, this is not without its problems.
Although we use the most up to date data we can, it can mean that some governments
may be receiving credit for commitments based on policies or approaches developed by
previous administrations. In some cases, current governments actively oppose these
policies and are seeking to undo them.
In a significant number of rich countries, many of the policies that have seen them perform
well were actually put in place in a previous era and are now under serious threat. In the
UK, for example, while the key hallmarks of the welfare state such as the National Health
Service remain in place and contribute to a relatively good ranking, recent governments of
all parties have been nervous about reducing inequality as a specific aim of government.69
Some analysts have highlighted how current tax policies and the recently introduced cuts
to welfare benefits will significantly contribute to a forecast increase in inequality.70
Denmark comes top of our Index, based on its high and progressive taxation, high social
spending and good protection of workers. However, recent Danish governments have
focused on reversing all three of these to some extent, with a view to liberalizing the
economy, and recent research reveals that the reforms of the past 15 years have led to a
rapid increase in inequality of nearly 20% between 2005 and 2015. 71 Germany’s
longstanding welfare institutions significantly reduce inequality. However, since the early
1990s, income gains have predominantly gone to those earning more, leading to increases
in the level of income inequality before redistribution by the state. Regressive tax reforms
over the last 20 years have in turn diminished the redistributive impact of government
policy.72 Together, these factors have led to growing inequality. The French government is
progressively tumbling down in the tax ranking following its tax reform in 2017, taking the
corporate tax down from 33% to 28%. Further cuts should occur soon, with the corporate
tax rate progressively being taken down to 25% by 2022. Together with the removal of the
wealth tax and the increase of regressive taxes, this tax reform in France illustrates the
global trend towards more regressive tax systems. This will be reflected further in the next
iteration of the Index as the impact on revenues is felt.
Equally, across Latin America, new governments have been elected that are not as
committed as their predecessors to reducing inequality and are even (in some cases)
taking steps to reverse progressive policies.
Nevertheless, the majority of the data that have been collected for the Index are recent and
are based on budgets, which means that the Index can be updated each year, with
countries moving up or down the rankings depending on changes in their policies. If a
country substantially increases the minimum wage or boosts education spending in the
next budget, then it will be rewarded with an increased CRI Index score. Over time, this will
enable a more accurate assessment of the commitment of governments.
The CRI Index focuses mainly on redistributive actions that governments can take, rather
than those that would prevent rising inequality in the first place. While it looks at how a
government can intervene to make the labour market fairer, it does not, for example, look at
corporate governance (to reduce excessive shareholder control of the economy), land
redistribution or industrial policy as ways to ensure greater equality. The situation in countries
such as South Africa, which has rising levels of inequality despite a relatively good score on the
Index, can only be explained by looking at these structural issues. Oxfam’s recent papers, An
Economy for the 99%,73 and Reward Work, Not Wealth74 also address these issues directly. 75
Data constraints have prevented the inclusion of these structural policies and many
other suitable indicators, because the Index has aimed to cover the largest group of countries
possible. Many potential indicators have not been used because they do not extend beyond a

small range of countries, usually those with higher incomes. A massive, concerted effort to
improve data on inequality and its contributing factors is urgently needed, especially within
poorer countries. Gender-disaggregated data are also essential. Later in this report is a
discussion of some other areas that the Index might explore in subsequent versions.
Finally, the CRI Index does not aim to cover all actors in the fight against inequality.
Other key players – notably the private sector and international institutions such as the World
Bank and the IMF – have an important role to play, as do rich individuals. However, while
Oxfam’s campaigns and those of its allies target all of these actors, governments remain the
key players. Democratic, accountable government is the greatest tool for making society more
equal, and unless governments across the world do much more in these three policy areas,
there will be no end to the inequality crisis.
AREAS FOR IMPROVEMENT AND FURTHER

DEVELOPMENT
Economic inequality and gender
Within each of the three areas – spending, tax and labour rights – action to combat economic
inequality overlaps significantly with action to combat gender inequality. Gender inequality is
exacerbating the growing gap between rich and poor, while growing inequality is in turn making
the fight for gender equality harder in countries across the world. Oxfam has shown in its recent
papers76 that the fight against economic inequality is inextricably linked with the fight against
gender inequality. Women are hardest hit by regressive taxation and by low or regressive public
spending, and they are consistently among the worst paid in the most precarious jobs, while
both laws and social conventions limit their ability to organize for their rights. They also provide
the majority of unpaid care work and so are most affected when public services are
inadequately funded, further entrenching inequality.
Each section of this report has specific sections on gender. Sadly, the availability of data allows
for specific indicators only in the labour pillar. This year we have added two more indicators to
this pillar, so it now has indicators on parental leave and legal protections for equal pay, gender
discrimination, sexual harassment and rape. While there are datasets with gender-related
statistics available (such as the World Bank’s Women, Business and the Law database and the
OECD’s Social Institutions and Gender Index), unfortunately we were not able to use some or
all of the data due to issues with their reliability and age, nor could we carry out an exhaustive
corroboration of the gender indicators with our country programmes for this version of the Index
due to time constraints. There are also not currently enough reliable data for enough countries
to look at either spending or taxation from a gender perspective for the purposes of this Index.
Only relatively few countries have engaged in sustained gender budgeting, so no overall
comparative assessment is possible of the degree to which tax and spending policies fight
gender inequality, although the benefits of gender budgeting are well documented.
However, there are upcoming initiatives to close the gender data gap, whose data may be used
to bolster future iterations of the CRI Index. For example, UN Women is helping to collect data
related to gender-responsive budgeting, specifically on the SDG indicator that tracks public
allocations for gender equality and women’s empowerment. They are also working with the
United Nations Statistics Division on the Evidence and Data for Gender Equality (EDGE)
initiative to improve the integration of gender issues in statistics. Oxfam strongly supports efforts
to increase both gender-responsive budgeting and the collection of gender-disaggregated data,
as the gender data gap can prevent countries from understanding the effects of inequality on
women and girls, leading to the creation of programmes and policies that are gender-blind and
ultimately further reinforcing gender inequality.

Economic inequality and youth
Inequalities between young men and women and older generations are growing across the
world. The major accumulation of wealth to those at the top of the income spectrum has created
a difficult present and an uncertain future for the majority of today’s youth. Extreme economic
inequality has been shown to inhibit social mobility,77 which means that the children of poor
parents will stay poor themselves. Unless they come from privileged backgrounds, in many
countries young people have fewer opportunities to make the most of their skills and talents,
because of the huge and growing gap between rich people and everyone else.
Young women and men both face significant, though often very different, hurdles. Race, age,
gender and other inequalities intersect to reinforce the barriers that confront young people. For
example, where education is not freely and widely available, young women are more likely to
lose out, and the public services that young women particularly need, including family planning
services, are chronically underfunded, making it harder for them to escape poverty. Young men
and women – as in the USA, for example – can have their ability to ascend or hold their place
on the economic ladder affected by factors beyond their control, like racial discrimination. Young
men are much more likely to die violently,78 often at the hands of the police. In a study by the
Equality of Opportunity Project, researchers found that American Indian and black youth have a
much higher rate of downward mobility compared with other races, even those who had initially
started at a higher socio-economic level.79
Progressive social spending and taxation can counter the growing inequality between young
and older women and men by reducing the wealth handed down between generations directly,
and by using revenues to spend more on education, health and a full range of the public
services that young women and men need. Equally strong labour rights are key to helping
young people secure a fair wage. Many minimum wages do not apply to young people, so
eligibility criteria need to be extended.
Economic inequality, elite capture and political participation
Many decades ago, US Supreme Court Justice Louis Brandeis famously said: ‘We may have
democracy, or we may have wealth concentrated in the hands of a few, but we can't have both’.
Across the world, faced with growing gaps between elites and the rest of society, politicians are
clamping down on democratic rights and closing the space for civil society.80 Inclusive policy
making processes which respect the rights and voice of all people are important as an end in
themselves – but also to secure the best policies. Conversely, policy making processes
dominated by elites undermine democracy and have been shown to result in policies that
predominantly benefit those elites.81 Poor and marginalized women, who have struggled to
maintain a foothold in political processes, are often the hardest hit by political capture and
shrinking civil society space.82
Currently, the CRI Index has no explicit measure of political openness or corruption. Many of
the poorest-performing countries also experience high levels of corruption and low levels of
political participation. They also have high levels of elite control of government, media and
businesses, with extensive networks of patronage and clientelism. While the Index does not
measure this directly, there is a link between poor government performance and levels of
corruption and poor governance. This connection is something that DFI and Oxfam intend to
investigate in greater depth in future years, perhaps including indicators on corruption or
governance and participation, as well as women’s participation.
Other policies of relevance to inequality
Social spending, tax and labour rights are not the only areas in which governments can take
action to reduce inequality. Other policies – for example, on small and medium-sized
enterprises (SMEs), rural development and financial inclusion – can and do have an impact.

However, concerted action on spending, taxation and labour rights is a common feature of
success stories in reducing inequality, and any government seeking to tackle inequality should
therefore prioritize action in these three areas.
RECOMMENDATIONS
1. Policy action
Governments must dramatically improve their efforts on progressive spending,
taxation and workers’ pay and protection as part of National Inequality Reduction
Plans under SDG 10.
Ahead of the review of SDG 10 in July 2019, countries must produce national plans to show
how they will reduce inequality. These plans should include increases in taxation of the
richest corporations and individuals, and an end to tax dodging and the harmful race to the
bottom on taxation. Spending on public services and social protection needs to be increased
and improved. There needs to be systematic tracking of public expenditures, involving
citizens in budget oversight. Workers need to be better paid and better protected. The
situation of women and girls, who are concentrated in the lowest-paid and most precarious
forms of employment, needs to be understood and addressed, as well as the role of the
unpaid care economy.
2. Better data
Governments, international institutions and other stakeholders should work together
to radically and rapidly improve data on inequality and related policies, and to
accurately and regularly monitor progress in reducing inequality.
Throughout this report, we highlight the many areas where data constraints prevent a robust
assessment of the progress being made on reducing inequality; yet it is imperative that
people can understand and hold governments to account for the policies that are in place
and the outcomes they affect. Data on inequality remain extremely poor and irregular; official
data on spending, tax and labour policies should be collected regularly as part of the SDG
monitoring process. Gender-disaggregated data are essential. There is also a wide range of
additional data priorities (notably on the impact of policies on gender issues and youth, but
also on social protection spending, capital gains and property/wealth taxes, minimum wages
and non-standard employment).
3. Policy impact
Governments and international institutions should analyse the distributional impact of
any proposed policies, and base their choice of policy direction on the impact of
those policies on reducing inequality.
Data are of little use without an analysis of the impact of policies on reducing inequality.
There must be greater investment in analysis (across more countries, more regularly, and in
a wider range of policy areas) of the impact of government policies on inequality. The top
priorities are to analyse the composition and impact of spending on inequality, the impact of
taxes on inequality and the amount of tax that could be collected, tax haven behaviour,
trends in and coverage/enforcement of labour rights, gender equality and minimum wage
rights in all countries.

1 REDUCING INEQUALITY THROUGH
SOCIAL SPENDING
CRI 2018
The average proportion of spending going to the three sectors of health, education and social
protection rose marginally in 2017, with several countries increasing spending significantly,
including Indonesia, South Korea, Georgia and Guinea. Others made considerable cuts, notably
DRC, Mongolia and Serbia.
Global evidence on the impact of social spending on reducing inequality
Social spending is the fundamental tool for any redistributive fiscal policy. The level of inequality
in a society before taxation and spending is known as market income inequality. Evidence
shows that social spending can have a big impact on this inequality of market incomes both
through in-kind transfers (such as health and education spending), as well as through monetary
transfers (social protection).
When a government provides public services, especially health83 and education, and when
these services are heavily subsidized or free, the poorest women and men do not have to use
their very low earnings to pay for them. This has been shown to boost incomes for lower-income
households by as much as their regular earnings. 84 85
In addition to the positive impact of these ‘in-kind’ services, redistribution and inequality
reduction can be further increased if a government provides direct cash support, including
through social welfare programmes such as cash transfer schemes that provide protection for
citizens against unforeseen circumstances, or to top up the incomes of the poorest
households.86 This social protection spending can act to redistribute cash from the wealthy in
society to the poorest households – helping to tackle inequality and build a better society for
all.87
Poor and disadvantaged women and girls stand to gain most from quality and comprehensive,
universal and equitable healthcare and education. The way this works is described in the
section on gender later in this chapter.
Evidence of the positive distributional impact of social spending is substantial, across time and
across countries. Almost no advanced economy has successfully reduced poverty and
inequality with a low level of social spending.88 Evidence from more than 150 countries, rich and
poor alike, spanning a period of more than 30 years,89 shows that, overall, investment in health,
education and social protection reduces inequality. Public services were found to reduce
income inequality by an average of 20% across OECD countries,90 and one review of 13
developing countries found that spending on education and health accounted for 69% of total
reduction of inequality.91 Evidence looking at the impact of fiscal policy in 25 low- and middle-
income countries found that direct transfers and education and health spending are always
equalizing factors.92
A number of national governments have made commitments to increase spending on health

and education. In 2001, all African governments made a commitment to increase health
spending to 15% under the Abuja Declaration. In 2015, 160 governments made the commitment
to spend up to 20% of their budgets on education as part of the Incheon Declaration. 93 Since
2012, 185 countries have adopted the International Labour Organization’s (ILO)
Recommendation 202 (R202) on Social Protection Floors, which establishes that every country
should offer access to healthcare and basic income security for the unemployed, children, the
elderly and persons with disabilities or those who are otherwise unable to earn a decent living.

In 2016, the UN launched the Global Partnership for Universal Social Protection,94 with the aim
of supporting developing countries to roll out R202 and achieve SDG 1.3 on social protection.95
Quality of spending matters
Beyond overall spending levels, evidence from across the world shows that how governments
spend their budget within and across different social sectors matters a great deal. There is huge
variation within and between countries for different sectors, and across different types of social
sector spending. Some countries have high spending but the money is not spent progressively,
so that it fails to make much of an impact on inequality; while others spend less but spend it
more effectively,
Education
Despite significant progress achieved in education outcomes across the world, many countries
underperform when it comes to the quality and equity of education. Six out of 10 children and
adolescents – 617 million globally – are failing to achieve even the most basic competencies in
reading and mathematics. Two-thirds of these children are in school.96 If the world remains on
its current trajectory, 75% of countries will not achieve universal secondary education until after
2030; in the lowest-income countries, fewer than 10% of young people will have learned basic
secondary-level skills.97
In 2015, 180 governments subscribed to the Education 2030 Framework for Action and
committed to provide 12 years of free and compulsory education for all children; however, fewer
than half of these countries report offering 12 years of free education, and only just over half
report at least 10 years. More than a quarter of countries do not report providing any free
secondary education at all; only four in 10 African countries do so. 98 In recent years, many low-
and middle-income countries have been experimenting with a new model of provision based on
fee-paying private schools for the poorest students – so-called ‘low-fee private schools
(LFPS)’.99 Significant evidence exists worldwide that reliance on tuition fees in education – both
informal and formal, private and public – excludes the poorest children (particularly girls) from
attending school.100
Spending in pre-primary and primary school is usually pro-poor in middle and low-income
countries; secondary school is overall neutral, while spending in tertiary education is more often
regressive.101 And yet, spending is skewed towards tertiary education in most cases. Too often,
the answer is to privatize tertiary education or hugely increase fees, even though these tend to
exclude the poorest students even further, exacerbating in particular the vulnerability of girls. A
balance has to be found where tertiary education is available without diverting too much public
money away from basic education.
Health
Health spending can make a significant contribution to reducing inequality, but this is
determined to a significant extent by how the money is spent. For example, it will have a limited
impact on inequality if spending is skewed towards richer areas or hospital care, away from
clinics in poor areas. Each year, 100 million people are driven below the poverty line by having
to pay for healthcare out-of-pocket, and millions more delay or avoid seeking healthcare
because they cannot afford to do so.102 Health spending also has significant implications for
gender inequality, and this is discussed further in the section on gender below.
Again, the solution that is often suggested – contributory health insurance – can exacerbate
inequality by directing public spending for health to those who are most able to make regular
insurance contributions, leaving many of the poorest and most vulnerable out. Contributory
health insurance is especially likely to exacerbate inequality in countries with large=scale
informal economies. In Ghana, for example, the government health insurance scheme has been

in operation for 15 years. It is predominantly accessed by better-off households,103 and has a
national coverage rate of just 37%.104 Women, additionally, are less likely to be covered by
health insurance, and in some countries those who are covered face higher health insurance
premiums or are disqualified for pre-existing conditions like pregnancy or having experienced
gender-based violence.105 Conversely, even some of the poorest countries with large informal
economies have demonstrated that equitable universal free health coverage is possible, funded
entirely from general taxation.
Social protection
The role played by social protection spending in reducing inequality and poverty varies greatly
across countries. In OECD countries, income transfers have historically played a critical role in
reducing inequality. Currently, on average, cash transfers, personal income taxes and social
security contributions together reduce market income inequality for the working age population
in OECD countries by slightly more than 25%. In all countries, the bulk of redistribution (around
72%) is achieved through cash transfers.106 Social insurance benefits (pensions) in OECD
countries are related to former incomes and are therefore less redistributive,107 although they
still play an equalizing role.108 Since the mid-1990s, the redistributive effect of taxes and
transfers has declined, with the reduction of benefits in many countries.109
Social protection schemes have also been shown to reduce inequality in some developing
countries, but investment in such schemes remains low for most.110 111 Over the past 20–30
years there have been laudable efforts in some middle- and low-income countries to extend
social protection. More than 20 countries, both MICs and LICs, have achieved near universal
coverage in pensions through a combination of contributory and tax-based systems. Yet in other
countries, the bulk of social protection is provided in the form of tax- or donor-funded non-
contributory social assistance and targets the poorest people. Such schemes are often small,
short-term, geographically limited and/or without a stable legal or financial foundation, and
therefore fail to make any substantive inroads into reducing inequality and poverty. Their impact
is also limited by the fact that, while targeting the poorest and most vulnerable people, the
extreme difficulty in successful targeting often means they end up excluding a significant share
of the intended beneficiaries. The dual focus on contributory schemes for formal workers and
social assistance for the poorest, moreover, leads to a lack of coverage for those in the middle,
and often renders them vulnerable and unprotected.112
Social protection can have important impacts on gender inequality and particularly on unpaid
care. These impacts are discussed further in the section below on gender.
Contributory schemes (namely social insurance, especially pensions) tend to favour better-off
households, especially in developing countries, because they are typically available only to
employees in the formal sector with stable employment relationships. Informal and precarious
workers are often excluded. The Asian Development Bank’s (ADB) Social Protection Index
found in 2013 that 83% of recipients of social protection in the region were not poor, and that
this was due to the predominance of social insurance schemes such as contributory
pensions.113
Evidence suggests that universal welfare systems are better at redistribution than systems
designed to narrowly target the poorest;114 for example, more universal allocation mechanisms
based on category rather than poverty level (such as support grants for all mothers and
children) often prove more effective. In an illustrative example, Kyrgyzstan’s Monthly Benefit for
Poor Families (MBPF), a means-tested scheme which offers $13 per month to families with
children living in poverty, was reaching less than 20% of the poorest decile of the population.
For this reason, the government decided to replace it with universal child benefits, as a step
towards building an inclusive social protection system over people’s lifecycle. However, during a
mission to the country to review its loan programme, the IMF pressured the government to
amend the law on universal child allowances to reintroduce targeting as a cost saving
measure.115

Most MICs could have much larger social protection programmes. In fact, evidence from the
ILO, reviewing options to increase fiscal space in low- and middle-income countries, shows that
universal social protection floors are feasible in the majority of them.116
Spending decisions are often subject to influence by special interests
Too often, in many countries, decisions around resource allocation are dominated by special
interests and bad policy choices that increase inequality. Elites and powerful interests can
‘capture’ policies and spending and sway spending priorities.117 For instance, in Chile, studies
show that when vouchers were introduced for the education system, the upper and middle
classes tended to capture the main benefits, which led to deep stratification within education.118
Often, allocations go disproportionately to areas with the largest populations, to urban or
wealthy areas or to areas that are politically favoured by governing parties. For example, in
Senegal, more than half of public resources are concentrated in the capital, Dakar, where only
about a quarter of the population live.119 To address these geographical inequalities, public
spending needs to be allocated according to more equitable spending formulas. A number of
countries, such as Brazil and Peru,120 121 have developed systems of allocating spending to
redress disadvantage, and these have been shown to have an equalizing impact on those
countries’ social spending.
Equity formulas are especially important in countries that have marginalized ethnic groups or
strong geographical disparities, and which may need special provisions to redress inequality.122
This variation shows up in studies that demonstrate the impact of spending on inequality using
benefit incidence analysis. The Commitment to Equity project has shown significant variation in
Latin American countries: Uruguay has higher redistribution levels from its spending, while
Bolivia’s redistributive achievements are low (compared with a higher social spend). 123 This
incidence analysis is used in the CRI Index.
To establish the indicators in this pillar, DFI has collated the most up-to-date spending data from
the most recent budget documents. This has been augmented by other sources, notably the
ILO, which kindly made its data available to DFI and Oxfam.
Gender, youth, social spending and social protection
Impact on women
There are significant overlap and positive synergies between the impact of social spending on
gender inequality and on economic inequality. Poor and disadvantaged women and girls stand
to gain most from quality, universal and equitable healthcare and education. Having access to
education can increase women’s economic opportunities, narrowing the pay gap between
women and men, and can increase women’s decision making power within the household.124 If
all girls completed primary education, maternal deaths would fall by two-thirds, saving the lives
of 189,000 women each year.125 Universal access to quality healthcare can transform women’s
lives, giving them more choices and reducing their risks of contracting preventable illnesses, or
even the risk of maternal death.126
In many countries, public services are increasingly subject to fees that put them out of reach for
most young people, wasting their talents and creating huge loss for society. Lack of universal
and free education often leads to girls losing out on educational opportunities as families
prioritize educating boys.127 Young people, particularly women, suffer when spending on this
sector is cut or when education is accessible only to those who can afford to pay. Free universal
primary education is vital, particularly for empowering girls and young women to take control of
their lives; it helps prevent child marriage and it enables women to have fewer children and to
secure a stronger economic position in society. 128 There is also widespread evidence that

investment in the human capital of children and young people is one of the most powerful ways
to break the relationship between economic inequality and lack of intergenerational mobility. 129
Investment in early years of education can therefore have a particularly strong impact on
reducing inequality, giving poorer children more of a chance at the very start of their lives. 130
Health spending has significant implications for women and girls. Universal access to quality
healthcare can transform women’s lives, giving them more choices and reducing their risks of
contracting preventable illnesses or even the risk of maternal death. Additionally, women often
provide unpaid healthcare services, taking time off work to care for their families. Women often
use their own income to pay for healthcare and, for poor women in particular, this leaves them
with fewer funds to take care of their own needs.131
When designed to be gender-responsive, social spending can make a great difference in the
lives of women. In India, the Midday Meal Scheme helped lighten the schedule of working
mothers by providing their children with a meal at school.132
Conversely, when services are not provided, there is an uneven burden on women as care
givers: in 66 countries, women spend an extra 10 weeks or more each year on unpaid work,
limiting the time and opportunity available to them to earn a living wage.133 The level of unpaid
care work done by women is huge and largely unrecognized, and public services can make a
key difference in supporting women and families. 134 Children also suffer the consequences of a
lack of adequate public care services. At least 35.5 million children under the age of five are
regularly left alone or are looked after by other young children. The poorest children in the
poorest countries are most likely to be left alone. 135
Gender-responsive budgeting
Given the huge gender disparities in access to services and in development outcomes, more
and better spending must be a touchstone for budget setting. One way that governments can
better target spending to women’s needs is through gender-responsive budgeting. This can help
to analyse the budget’s current impact and target more spending directly to women, such as on
education, maternal healthcare, reproductive rights and tackling female genital mutilation
(FGM), sexual abuse and violence against women. It can also help to ensure that spending is
having the desired impact on equity and access by looking at spending through a gender lens.
There have been major efforts across the world to promote gender-responsive budgeting and to
analyse the degree to which spending is directly or indirectly targeted to women. A recent IMF
report136 highlights numerous positive examples, and finds that gender budgeting can promote
gender equality. While specific policies vary, the evidence is beginning to become clearer on
how this vital tool can help to ensure that national budgeting processes address women’s needs
and support their rights.137

What are the overall results for the CRI Index spending pillar?
Table 3: CRI Index ranking on spending – the top and bottom ten countries
Some countries are using social spending as a means of redistributing wealth and income, and
this is having a significant impact on inequality. Near the top of the rankings for the spending
pillar are two broad clusters of countries. First, there is a cluster of high-performing OECD
countries: renowned for their well-established, long-term commitments to publicly funded social
investments, this group includes Finland, Germany and Denmark.138 Second, there is a group of
high-spending (and high-income139) countries in Latin America.
Costa Rica, at number five in the rankings on social spending for the Latin America region,
performs well on progressive public spending.140 Its investments have helped to build a high-
quality universal healthcare service, with outcomes that rival (or even surpass) some of the
richest countries in the world.141 In addition, large and very progressive social protection
measures both redistribute income142 and play a role in social cohesion.143 Uruguay,144 at
number three, spends large amounts on health and education, with well-developed social
protection schemes with broad coverage.145 Argentina, the best performer on spending in Latin
America in CRI 2018, has been renowned for its progressive social spending. With the austerity
of the current government this is now being challenged, with cuts to spending.146 The data for
the CRI 2018 is for 2015, so these cuts have yet to show in their rankings, but will do in
subsequent years.147 Taken together, the social spending of these three countries has been
shown to have a very strong impact on reducing inequality.148 They have been part of an
emerging pattern in Latin America, with government spending responsible for as much as 20%
of all reductions in inequality since 2000.149 With the shift towards more centre-right
administrations in many of these countries, however, it remains to be seen whether social
spending will remain at such high levels. Spending data for the Latin America region for this
edition of the CRI Index are not recent enough to establish whether this is the case, but any
changes will show up in subsequent iterations.
Overall, large differences in the levels and types of social spending persist across all income
levels. The wide variation in GDP per capita of the countries which do well in the CRI spending
pillar illustrates that there is no direct link between the level of GDP and level of social spending.
Those low-income countries that invest massively deserve particular recognition for using their
more limited resources to work harder on reducing inequality. Ethiopia is a notable example,
ranking sixth globally on the education sub-indicator. What is notable about Ethiopia, along with
a number of other well-performing low-income countries, is that it is devoting significantly more
to redistributive and pro-poor spending than developed countries did at a similar stage in their
history.150 Meanwhile, Cambodia’s otherwise strong performance on reducing inequality is let
down by its very low social spending.
Conversely, some middle-income countries are spending significantly less than today’s rich
nations did at a similar point in their economic development. For example, Indonesia is richer
today (in terms of per capita income) than the USA was in 1935, when it passed the Social
Security Act.151 President Jokowi has publicly committed to reducing inequality. His government
has increased health spending and the minimum wage since CRI 2017 – which is a positive
step.152 Much more needs to be done to raise tax revenues further, however, from their low level
of 11% of GDP.
This is also true for Nigeria, Pakistan and India – all MICs that could be spending far more on
health, education and social protection than they are doing; which means that they get very low
scores on the CRI Index. These three countries account for 1.6 billion people, so they could
make an enormous impact on reducing global poverty and inequality if they chose to.
Interestingly, in all three countries there has been a rapid rise in private education in the
absence of good state provision, which in turn further entrenches both economic and gender
inequality.153
Nigeria ranks at the bottom of the Index for social spending, which is reflected in very poor
social outcomes for its citizens. More than 10 million children in Nigeria do not go to school, and
60% of these children are girls.154 Less than 1% of the poorest girls complete secondary
education, compared with 27% of the richest boys.155 Nigeria has a similar per capita income to
Bolivia, yet in Nigeria one in 10 children dies before they reach their fifth birthday, compared
with one in 27 children in Bolivia.156
There are also outliers in this picture – that is, governments that are spending a significant
amount on social services but where that spending is not reducing inequality (or at least, is not
pro-poor). Nowhere is this clearer than in the case of the USA, which has very high levels of
spending on health (even when measured against the standards of the richest OECD countries)
and does well on total spending on health indicators; yet evidence suggests that this spending
is having much less of an impact on reducing inequality than health spending in other OECD
countries.157 This is largely due to the USA’s complex privatized system and the high cost of
healthcare.158 This can have a devastating impact: in 2013, two million Americans went
bankrupt as a result of medical bills, with the largest amount of personal bankruptcy attributed to
medical debt.159
Which countries had the biggest increases and the biggest cuts in
spending?
This section gives the top 10 countries to increase spending, and the bottom 10 in terms of
cutting spending, in each of the three areas: education, health and social protection. For the full
rankings for all 157 countries, see Annex 1.
Table 4: Spending on education – biggest increases and biggest cuts, CRI2017-2018

Table 5: Spending on health – biggest increases and biggest cuts, 2017
Table 6: Spending on social protection – biggest increases and biggest cuts, 2017
What do the CRI indicators on social spending actually measure?
The CRI social spending pillar is broken down into two measures: the overall level of spending,
and the impact that spending has on reducing inequality.
Indicator 1: How much has a government committed to spend on education, health and
social protection?
This indicator measures total spending for each of the three sectors – health, education and
social protection – as a percentage of a government’s total annual budget. This was chosen
because it is better suited to judging a government’s commitment to spending in these sectors
than alternatives such as percentage of GDP or per capita allocations, which would tend to
penalize low-income countries and reward high-income countries that are able to raise more tax
revenue and so to spend more.
The Index looked at the percentage of total government spending on education and health in
each of the 157 countries, with figures from the most recent 2017 budget wherever possible.
More than 90% of education and health data are from 2015–17, but only 70% of social
protection data. This reflects the need for more investment to help the ILO track social
protection spending.

Indicator 2: How progressive is spending on education, health and social protection?
Within sectors, spending can be progressive and even, in some instances, regressive. Across
the three sectors in this study generally, spending on health and education is slightly more
progressive than on social protection, because more is spent in both relative and absolute terms
on those services that are more frequently used by poor women and men. This is especially the
case for basic education and primary healthcare.
The second indicator in the spending pillar attempts to take account of the different impacts that
spending can have. It measures the actual or likely impact of spending on income inequality in
each country for the three sectors. Wherever possible, this is achieved using country-level
studies.160 Where such studies were not available, the Index used the best possible global
estimates.161
Limitations of the CRI Index social spending indicators

The CRI Index measures budget commitments in two-thirds of countries and actual spending in
the remaining one-third. It is not possible to obtain accurate, up-to-date data on how much
governments actually spend, especially in the poorest countries. There is often a discrepancy
between the stated commitments and what is actually spent. The actual amount may never be
disclosed or, if it is, there is often a significant time lag before it is disclosed. DFI and Oxfam
work with partners across the world to track budget spending and hold governments to account
when promised spending does not materialize,162 but this is something that it is not possible to
directly reflect in the Index.
The development of the Index did not include direct measures of the quality of services. We did
consider, for example, looking at levels of out-of-pocket expenditures in health or the amount
spent on tertiary education, but concluded that it was either unwise or not technically possible to
include these at this stage.163 Instead, it was decided to look at the overall incidence of services:
that is, the extent to which spending in each area has managed to reduce inequality. This is a
good proxy for quality of services, because if a country has very high health spending but this
has a very limited impact on inequality, then it is fair to conclude that the spending is doing a
relatively poor job of benefiting the poorest people more than the richest.
It is important to note that incidence studies are not available for all countries included in the
Index; where they are available they have been used, but where such studies were not
available, the Index instead used an extensive global study which looked at 150 countries over
30 years, to establish average incidence levels for education, health and social protection.164
The CRI Index does not yet have an indicator on gender for the spending pillar. This is because
sufficient data are not available at this stage. Some promising work by the IMF, UN Women and
others suggests that sufficient data could be available soon, in which case subsequent
iterations of the Index could include a gender indicator for the spending pillar.

Box 5: Increasing spending on housing – a very powerful way to reduce inequality
Housing costs are the largest item in the budgets of many poor families across the world.
In addition, and especially for the 900 million people living in slums, poor housing is a
major cause of poor health, further draining their incomes. So government spending on
subsidized housing can dramatically increase their disposable income; as a result, this
spending (especially on construction and maintenance of social housing) has reduced
income inequality even more than spending on education, health or social protection. 165
Government spending on housing investment (i.e. construction and maintenance) is only
partly included in the CRI – housing benefit payments are included, but spending on
housing construction and maintenance is not. 166 Nevertheless, this year DFI has compiled
data on actual housing spending for 79 countries, drawing on data produced by the ADB,
the UN Economic Commission for Latin America and the Caribbean (ECLAC/CEPAL),
Eurostat, the IMF and the OECD. Fifty-nine of these data points are for 2016, 19 for 2015
and one for 2014.
Panama has the highest allocation of spending to housing among these 79 countries, and
Honduras the lowest. However, there are also some interesting broader patterns.
Almost all of the countries that allocate the highest proportion of their spending to housing
are developing countries, including countries in Asia (China, Tajikistan, Singapore,
Belarus, Kazakhstan, Kyrgyzstan, Georgia, Bhutan, Thailand and Myanmar); Latin
America (Panama, Mexico, Argentina, Trinidad, Costa Rica, Bolivia and Chile); and Africa
(South Africa, Seychelles, Egypt and Mauritius). Half of these are UMICs and a quarter
each HICs and LMICs. Only three OECD members (Chile, Cyprus and Mexico) are in the
top third.
On the other hand, 80% of the countries that allocate the lowest proportion of their budgets
to housing are OECD countries (with the lowest levels being in Greece, Denmark,
Switzerland, Israel and Belgium). Only five middle-income countries out of 35 are in the
bottom third. The three low-income countries included in this group are evenly split across
high-, middle- and low-performing groups.
Across OECD countries, our calculations show that spending on housing has fallen
substantially in the past few decades, from around 5% of GDP in the 1970s to only 0.7% in
2016. This reflects a broader move in many countries away from providing social housing
(built by public or social organizations) towards subsidizing privately built ‘affordable’
housing via guarantees or by paying benefits to poorer citizens to cover housing costs.
This market-based, ‘privatized’ model is a much less effective means of reducing inequality
and poverty. Our calculations also show that spending on housing has also fallen in Asia,
from around 4% of GDP in 2000 to 3% in 2015, but on the other hand in Latin America it
has risen by almost 1% of GDP to 3.7%.
Other areas of spending relevant to reducing inequality are also not included in the CRI Index,
such as spending on agriculture and housing (see Box 5.) We intend to look at these in future
reports, even if we are unable to fully include them in the Index.
Finally, the CRI Index does not attempt to measure other ‘negative’ government expenditures
such as military spending or debt servicing, which are often substantial. Debt servicing is once
again becoming a major drain on the resources of developing countries,167 with Kenya, for
example, spending almost 50% of its revenues on debt repayments.168

2 REDUCING INEQUALITY THROUGH
TAX POLICIES
CRI 2018
CRI 2018 has introduced a new indicator measuring harmful tax practices (HTPs) under this
pillar, to capture the extent to which countries are behaving in ways that are enabling tax
dodging. On VAT, there has been very little change in the past year, with some countries
increasing rates but just as many reducing them. In the area of corporate tax, rates remained
stable compared to CRI 2017. Hungary stood out as the worst performer, cutting CIT from 19%
to 9%. As for PIT, the average top rate continued to rise, with governments from all income
groups increasing rates. At the same time, however, the collection of these more progressive
taxes has continued to fall, so their full potential in reducing inequality is not being realised.
Global evidence on the role of progressive tax in reducing inequality

Collecting a sufficient amount of tax in a progressive way, so that those earning the most
shoulder the highest tax burden, has a key impact on inequality. Therefore, campaigning for
more progressive taxation is a key part of Oxfam’s work to reduce inequality. Taxation in society
plays a three-fold role in combating inequality. First, by taking more from the rich than from the
less wealthy, tax contributes directly to reducing the gap between rich and poor. Second, the
resources raised by progressive taxation, if used to benefit poor women and men, can further
reduce inequality levels. Finally, tax can play a major role in helping to structure the economy in
such a way as to reduce primary market inequalities, by reducing the incentives for excessively
high profits, shareholder returns or runaway executive pay. Taxation can be used to encourage
investment in new technologies and different kinds of business that enable workers to secure
more of the profits, have more of a say and help build a more sustainable, more human
economy.
Countries first have to have a tax system that is progressive on paper. That means higher tax
rates for higher earners and progressive thresholds and exemptions. However, many countries fall
at this first hurdle, with very low rates of tax on corporates or on high earners. Bulgaria, for
example, has a flat PIT rate of 10% on all incomes, and a 10% corporate tax rate. The trend is
also negative, as many countries have been engaged in a deeply harmful race to the bottom on
tax rates as well as other tax exemptions and incentives. In 1990 the G20 average statutory
corporate tax rate was 40%; in 2015, it was 28.7%.169 In the Dominican Republic, the volume of
exemptions received annually by companies in the tourism sector, industry, companies in the
industrial free zone and those located in border areas would be sufficient to increase the country's
health budget by 70.3% or to multiply by five the budget on drinking water supply in fiscal year
2017.170
However, a progressive tax system on paper is only the first step. Clearly, this is irrelevant if the
actual taxes collected by governments are regressive. Figures on tax productivity show that for
every increase in national income, countries collect (on average) around 40% of the VAT and
sales taxes they should, but only around 14% of corporate and personal income taxes. This is a
particular problem in low-income countries, where only around 10% of each extra dollar of GDP
is collected. As VAT is a regressive tax in most cases, collecting a higher proportion of VAT
makes the whole tax system more regressive in practice.
This failure to collect tax is often due to multiple exemptions and deals which ensure that the
richest individuals and companies are simply not paying what they owe. It is also due to the
impact of international factors like the global network of secrecy and tax havens, which enables
tax avoidance and evasion. Because of these, the actual impact of taxes on inequality may be
very different from how the tax system of a given country appears on paper.

Finally, countries have to be collecting as much tax progressively as they can. Many countries
are collecting very little tax overall. India collects just 17.7% of GDP; Indonesia collects 11%,
whereas South Africa manages to collect 24.7%. If Indonesia increased the amount of tax it
collected by just 2% of GDP it could more than double spending on health.171 Many countries
are choosing to increase their tax take with regressive taxation like VAT, which can increase
inequality.
This evidence underlies the choice of indicators in the CRI tax pillar, which measures:
• the degree to which each country is designing its tax system with an intent to be progressive;
• the degree to which it is collecting taxes progressively;
• the amount of taxes it is collecting compared with its tax base and its potential level;
• whether or not a country is engaging in harmful tax practices.
To examine whether tax policy is progressive in different countries, as part of the CRI, DFI and
Oxfam have constructed a major new global tax database on 157 countries. This is the first ever
public database containing comprehensive tax rates and thresholds; it has the widest country
coverage on the collection of different types of taxes and the most up-to-date data on actual tax
collection performance compared with potential collection.
Box 6: The Fair Tax Monitor
Oxfam has partnered with the Tax Justice Network Africa to develop the Fair Tax Monitor
(FTM).172 The FTM utilizes a detailed methodology to deliver a more comprehensive and
thorough assessment of national tax systems and public expenditure figures,
complementing the CRI Index by providing a more detailed scoring of one specific area of
inequality: fair taxation. The national reports173 from different developing countries highlight
a number of trends.
Tax compliance is a significant issue, as the number of income tax payers in countries like
Bangladesh, Pakistan and others is very low. Instead of broadening their tax bases by
enforcing taxation on companies and individuals, countries tend to rely upon VAT and
other indirect taxes. Pakistan has raised its reliance on indirect taxation by 48% over the
past three years. While indirect taxation is easier to impose and collect, it is highly
regressive and imposes a disproportionate burden on the poorest elements of society.
All countries face high losses of tax revenues due to numerous tax exemptions, especially
those directed at major corporations, that do not benefit poor people but contribute to
raising the revenues and profits of the wealthy. For instance, Uganda lost 15.7% of its
revenue between 2010 and 2017 to tax incentives and exemptions.174 Countries must
undertake proper studies before implementing exemptions.
While offering real opportunities for more revenue, there is barely any taxation of wealth
and property. This is due to poorly structured and sparsely funded tax administrations, tax
avoidance by rich people and generally low levels of compliance. A properly functioning tax
administration is of paramount importance to increase the collection of revenue necessary
for providing essential public services.
Gender-sensitive taxation is not sufficiently addressed, resulting in women and girls being
unfairly taxed and in need of better-funded essential public services. An interesting policy
undertaken by Bangladesh is the establishment of a lower threshold for exemption on
income taxation for women, taking into account the wage gap and the high rate of informal
labour in the country.175 Government administrations must take further steps to introduce a
gender perspective into public policies, while also overcoming cultural and religious biases
to promote women’s participation in society and the labour market.

Finally, unless tax collection processes become less opaque and tax data are made
available to the public, a tax system cannot be considered fair. Citizens’ right to information
should also cover fiscal policies. Governments must collect and publish data and
information on tax systems in a way that is useful to further analysis (i.e. in a
disaggregated manner) and also understandable by the general public.
The FTM approach has been developed through a participatory process, building on the
experiences of local and international organizations. The use of a common research
framework allows for comparison of tax policies and practices over time as well as
between countries. In 2016, Oxfam published the Fair Tax Monitor Composite Report 176
with the overall findings and country reports for Bangladesh, Pakistan, Senegal and
Uganda.
Currently, the FTM is expanding to include developing countries with distinct socio-
economic backgrounds, therefore widening the comparative pool of tax systems and the
significance of this project. The next series of country reports, which is expected to be
published soon, will include Cambodia, Nigeria, Vietnam, Tunisia and the Occupied
Palestinian Territory (OPT).
Tax policies also exacerbate gender and youth inequality
The design of tax policies in almost all countries exacerbates gender inequality. 177 This can
occur when women are treated as appendages to their spouses when setting tax thresholds, or
where spouses are obliged to file joint tax returns. But it is also closely linked to the tax
structure: due to exemptions and avoidance by multinationals, many countries effectively tax
more heavily the types or size of businesses (typically small) run by women, while larger
enterprises (generally run by men) are effectively taxed less heavily, as is the income generally
earned by men from assets such as land or property rentals. Most countries also collect more
income from sales taxes and VAT. This runs the risk of taxing women more heavily because
they spend a higher proportion of their income on consumer goods for their families – although
it can be mitigated with exemptions for basic goods and foodstuffs.178
Tax policies can be used to benefit young women and men, or they can unfairly discriminate
against them. Young people are more likely to run small businesses and to consume a higher
share of their income, so indirect taxes like VAT potentially hit them harder. Young women are
particularly affected, often facing direct and indirect discrimination on the basis of both age and
gender.
It is scandalous that very few governments conduct regular analysis of the impact on gender or
youth of their tax (as opposed to their spending) policies 179 – and that as a result there are no
multi-country datasets that can be used to assess the impact of tax policies on gender
inequality. There are a few positive exceptions to this picture: for example, the Swedish
government produces its own gender analysis of the impact of each budget, and in countries
such as South Africa and the UK, civil society organizations (CSOs) produce their own regular
analysis of the potential impact of tax policy changes on women, with suggestions for alternative
gender-responsive budgets.180 Overall, designing the tax system to be more progressive, and
ensuring that the most progressive taxes are those that are actually collected will also help to
combat gender inequality. However, all governments should be applying a specific gender and
youth lens to their tax policies on an annual basis to ensure that they are reducing gender
inequality.

What are the overall results for the CRI Index tax pillar?
Table 7: CRI Index ranking on tax policies: the top and bottom ten countries
The first thing to say is that none of the 157 countries is performing well in terms of reducing
inequality through its tax policy. Overall, the average score is only 0.6 out of 1, indicating that
countries could do a great deal more. Performance is particularly poor in terms of the impact of
tax on inequality, where most countries still have what are likely to be regressive tax systems,
with a high dependence on indirect taxes. Nevertheless, some countries have managed to
reduce their Gini coefficients using tax policy, even though they are not collecting all the taxes
they should (most are collecting only two-thirds on average of what they should be collecting).
This shows that countries which do have progressive tax structures and make maximum efforts
to collect tax can have a big impact on reducing inequality through their tax policies.
Overall, in terms of tax, the data reveal that most of the countries that are performing better are
high-income OECD countries. This largely reflects the more progressive impact of their tax
systems on reducing inequality: they collect a higher share of tax revenue from progressive
income taxes, reflecting their larger tax base of individuals and corporations with sufficient
income to fall into the tax net. In general, they also perform well in collecting tax – though with
notable exceptions such as the USA. The top low-income country is Malawi, which has a
relatively progressive personal income tax structure and is collecting a relatively high share of
its potential tax take.
Near the bottom of the tax index are Bahrain and Vanuatu, which have no corporate or personal
income tax. The other countries at the bottom have very low tax rates or flat tax structures
(mainly Eastern European and former Commonwealth of Independent States countries) and
collect relatively little income tax, making their tax much less progressive. Many of them also
perform relatively poorly on the actual collection of tax compared with the potential levels that
could be collected.
What are the main trends?
On VAT, a few countries have reduced their rates since CRI 2017 (Brazil, Romania and
Trinidad) but just as many have increased them (notably Colombia and Sri Lanka). In addition, a
few countries such as Burkina Faso and Senegal have made VAT exemptions more pro-poor,
and Cambodia has increased its minimum threshold for VAT payment, leaving out small traders.
Overall average rates have fallen slightly to 15.5%.
On corporate income tax, global average rates remained more or less the same, rising
marginally by 0.07% from 24.65% to 24.48%. Although 15 countries cut their CIT rates in 2017

compared with only 10 raising them, some of these cuts were limited to smaller companies (e.g.
in Australia) which can be positive,181 and most cuts were relatively small at under 2.5%. Those
cutting their rates tended to be more economically significant countries.182 Hungary stands out
as the worst performer for having cut CIT to 9% from 19%, but several other countries have
gradually been introducing cuts over the last 4–8 years, resulting in major reductions over time
in Israel, Norway, Pakistan, Spain and the UK. On the other hand, Colombia, Mali, Jordan,
Greece and Peru were among those increasing. However, these changes are dwarfed by the
USA’s 2018 federal rate cut from 35% to 21%. This change will appear in next year’s CRI, and
the key question will be whether many countries will follow suit (so far, based on 2018 tax
codes, the opposite seems to be the case, with only Argentina and Belgium cutting CIT, and
Burkina Faso, Ecuador, Korea, Latvia and Taiwan increasing their rates).
Table 8: Increases and reductions in CIT, 2017
On personal income tax, the predominant trend of recent years (rising top rates) continued
into 2017, with average top rates rising from 30.5% to 30.8%. A broad spread of governments
across all national income levels increased their top rates in 2016–17, led by Mongolia and
Guyana. Far fewer governments (only Chile, Republic of Congo, Croatia and Egypt) cut their
top rates. Looking at 2018, which will be included in next year’s CRI, virtually no countries have
to date cut their PIT rates – with the notable exception of the USA. Countries increasing their
rates in 2018 include Colombia, Ghana, Korea, Latvia (which has moved from flat to
progressive taxation), the Philippines and Sri Lanka.

Table 9: Increases and reductions in personal income tax, 2017
There remain two countries with neither CIT nor PIT (Bahrain and Vanuatu) and two others with
no PIT (Maldives and Oman), all of which therefore have highly regressive tax systems.
However, at the same time as tax rates have been rising, effectiveness in collecting the more
progressive income taxes has been falling. This can be seen from the trend in CRI indicator T3,
where tax collection effectiveness as measured by productivity has fallen by around 2%. VAT and
CIT productivity both fell by more than 3%, while PIT productivity stayed broadly the same in spite
of tax rises. On the whole, CIT productivity changes reflected declines in mining revenues in
countries like Kazakhstan and Niger, due to falls in global minerals prices. On the other hand,
countries such as Togo, Fiji, Japan, Bolivia and Ukraine managed to increase their tax collection
considerably in 2017. The continuing low levels of productivity on CIT and PIT underline the need
to step up the fight against harmful tax practices, tax havens and tax dodging.
As a result of the fall in tax productivity, CRI indicator T2 on the impact of taxes on inequality
has also fallen, with the result that taxes are likely to be reducing inequality by only 2.7%, down
from 3.5% last year. But countries such as Morocco, China and Ukraine have also managed to
make their tax collection less regressive.
What do the CRI Index tax indicators actually measure?
Indicator 1: Is the tax structure progressive?
To assess whether countries are designing their tax systems to be progressive, the Index looks
at the progressivity of the three main sources of tax in most countries: personal income tax,
corporate income tax183 and VAT/general sales tax.
Reports from the OECD and IMF show a sharp trend, from 1990 to 2005, of governments
cutting income tax rates and increasing VAT rates – making taxes less progressive. Many
countries are also cutting corporate tax rates; for example, the UK government has said that it
wants to cut the corporate tax rate to 17% by 2020 from 19% in 2017.184 This is despite
evidence that low corporate tax rates are not a major reason why businesses make investment
decisions.185 There are many countries that could take progressive steps on tax. For example,
they could dramatically raise their low or zero corporate and personal income taxes, reduce

their high VAT rates, reduce top tax thresholds to make sure that the top 10% are adequately
taxed, and exclude basic foodstuffs and exempt small traders from paying VAT.
Indicator 2: Is actual tax collection progressive?

To assess whether the tax collected is actually progressive, the Index looks at the share of
different taxes in total tax collection, and their likely/actual impact or incidence on inequality,
based on multiple global and national studies conducted in recent years. The incidence is
assessed based on the composition of tax collected in each country, split between VAT, excise
duties, customs duties, social security contributions, PIT and CIT. For VAT we have also
factored in whether or not there are mitigation steps in place to minimize harm to the poorest
citizens, namely higher thresholds before an individual is liable to pay tax and exemptions in
place for food and other essential goods.186
Overall, the results are disappointing, with the majority of countries performing poorly. The
bottom of the Index is dominated by Eastern European and Central Asian countries (e.g. Serbia,
Ukraine, Hungary and Belarus), which collect very little income tax and depend almost entirely
on indirect taxes and, in some cases, large and regressive social security contributions.
Box 7: Why the actual rate of tax is often far lower for corporations and rich
individuals
The actual rate of tax charged in a country depends on many factors, which means that the
effective rate of tax is often significantly lower than that which is stated on paper. In India it
is 34.6% on paper, yet the effective corporate tax rate in India is around 23%.187 A recent
study by Oxfam and ECLAC found that the effective PIT rate for the top 10% in 16 Latin
American countries was just 5%.188
The CRI Index does not measure effective tax rates directly, as the data are not available
to do so for enough countries. However, by looking at how much tax a country actually
collects from personal and corporate income tax as opposed to VAT, this is reflected in the
Index to some extent.
There are three main ways in which rich individuals and corporations end up paying much
lower rates of tax.
Tax exemptions and incentives for corporations: These are a powerful reason why
countries do not collect progressive corporate taxes. National tax exemption reports across
35 countries have estimated the scale of tax exemption at between 2% and 10% of GDP a
year (15% to 33% of the revenue that governments are collecting).189 The World Bank has
estimated that Kenya is spending $330m on tax breaks for corporates; almost double its
spending on free primary education (FPE). 190 In a recent World Bank survey of investors in
East Africa, 93% said that they would have invested anyway, even if tax incentives had not
been on offer.191 There are also widespread exemptions for individuals – for example, tax
relief on mortgages, pensions, private healthcare and other areas, which predominantly
benefit wealthy people, dramatically reducing the actual tax rates that corporations and
individuals pay.
Tax dodging: Avoidance (often legal) and evasion (by definition illegal) of taxes by
corporates and individuals are costing developing and developed countries alike hundreds
of billions of dollars a year. Virtually all of this tax avoidance and evasion is undertaken by
the wealthiest in society, making the tax system much less progressive.192 It is also the
biggest reason why countries collect far less corporate and personal income tax than they
should, sharply reducing the revenues available to spend on tackling inequality.
These practices are encouraged by the actions of some countries – from the Cayman
Islands to Singapore – in having very low tax rates, providing tax havens for avoidance and
evasion. They are also encouraged by others – such as Switzerland – which agree
widespread tax exemptions and ‘sweetheart’ deals, setting themselves up as tax
havens.193

Tax treaties: Tax treaties are depriving the poorest countries (and many richer countries)
of vital revenue – as much as 3% of GDP a year, compared with tax collection rates of 15–
20% of GDP in most low-income countries.194 This is also important for tackling inequality,
because virtually all the tax revenue lost through treaties is progressive corporate income
and capital gains tax. A few developing countries, such as Rwanda, have cancelled or
renegotiated treaties to increase their tax rights, and a few middle-income countries, such
as India, have insisted on negotiating treaties that protect their tax bases better.195 It is
essential that all developed countries and tax havens redesign their treaties so that they
stop denying poor countries the tax revenues they are entitled to.
Indicator 3: Are countries implementing harmful tax practices?
This year we have added a new indicator which builds on other work being done by Oxfam and
others to find out whether countries have put in place what are known as harmful tax practices
(HTPs). These different practices are used to enable corporates to pay less tax.
Examples include granting tax exemptions for corporate patents and other ‘intangibles’ such as
brands, enabling corporates to dramatically reduce their tax bills. This is done in Luxembourg,
for example. Other methods include giving corporates tax breaks on interest, meaning that one
part of a corporate entity lends money to another part, at a high rate of interest, and then tax
relief is claimed on this. These are just two examples of the ways in which countries can reduce
the effective tax rate paid by corporates significantly.
Our measure of HTPs is not a direct marker of whether a country is a tax haven or not, but tax
havens do tend to exhibit significant HTPs in one or more areas. We use recognized definitions
of HTPs, most notably those of the OECD’s Forum on Harmful Tax Practices, and related
assessments plus the European Commission’s analysis, which informed its tax haven
blacklist.196 We made sure that we included specific practices which may or may not be
captured by such measures as patent boxes, excess profit and similar rulings and notional
interest deductions. We also assessed the prevention of HTPs through measures including
controlled foreign company (CFC) rules, general anti-avoidance rules, interest limitations and
exit taxes. Economic indicators covering ‘passive income flows’ like royalties, the amount of
trade in goods and services and foreign direct investment (FDI) were also used to determine the
likely extent of disproportionate economic flows compared with real economic activities. We
brought all of this analysis together to give each country a score on this indicator.
As a result, as Table 8 shows, countries with HTPs such as Malta, Luxembourg and the
Netherlands disappear from the top 10 performers, being replaced by countries such as Malawi,
Finland and Austria. The negative role played by the Netherlands as a corporate tax haven has
become a hot topic in the country, and Oxfam and allies are putting pressure on the government
to take clear steps to stop this.197

Table 10: Best performers on tax, adjusted for HTPs
Australia comes top in tax in CRI 2018, but this is mostly because other countries are relatively
worse in terms of harmful tax practices.198 Australia199 scores 40th on tax collection efforts and
35th on the fairness of its tax structure, well behind its OECD peers. Changes to personal
income tax to make it more regressive are also being proposed. Australia is yet to commit to the
public country-by-country reporting of the tax affairs of large multinationals. So there is a lot
more that Australia could do to improve its tax system to combat inequality.
Indicator 4: Are countries collecting enough tax revenue?
This indicator shows whether countries are collecting as much tax as they should. This is vital to
countries being able to spend sufficient funds to reduce inequality, and it also helps to explain
differences between indicator 1 and indicator 2 – in that countries which collect tax less
effectively are generally failing to collect progressive income taxes, and so are actually less
progressive than their tax structure on paper would suggest.
To judge whether countries are collecting enough taxes, it is vital to go beyond simply setting
targets related to national income, because these take no account of the widely differing
economic structures and revenue-raising efforts of countries with similar incomes. There are two
ways to do this.
1. In terms of revenue-raising efforts, experts use a ‘tax productivity’ calculation, which
compares the amount actually collected for each tax with the amount a country should
be collecting according to its tax rates and the maximum tax base. This shows the
shortfalls in tax collection due to exemptions, avoidance, evasion and inefficient tax
collection.
2. To adjust for tax collected compared with economic structures, the Centre d’Etudes et
de Recherches sur le Développement International (CERDI and the IMF have produced
an additional calculation of ‘tax effort compared with potential’200 which looks at the
relative performance of 148 countries, and shows in particular the scope for improving
tax policies.
Tax revenues from extractive industries are a large source of revenue in many developing
countries. However, because of their volatility, the CRI analysis currently excludes extractives
revenues from the calculation of ‘revenue effort’ (see Box 8).
We have combined these two calculations in order to obtain the most comprehensive picture we
can of whether countries are collecting as much tax as they could. Two-thirds of the countries in
the Index are collecting less than 25% of the tax collected by the best performers. This indicates
that across the world – in rich as well as poor countries – much more tax could be collected and
used to invest in measures that are proven to reduce inequality.

Box 8: Taxing extractives
Tax revenues from non-renewable natural resource or ‘extractive’ industries (such as oil,
gas and mining) account for the largest source of revenue in many developing countries.
However, taxing extractive industries is very complex. In most countries, it consists of a
mixture of tax and non-tax revenues. Tax revenue is usually dominated by corporate
income tax, while non-tax revenue includes royalties, bonuses, fees and profits or
dividends from state-owned enterprises. Countries collect very different shares of their
extractive revenues from these sources.
These different shares reflect governments’ different approaches to getting a fair share of
revenues from extractive industries. Because of the different revenue streams, and due to
substantial commodity price fluctuations and significant upfront investments and long
payback periods in extractive industries, extractives revenues can be highly volatile. The
extractives sector is also particularly prone to tax exemptions and non-transparent
contracts, and among the most adept at avoiding taxes. All these characteristics make
assessing tax progressivity for the sector very complicated.
The CRI Index is therefore very careful in how it treats extractive industry revenues. In line
with all global analysis and because of their volatility, the CRI analysis excludes extractives
revenues from the calculation of ‘revenue effort’. The different composition of extractives
revenue sources does not impact on the ‘tax incidence’ indicator because corporate
income tax (the only extractives revenue included in the calculation) has a virtually neutral
impact on inequality, due in part to tax dodging. As a result, the CRI as currently
constructed does not penalize countries that collect minerals revenues in non-tax ways.
However, DFI and Oxfam are aware that a more detailed analysis is desirable, preferably
based on the share of extractives earnings each government is ‘capturing’ from tax and
non-tax revenue combined. Such calculations have not been conducted for all countries,
but DFI and Oxfam would like to use such calculations in future editions of the CRI.
Sources: The data source for this box is the ICTD Revenue Database 2016, available at
http://www.ictd.ac/datasets/the-ictd-government-revenue-dataset
Oxfam et al. (2017). La Transparence à l’état brut : décryptage de la transparence des entreprises extractives.
https://www.oxfamfrance.org/sites/default/files/file_attachments/la_transaprence_a_letat_brut_one_oxfam_sherpa
.pdf
Limitations of the CRI Index tax indicators
The CRI tax pillar includes country data on VAT, CIT, PIT and to some extent excises, customs
and social security contributions. As yet, it does not include data on other taxes such as capital
gains, wealth and property taxes. This means that countries like New Zealand, which do not
have taxes on capital gains, are higher up the Index than they would be if these were included.
It is planned to include these types of taxes in future iterations of the Index.
The CRI tax pillar does not have concrete numbers on effective tax rates (see Box 7), as these
are simply not available. However, the second indicator does reflect this aspect indirectly, as it
looks at the amount that governments collect for each type of tax. If a government has a high
corporate tax rate on paper but a very low effective rate, this is captured by the fact that its
revenue from corporate taxation is much lower than would be expected. This year’s new
indicator measuring HTPs allowed by governments that benefit corporations helps to mitigate
the use of nominal tax rates in our analysis, recognizing that one government’s tax preferential
regime and related policies can impact on the tax base of other countries.
For several countries, social security contributions are a major source of government revenue,
and are levied at a flat rate, meaning that they are very regressive. We have not included data
on social security taxes of this nature in the first tax sub-indicator because we do not have
enough data at this stage for all countries where this is an issue. They are included in the
second indicator that looks at the incidence of tax on inequality We will be working to try and
include these taxes in the next version of the Index.
Box 9: The urgent need to do more to tax wealth
Wealth inequality is extreme, and it is growing.201 An increasing number of global experts

are advocating taxing wealth as one of the best potential ways to reduce inequality.202 In
future years we would like to include an analysis of wealth taxes in the CRI Index. This
year we were able to conduct a first scoping study of wealth taxes in 32 countries. These
were chosen to represent a cross-section of countries of key interest to Oxfam regions and
income levels.203 Oxfam has also looked at wealth taxes in a range of countries where it is
working.204 To this we have added other secondary sources. Key conclusions are:
• Capital gains taxes (CGT) exist in 90% of the countries surveyed. However, in many
countries they are much lower than income tax, so taxpayers still reclassify income as
capital gains in order to reduce their tax liability.
• Taxes on financial income vary for different types of income (dividends or share
income, interest on deposits or bonds, gains on pension or investment fund
investments). In general, many countries do not have progressive taxes on financial
income – but they should.
• Taxes on financial transactions are levied by many countries, on shares, stocks or
other assets. These have been shown by the IMF to be very progressive.205
• Property taxes exist in almost all the countries surveyed and are the most common
forms of wealth tax. Rates of tax on property wealth vary from 0.1% in the Netherlands
to 5% in Senegal.
• Three-quarters of countries surveyed have inheritance taxes. If properly designed and
implemented (including to prevent avoidance by the richest), these can be critical to
addressing inequality between generations. In practice, they vary dramatically. South
Korea has the highest and most progressive rates, while Italy has very low and flat
rates. In general, developing countries have much lower rates than OECD countries,
though a few OECD countries have abolished inheritance taxes (such as Australia).
• Only nine countries still have taxation of non-property wealth. This represents a sharp
decrease from 14 countries in 1990206 – though since the 2007–08 financial crisis
Argentina, Iceland, Portugal and Spain have reinstated ‘temporary’ wealth taxes. Many
countries previously also had corporate wealth taxes on company assets – which often
produced far more revenue than individual wealth taxes (Luxembourg used to collect
3% of GDP in this way).
Reliable numbers on the proportion of total revenue from wealth taxes are limited. Our
analysis shows that revenues vary dramatically, from 0.5% to 5% of GDP. It is clear that
for most countries there is considerable potential for greater taxation of wealth and also an
urgent need for it in order to fight inequality.

3 THE ROLE OF WORK AND WAGES IN
REDUCING INEQUALITY
CRI 2018
CRI 2018 has added two new sub-indicators for this pillar, looking at laws against rape and
sexual harassment. Respect for labour rights has improved very slightly in the past year. Very
few countries have introduced stronger anti-discrimination laws, but there has been an increase
in parental leave in a number of countries. More than half of countries have increased their
minimum wages more rapidly than per capita GDP between CRI 2017 and CRI 2018, with some
big increases in South Korea and Indonesia.
Global evidence on the impact of work and wages for reducing inequality
In the past 30 years, one trend stands out as having made income inequality worse: the decline
in the share of income going to labour (in the form of wages, salaries and benefits) while the
share going to capital (dividends, interest and the retained profits of companies) has risen. 207
Rich and poor countries alike have been experiencing this trend: the labour share has declined
in nearly all OECD countries over the past three decades208 and in two-thirds of low- and
middle-income countries between 1995 and 2007.209
An increase in the capital share is the result of capital owners enjoying significant and
increasing returns to capital – i.e. income derived from shares or savings rather than wages. For
example, in the UK in the 1970s, 10% of company profits were returned to shareholders; today,
they receive 70%, leaving little to increase wages for workers or invest in the future.210
Meanwhile, workers’ wages are failing to keep pace with economic growth. A particular concern
is that wages have not kept up with productivity,211 thereby removing the link between
productivity and prosperity. In the USA, net productivity grew by 72.2% between 1973 and
2014, yet hourly pay for the median worker (adjusted for inflation) rose by just 8.7%.212 While
wages in many developing countries have risen in recent decades, delivering a significant
reduction in poverty, they have often failed to keep pace with the increase in the incomes of top
earners.213 Oxfam has long campaigned to help low-paid workers and producers protect their
rights and claim their entitlements, in an attempt to reverse this worrying trend.
Governments have a critical role to play in the protection of workers. They can set and enforce
minimum wages that reduce inequality and ensure a decent standard of living. They can pass
and enforce legislation on gender equality in the workplace. They can also protect workers’ right
to organize and ensure that trade unions are supported and not suppressed. The CRI Index
aims to measure the extent to which governments are fulfilling this responsibility.
Oxfam’s research has highlighted that, across the world, women get by on wages that leave
them trapped in a cycle of poverty, even though they may be receiving the minimum wage and
working many overtime hours.214 The issue here is that in many countries, minimum wages do
not equate to a living wage, taking into account the average number of dependants that a
worker’s wage needs to support.215 In some sectors, wages have actually declined in real terms,
as a growing number of low- or semi-skilled workers compete for poor-quality jobs, due to an
absence of alternatives and increased migration flows. One study from 2013 shows that wages
in the garment-producing countries of Bangladesh, Mexico, Honduras, Cambodia and El
Salvador declined in real value by an average of 14.6% between 2001 and 2011.216 Around
80% of garment sector workers are women.217

There has been a marked decline in the percentage of workers belonging to trade unions in
developed countries, as well as an absence of significant growth in union membership in
developing countries.218 There is strong evidence219 that the extent of unionization of the
workforce is an important determinant in helping workers to demand higher wages and better
rights. Collective bargaining by unions typically raises members’ wages by 20% and drives up
market wages for everyone.220 However, many developing countries have never had strong
unions and, in some countries, workers are facing a crackdown on their right to organize.
Therefore, this route to tackling inequality – of negotiation over the relative shares of income
that go to labour and to capital – is increasingly strewn with obstacles.
At the other end of the wage spectrum, CEOs do not depend on union representation, but rather
on their individual power and influence to determine their own wages in negotiation with
company boards, which are often made up of corporate peers. Executive pay has also become
increasingly complex, with bonus and share options topping up standard salary packages. 221
Evidence suggests that inequality between CEOs’ earnings and workers’ average earnings
keeps increasing. For example, in 2017 remuneration of British chief executives at the biggest
listed companies rose more than six times faster than average wages, which failed even to keep
pace with inflation.222
Governments also need to ensure that workers are being rewarded fairly, and that executive
pay and returns to the owners of capital are not excessive. Businesses and investors must
demonstrate their contribution to national development and the upholding of state obligations to
human rights. Some governments have recently recognized this duty, as outlined in the UN
Guiding Principles on Business and Human Rights, through new legislation on compulsory due
diligence on human rights.223 Levels of executive pay and returns to the owners of capital
should be included in the remit of human rights due diligence throughout the entire length of
global supply chains.
An appropriate minimum wage is a vital element of national strategies to tackle poverty and
inequality. For example, KPMG has predicted that raising the minimum wage in the UK to the
Living Wage would lift six million people out of poverty.224 Others predicted that a million jobs
would be lost when the UK’s Minimum Wage Act was introduced in 1998, but evidence
suggests no negative impacts on employment and positive impact on reducing pay inequality
and improving the standards of living for low-paid workers.225 In Ecuador, between 2007 and
2015 the government increased the minimum wage faster than the cost of living, so the average
household of 1.6 earners could, for the first time, purchase a basket of goods and services – a
proxy for a living wage.226
Governments can feel pressured by large corporations to compete with one another, but a
concerted effort to work together on wages can be powerful. In Asia, Indonesia has proposed a
regional minimum wage to help prevent the competition between nations that all too often
results in poverty wages for workers.227 This could be even more effective if done in
collaboration with workers’ representatives.
Gender, youth, and work and wages
Women make up the majority of the world’s low-paid workers and are disproportionately
concentrated in the most insecure roles in the informal sector.228 In Asia, for instance, 75% of
working women are working informally, and lack access to basic benefits such as sick pay,
maternity leave or pensions.229 Women are often paid less than men for doing the same job,
despite working longer hours; for instance, in India, the wage gap is 32.6%.230 Even in societies
that are considered to have achieved high levels of gender equality overall, there remain
significant gender gaps in income and influence.231
Women also carry out the vast majority of unpaid care work (around 3.2 times more than
men)232 and are less likely to be represented in the workplace and thus be able to negotiate
decent terms and conditions. This unpaid care work is of major economic benefit to society but

it is not factored into economic calculations of GDP. 233 It is essential that women are not
discriminated against in the workplace and that their responsibilities for unpaid care work are
recognized, reduced and redistributed. The gender gap in unpaid care work is closing, but
extremely slowly. If the rate of change continues at the same pace, the ILO estimates that it will
take about 210 years for the gender gap to be closed completely. 234
The situation for many young people remains precarious. Almost 70 million young people are
working but still living in extreme poverty, surviving on less than $2 a day. Around 77% of young
people work in the informal economy, compared with 58% of working adults. More than three
out of four young people who are not in employment, education or training are women. 235
What are the overall results and trends for the CRI Index work and wages
pillar?
Table 11: Labour rights and minimum wages – the ten best and worst countries
The top 10 countries in this pillar are all OECD countries. Among the highest-scoring developing
countries are Tunisia and Lesotho. Some of the lowest-scoring countries, such as Swaziland
and Egypt, are well known for their weak labour laws and violations of workers’ rights, while
others (such as Bangladesh) are known for poor labour practices.236
Work and wages was the only area of the CRI where sufficient data were available for enough
countries to have three indicators on gender: parental leave, the existence of laws on rape and
the existence of laws on sexual harassment. Looking at our indicator on gender and work, there
is a wide variation in the amount of parental leave granted to women and men across the 157
countries in the CRI Index: from 480 days in Sweden, for example, to none at all in the USA.
On labour rights, the Global Labour University (GLU) reports that there has been a small
improvement in country scores, from 4.107 to 4.165, between 2015 and 2016 (on its scale of 1
to 10). This is almost entirely due to countries which have reduced the number of legal
violations of trade union and worker rights. On the other hand, virtually no countries have
improved their laws and none of the countries that ban independent trade unions have changed
their laws (Belarus, China, Equatorial Guinea, Eritrea, Iran, Iraq, Lao PDR, Libya, Qatar, Saudi
Arabia, Sudan, Syria, Turkmenistan, UAE, Uzbekistan, Vietnam).
As for women’s rights at work, there are relatively few countries – only Barbados, Liberia and
Lithuania – which have introduced stronger anti-discrimination and equal pay laws since 2015.
This still leaves 27 and 23 countries respectively without such laws. In addition, based on the
new indicators we have included for laws against rape and sexual harassment, the picture is
even worse, with only 40% having adequate anti-rape laws and just 45% having laws on sexual
harassment. Alarmingly, unlike general labour rights, there is no global system for measuring

whether such laws (and the laws measured in the new indicator on violence against women) are
actually being implemented and are improving women’s lives.237 It is clear that they are not –
and this calls for stronger measures across the board, such as the equal pay certification
system introduced by Iceland in 2018.238
There has been much more progress on parental leave, with improvements in at least 13
countries. Notably, Bhutan and India have doubled both maternity and paternity leave (in 2016
and 2017 respectively), Mozambique has increased maternity leave by 50%, and Paraguay will
increase the proportion of prior salary paid from 75% to 100% from November. Colombia, the
Dominican Republic and Israel have increased maternity leave by small periods (although for
the Dominican Republic this has taken 15 years since ratifying the relevant ILO convention),
Cyprus has introduced 14 days’ paternity leave and and compared to 2016 Spain more than
doubled paternity leave to 35 days in 2018. New Zealand is gradually increasing maternity leave
from 18 to 26 weeks by 2022, and there are ongoing parliamentary efforts in Guyana and the
Philippines to reach the same levels. However, there are still five countries (Lesotho, Papua
New Guinea, Suriname, Tonga and the USA) that have no statutory paid parental leave for all
employees.
As for minimum wages, more than half of countries have increased these more rapidly than
per capita GDP since CRI 2017. Among the most dramatic increases have been those in South
Korea and Indonesia, which have increased their minimum wages by 16% and 9% respectively,
and increases of more than 20% of per capita GDP in the Central African Republic, Ukraine,
Guinea-Bissau, El Salvador, São Tomé and Príncipe, Côte d’Ivoire, Namibia, Malaysia and the
Seychelles. A few OECD countries have also increased minimum wages considerably –
Portugal, Malta and Japan. Other countries are taking dramatic steps to change their systems:
Indonesia is trying to equalize wages by increasing them more quickly in poorer regions, Austria
supplemented its industry-specific bargaining with a nationwide minimum wage last year, and
India has introduced a nationwide floor in an attempt to limit regional divergences. Other
countries are in the process of introducing national minimum wages (South Africa for 2019) or at
least for some sectors (e.g. Cambodia for textiles sector). In this context, countries that do not
increase their minimum wages every year (32 in 2017) should be doing so. Even more
important, countries which do not yet have minimum wages (like Djibouti, South Sudan) or
which limit them to specific sectors (Cambodia, Saint Lucia, Singapore, Tonga, Jordan) should
be feeling increasingly isolated and should be introducing them now.
Box 10: Non-standard employment and inequality239
‘Non-standard’ employment refers to temporary, part-time and zero hours contracts, as

well as to self-employment. This type of employment represents around 35% of all
employment on average in OECD countries, and more than half of employment in many
non-OECD countries. It is being actively promoted by the government of Honduras, for
example. The share of the population engaged in non-standard employment has been
rising in many OECD and emerging market economies since 2008, though some countries
have introduced labour market regulations that have restricted the scope for this type of
work.
Non-standard employment can, to some extent, be positive for employment levels, by
providing flexibility (for employers and workers alike) to employ more workers on
conditions suited to their needs. However, in most countries, these types of employment
do not receive all of the labour and unionization rights (including paid parental leave or
other gender equality rights, or a minimum wage) to which full-time permanent employees
are legally entitled, and which are used as the criteria for assessing scores in the CRI
Index.

Women and young people predominate in this kind of employment category, meaning that
they are hit hardest by the lack of earnings and protection it affords. In some countries,
other categories of workers, such as youth and refugees, are also not entitled to these
rights. In others, workers in specific industries or special economic zones are deprived of
their rights through the use of non-standard employment contracts.
Non-standard workers therefore tend to earn much less for the same work – 30% less on
average in OECD countries, and 60% less in developing countries – and to have much
more precarious or vulnerable employment situations with considerable periods of under-
employment compared with their desired working hours. As a result, organizations such as
the ILO and OECD have concluded that ‘non-standard employment’ is a major factor
exacerbating inequality in all countries, and polarizing jobs between high and low earnings.
This has a particularly negative impact on gender- and age-based inequality – for example,
it explains about 20% of inequality in OECD countries.
DFI and Oxfam would therefore have liked to discount the labour scores in the CRI Index
further to take account of the level of non-standard employment in each country (adding to
the discounts for the levels of unemployment and informal employment), in order to reflect
more accurately the narrow coverage of labour rights in many countries, and to push
governments to think about how they can extend more rights to employees on these types
of contract. However, unfortunately, in spite of recent efforts by the ILO to expand country
coverage, there are no data on the scale of non-standard employment for around half of
the countries covered in the CRI Index. To support the implementation of SDG Goal 8 on
decent work, it should be an urgent priority to fund the ILO and other organizations to
collect data that enable a more accurate assessment of the degree to which workers
benefit from the legal rights that reduce inequality.
What do the CRI Index indicators on work and wages actually measure?
The CRI Index measures three areas of policy on work and wages through which a government
can tackle inequality. These have been chosen as globally relevant indicators for which
quantitative data exist, with the rationale for this given in each case.
Unlike the spending and taxation indicators, the work and wages indicators focus mainly on
provisions made by governments ‘in law’. Whether they are meaningful in terms of their actual
impact on inequality largely depends on how effectively the policies are implemented, which
requires a well-resourced and professional inspectorate and the capacity and political will to
investigate and punish non-compliance by employers. Violations of work and wage legislation
should be measured and reported, disaggregating data by sex whenever possible.
Indicator 1: How well are the rights of workers protected?
This indicator scores what governments are doing to support stronger labour and union rights
through legislation, as well as how effectively this is being implemented, given that there is often
a wide gap between law and practice. The data for this indicator are based on the Labour
Rights Indicators designed by the GLU and the Center for Global Workers’ Rights at Penn State
University. These look at comprehensive evidence on country-level compliance with freedom of
association and collective bargaining rights, although they do not check for compliance with the
ILO Protocol of 2014 to the Forced Labour Convention.240
Indicator 2: How are women protected in law?
This indicator scores countries according to whether they have legislation in place on equal pay
for equal work and against discrimination in the workplace, as well as the length of paid parental
leave and whether governments support childcare. This year we have also added two new sub-

indicators – assessing whether governments have legislation in place against rape and sexual
harassment. These are the basic building blocks to measure commitment to greater economic
equality for women in the workplace. While most countries do have this legislation in place, a
significant number do not, or the legislation falls short of what is needed. Of course, having
legislation in place does not mean that this legislation is enforced. In many countries women
simply do not actually have recourse to the law to enforce these commitments. Unlike other
indicators in the CRI Index, we do not yet have a way of tracking enforcement of gender
legislation for enough countries. Nevertheless, we felt that it was still best to include these data
rather than leave them out, with the caveat that having a policy in place, while better than not
having one at all, is not the same as these policies becoming a reality for women in society.
Indicator 3: How good is the minimum wage?
This indicator seeks to measure the minimum wage set by each government, as committed to in
legislation, as a proportion of GDP – i.e. the value of the minimum wage by comparison to a
proxy of average income. A minimum wage is the legal starting point for wage negotiations,
protecting the most vulnerable employees from exploitation and poverty wages. However, for
this indicator to reduce inequality, we need to analyse not just whether the minimum wage is
above the poverty line (which is clearly necessary to reduce poverty) but the extent to which it
closes the gap between the lowest and highest earners. Given the limited data on earnings at
the top, this indicator therefore compares minimum wages with GDP per capita for each
country.
Limitations of the CRI Index work and wages indicators
It would have been preferable to compare the minimum wage to the average wage in a country,
as a better indicator of inequality, but there are not sufficient data available on average wages
for enough countries.
There is often great variation in entitlement to minimum wages. In Bangladesh, for example,
garment workers are entitled to 5,300 taka ($68) a month, the lowest minimum wage of all
garment workers globally and well below the international poverty line;241 however, workers in
other sectors in the country are entitled to only 1,500 taka ($19) a month. Bangladesh’s
minimum wage is revised only every five years, although in 2013 international pressure
following the collapse of the Rana Plaza factory led to an increase after just three years.242
There are high levels of non-compliance with minimum wages, which is endemic in many
countries. For instance, a study on garment sector wages in 10 Asian countries found that of
100 companies studied, more than half were involved in under-payment of minimum wages
(mostly relating to overtime) and almost half did not pay social security contributions243 – and
this is in the sector that is most scrutinized through audits commissioned by international
brands.
There are other problems with using the minimum wage as an indicator. In many countries,
there is a minimum age for eligibility, which means that young people are often not covered or
are only eligible for the wage at an even lower rate. In addition, the minimum wage is rarely
applied to the informal sector – which accounts for the vast majority of the workforce in most
developing countries and certainly the majority of women in work. The data have therefore been
adjusted to take account of levels of informality in the economy, meaning that for workers in the
informal sector legal minimum wages are not being applied. It also takes into account whether
the minimum wage applies only to a certain section of the formal sector workforce – for
example, public sector workers. (This filter for informality has been applied to the other two
indicators in this section, described below.) Many of the poorest countries have high
percentages of people working in the informal sector, so this helps give a more accurate picture.
However, despite this adjustment, because the minimum wage is given as a proportion of GDP,
some of the poorest countries receive ‘high’ scores because their GDP is relatively low, and not
necessarily because the minimum wage is relatively high.

The data for the gender indicators on laws on rape and sexual harassment are taken from the
OECD dataset, the Social Institutions and Gender Index (SIGI), within the restricted physical
integrity sub-index.244 The indicators on laws on rape and sexual harassment in the workplace
are included as women’s safety and bodily integrity are integral aspects of gender inequality.
The SIGI data cover most of the countries included in the CRI Index, and are valid as of 2014.
For the countries not covered by the SIGI, we used data from the US State Department’s 2017
annual country reports on human rights practices to fill in the gaps.245 Additionally, in light of the
#MeToo movement, which has instigated much-needed debates and conversations around the
world to bring an end to sexual violence, we also looked at current news sources to see if any of
the CRI countries have brought in new legislation on rape and sexual harassment since 2014,
to ensure that the Index is up to date.
Adjustment for informality and unemployment
Because the legislation evaluated in these indicators only covers people in work, in many
countries it has no impact on a large proportion of the population (most of them women)
engaged in the informal sector, where they enjoy none of these basic rights. As a result, each of
the indicators has been adjusted for the percentage of jobs that are ‘informal’, as judged by the
ILO.246 A country in which informal jobs comprise half of national jobs will see its score cut in
half.
In countries such as Spain, which has high unemployment rates, a significant proportion of
people are not covered by legal provisions for the workplace. As a result, the score for each
indicator is further adjusted for the national unemployment rate; for example, a country with
10% unemployment will have a 10% discount applied to its score.247
It was not possible to go further and adjust the figures for people registering as employed to
allow for zero hours contracts and other elements of non-standard employment, which is a
growing issue in many countries. Data are not yet available for enough countries to do this (see
Box 11).

4 CONCLUSION
Inequality is a policy choice
The CRI Index 2018 demonstrates clearly that governments have a choice. Either they can take
steps to reduce the gap between rich and poor, or they can choose to act in ways that will
increase inequality.
The Index demonstrates that many governments are making the right choice, and are choosing
to do things that will close the gap. This shames the many other governments that are failing to
do enough. The inequality crisis is undermining progress, and it has to be tackled. We call on all
governments to take action, urgently.
Recommendations to governments
1. Policy action
Governments must dramatically improve their efforts on progressive spending, taxation and
workers’ pay and protection as part of National Inequality Reduction Plans under SDG 10.
2. Better data
Governments, international institutions and other stakeholders should work together to
radically and rapidly improve data on inequality and related policies, and to accurately and
regularly monitor progress in reducing inequality.
3. Policy impact
Governments and international institutions should analyse the distributional impact of any
proposed policies, and base their choice of policy direction on the impact of those policies on
reducing inequality.

ANNEX 1: THE COMMITMENT TO REDUCING
INEQUALITY FINDINGS
What follows are the overall global CRI ranking for each country and rankings for each region of
the world for 2018. On the CRI Index, each country is given a score of between 0 and 1 for each
indicator, and then ranked under that indicator based on its score. These scores are then
averaged to give the country’s overall CRI ranking. This means that countries may have
rankings in the three pillars that are not as high as their overall rank, because their overall
average score remains high.
Denmark, for example – the top-ranking country (see Table 1) – ranked 5, 2 and 1 for the pillars
on tax, social spending and labour rights respectively. Its average score is high enough to make
it top of the overall rankings.
Table A1: Denmark’s ranking per pillar, and overall
Spending on
health,
education and Labour rights
social Progressivity and minimum Overall CRI
Country protection of tax policy wages rank
Denmark 5 2 2 1
Score 0.74 0.92 0.97 0.87
Table A2: 2018 CRI Index country rankings
CRI rank on
Overall CRI CRI rank on CRI rank on labour rights
Country rank spending taxation policies and wages
Denmark 1 5 2 2
Germany 2 8 6 4
Finland 3 2 8 11
Austria 4 6 9 7
Norway 5 14 10 1
Belgium 6 7 5 21
Sweden 7 19 12 5
France 8 3 22 16
Iceland 9 24 26 3
Luxembourg 10 20 34 8
Japan 11 10 30 20
Slovenia 12 11 33 14
Australia 13 31 1 37
United Kingdom 14 15 19 27
Croatia 15 12 37 22
Italy 16 21 13 36
Netherlands 17 22 41 12
Canada 18 32 16 15
Portugal 19 26 36 30
Poland 20 1 114 33

CRI rank on
Malta 21 44 11 13
Spain 22 13 52 35
United States 23 25 39 34
Ireland 24 4 99 28
Israel* 25 40 31 10
Estonia 26 28 105 6
New Zealand 27 17 100 25
Czech Republic 28 9 112 26
Hungary 29 30 90 24
Slovak Republic 30 18 121 17
South Africa 31 34 3 65
Namibia 32 27 29 56
Switzerland 33 23 137 9
Argentina 34 33 45 45
Chile 35 35 60 39
Costa Rica 36 41 48 38
Greece 37 16 102 60
Uruguay 38 37 66 48
Brazil 39 38 64 49
Tunisia 40 59 17 50
Belarus 41 29 38 97
Lithuania 42 39 146 18
Ukraine 43 45 106 41
Cyprus 44 51 135 29
Seychelles 45 104 35 31
Bulgaria 46 49 130 32
Romania 47 57 83 43
Latvia 48 36 148 23
Georgia 49 48 4 117
Russian Federation 50 61 72 55
Guyana 51 65 32 63
Antigua and Barbuda 52 102 129 19
Turkey 53 62 42 70
Bolivia 54 54 25 89
Lesotho 55 71 65 52
Korea, Rep. 56 60 81 61
Colombia 57 46 56 95
Mongolia 58 78 77 47
Jordan 59 82 14 74
Moldova 60 43 140 51
Armenia 61 55 67 88
Kyrgyz Republic 62 69 63 77
Mauritius 63 52 143 44

CRI rank on
El Salvador 64 77 54 78
Ecuador 65 96 27 76
Albania 66 53 75 105
St. Lucia 67 63 87 79
Maldives 68 90 131 42
Barbados 69 97 110 53
Paraguay 70 68 108 75
Kazakhstan 71 64 119 72
Trinidad and Tobago 72 75 118 66
Serbia 73 50 144 57
Thailand 74 56 82 112
Malaysia 75 99 74 73
Kiribati 76 72 76 92
Cabo Verde 77 84 124 59
Samoa 78 111 84 64
St. Vincent and the
Grenadines 79 66 136 62
Algeria 80 94 69 86
China 81 67 57 115
Peru 82 79 68 102
Botswana 83 85 71 94
Mexico 84 47 125 109
Occupied Palestinian
Territory** 85 100 127 58
Guatemala 86 76 98 96
Malawi 87 108 7 121
Tajikistan 88 92 111 82
Dominican Republic 89 73 109 98
Indonesia 90 98 23 116
Swaziland 91 83 92 99
Zimbabwe 92 74 20 135
Yemen, Rep. 93 118 116 68
Philippines 94 114 91 84
Honduras 95 136 24 81
Jamaica 96 80 123 91
Central African Republic 97 137 147 40
Morocco 98 112 78 101
Vietnam 99 89 46 126
Bahrain 100 119 149 46
Solomon Islands 101 58 113 130
Sri Lanka 102 142 51 80
Mauritania 103 123 94 90

CRI rank on
Egypt, Arab Rep. 104 124 43 110

Papua New Guinea 105 122 55 111
Zambia 106 86 40 136
Tanzania 107 95 15 144
Fiji 108 134 96 83
Panama 109 138 126 69
Kenya 110 141 18 108
Angola 111 125 89 103
Senegal 112 103 85 122
Oman 113 126 152 54
Ghana 114 130 28 120
Belize 115 70 154 67
Azerbaijan 116 140 70 100
São Tomé and Principe 117 87 141 104
Lebanon 118 117 133 93
Mozambique 119 115 21 142
Djibouti 120 116 53 137
Cambodia 121 129 95 118
Gambia, The 122 120 93 125
Côte d'Ivoire 123 109 115 129
Liberia 124 113 120 127
Togo 125 121 59 134
Burkina Faso 126 88 79 153
Afghanistan 127 152 107 87
Mali 128 105 101 145
Guinea 129 110 150 106
Uganda 130 131 47 140
Ethiopia 131 101 86 152
Timor-Leste 132 147 128 107
Rwanda 133 128 88 138
Cameroon 134 144 49 139
Congo, Rep. 135 148 80 128
Vanuatu 136 150 97 124
Pakistan 137 154 61 119
Myanmar 138 156 62 113
Nepal 139 149 117 123
Benin 140 132 73 149
Guinea-Bissau 141 139 151 114
Niger 142 107 134 151
Burundi 143 106 122 157
Congo, Dem. Rep. 144 155 58 131
Tonga 145 93 139 155
Kosovo 146 127 155 85

CRI rank on
India 147 151 50 141

Bangladesh 148 146 103 148
Singapore 149 91 157 71
Lao PDR 150 153 44 146
Madagascar 151 135 142 143
Bhutan 152 81 153 147
Sierra Leone 153 143 132 150
Chad 154 145 138 154
Haiti 155 133 145 156
Uzbekistan 156 42 156 132
Nigeria 157 157 104 133
Notes:
* Israel
These figures relate to the Government of Israel's national budget, tax system, labour conditions and gender equality
and related laws that the State of Israel applies to its citizens. It must be noted, however, that Israel is the occupying
power in the Occupied Palestinian Territory (OPT). In this capacity, Israel maintains various degrees of control over the
occupied Palestinian population. Those under complete Israeli control in Area C of the West Bank do not benefit from
the protections of Israel’s labour laws while Israeli settlers unlawfully residing in the same geographic locations do. The
key drivers of inequality and injustice for Palestinians in the OPT are the protracted occupation, recurrent conflict and
the systematic and ongoing denial of Palestinian rights. While this Index measures fairness of taxation, levels of social
spending and work conditions, it is not designed to capture elements related to a situation of military occupation. The
results of Oxfam’s CRI Index as they relate to Israel’s control of the OPT should be interpreted in the light of these facts.
** Occupied Palestinian Territory
The figures are related to the parts of the Occupied Palestinian Territory (OPT) that fall under the jurisdiction of the
Palestinian National Authority (PNA). The OPT refers to the Palestinian territory occupied by Israel since the 1967 war:
the Gaza Strip and the West Bank, including East Jerusalem. The OPT is recognized as one territorial entity under
international law. The key drivers of inequality and injustice for Palestinians in the OPT are the protracted occupation,
recurrent conflict and the systematic as well as ongoing denial of Palestinian rights. While this Index measures fairness
of taxation, levels of social spending and work conditions, it is not designed to capture elements related to a situation of
military occupation. It should be noted that the PNA and Palestinian economy remain heavily constrained by the
ongoing occupation. Taxation in the OPT is subject to the Oslo Accords (Protocol on Economic Relations or Paris
Protocol) and the PNA is not fully sovereign in determining tax policies as they pertain to indirect taxation, the majority of
which are collected by the occupying power and transferred to the PNA. However, the PNA retains power to levy and
collect direct taxes under its authority and Oxfam partners are seeking to encourage it to address issues of tax
inequality where it can, within the constraints outlined above. The results of Oxfam’s CRI Index as they relate to the
OPT should be interpreted in the light of these facts.

REGIONAL RANKINGS
Asia
Asia’s phenomenal economic growth over the past two decades is a remarkable success story
in the fight against poverty. However, this growth has also led to a dramatic widening of the gap
between rich and poor. In cities from Mumbai to Bangkok, gleaming condominium and office
towers stand alongside shanty towns where people live with no basic services and little
protection from the elements. Asia includes countries with some of the fastest-growing levels of
inequality in the world. Whereas growth in the region from the 1960s to the 1980s was
remarkable for its broad base, recent growth has been far less inclusive. This is partly due to
recent policies that favour those at the top, including widespread tax breaks for corporations
and individuals, and cuts in headline tax rates.
Table A3 shows the individual ranking per indicator and the overall ranking for countries in East
Asia and the Pacific, and Table A4 for South Asia.
Table A3: East Asia and the Pacific
Spending Labour
on health, rights Regional
education and CRII CRII
and social Spending Progressivity Tax minimum Labour 2018 2018
Country protection rank of tax policy rank wages rank score rank
Japan 0.690 1 0.679 3 0.848 1 0.739 1
Australia 0.563 3 1.000 1 0.702 3 0.734 2
New Zealand 0.658 2 0.481 19 0.825 2 0.650 3
Korea, Rep. 0.324 6 0.521 12 0.527 5 0.449 4

Mongolia 0.244 9 0.536 11 0.595 4 0.440 5
Thailand 0.344 4 0.517 13 0.287 14 0.377 6
Malaysia 0.203 14 0.543 9 0.466 8 0.377 7
Kiribati 0.270 8 0.537 10 0.369 11 0.377 8
Samoa 0.183 15 0.514 14 0.501 6 0.372 9
China 0.278 7 0.590 7 0.275 16 0.361 10
Indonesia 0.205 13 0.704 2 0.273 17 0.344 11

Philippines 0.175 16 0.501 15 0.402 10 0.331 12
Vietnam 0.223 10 0.613 5 0.204 20 0.315 13
Solomon Islands 0.333 5 0.415 20 0.193 21 0.312 14

Papua New Guinea 0.151 17 0.593 6 0.304 13 0.301 15
Fiji 0.120 19 0.490 17 0.408 9 0.297 16
Cambodia 0.132 18 0.491 16 0.253 18 0.254 17

Timor-Leste 0.091 20 0.342 21 0.319 12 0.224 18
Vanuatu 0.079 21 0.485 18 0.215 19 0.202 19
Myanmar 0.039 23 0.577 8 0.283 15 0.194 20
Tonga 0.216 12 0.281 22 0.025 23 0.172 21
Singapore 0.221 11 0.000 23 0.486 7 0.162 22
Lao PDR 0.060 22 0.617 4 0.082 22 0.156 23

Table A4: South Asia
Spending Labour
Maldives 0.222 2 0.336 7 0.636 1 0.394 1

Sri Lanka 0.106 3 0.604 2 0.416 2 0.307 2
Afghanistan 0.061 7 0.455 5 0.383 3 0.239 3
Pakistan 0.057 8 0.578 3 0.241 4 0.201 4

Nepal 0.080 5 0.394 6 0.221 5 0.192 5
India 0.061 6 0.607 1 0.107 6 0.164 6
Bangladesh 0.098 4 0.464 4 0.067 8 0.164 7

Bhutan 0.239 1 0.131 8 0.080 7 0.144 8
Sub-Saharan Africa
Seven of the world’s most unequal countries are in Africa. 248 Across the continent, inequality is
harming the potential of growth to reduce poverty and deliver shared prosperity, and is
hindering the emergence of a new middle class. Instead, the benefits of economic growth are all
too often accruing to a small minority. The gap between rich and poor is greater than in any
other region of the world apart from Latin America, and in many African countries this gap
continues to grow. Table A5 shows the rankings for each pillar and the overall ranking for sub-
Saharan African countries included in the CRI Index.
Table A5: Sub-Saharan Africa
Spending Labour
South Africa 0.512 2 0.897 1 0.499 7 0.618 1
Namibia 0.598 1 0.680 8 0.545 5 0.607 2
Seychelles 0.191 15 0.663 9 0.761 1 0.491 3

Lesotho 0.271 4 0.568 15 0.572 4 0.452 4
Mauritius 0.364 3 0.243 38 0.625 3 0.407 5
Cabo Verde 0.231 7 0.379 32 0.534 6 0.375 6

Botswana 0.231 8 0.552 16 0.359 9 0.357 7
Malawi 0.189 19 0.870 2 0.236 17 0.349 8
Swaziland 0.234 6 0.498 24 0.342 10 0.342 9

Zimbabwe 0.262 5 0.721 5 0.134 26 0.334 10
Central
African
Republic 0.117 33 0.218 39 0.657 2 0.325 11
Mauritania 0.148 26 0.493 26 0.377 8 0.305 12
Zambia 0.230 9 0.642 10 0.133 27 0.300 13
Tanzania 0.214 12 0.754 3 0.098 33 0.300 14

Kenya 0.107 35 0.740 4 0.315 14 0.292 15
Angola 0.146 27 0.505 23 0.327 11 0.290 16
Senegal 0.194 14 0.513 20 0.227 18 0.286 17
Ghana 0.131 29 0.693 7 0.240 16 0.281 18
São Tomé
and Principe 0.229 10 0.272 36 0.326 12 0.275 19
Mozambique 0.174 23 0.721 6 0.105 31 0.271 20
Gambia,
The 0.152 24 0.494 25 0.210 19 0.253 21
Côte d'Ivoire 0.189 20 0.408 29 0.195 22 0.250 22
Liberia 0.179 22 0.390 30 0.204 20 0.244 23
Togo 0.152 25 0.581 14 0.137 25 0.244 24
Burkina
Faso 0.226 11 0.523 18 0.037 39 0.242 25
Mali 0.191 16 0.472 27 0.086 34 0.229 26
Guinea 0.189 21 0.172 40 0.320 13 0.227 27
Uganda 0.130 30 0.612 11 0.115 30 0.227 28
Ethiopia 0.200 13 0.512 21 0.039 38 0.226 29
Rwanda 0.133 28 0.505 22 0.122 28 0.213 30

Cameroon 0.103 37 0.609 12 0.115 29 0.205 31
Congo, Rep. 0.082 39 0.522 19 0.199 21 0.204 32
Benin 0.121 31 0.544 17 0.059 35 0.191 33
Guinea-
Bissau 0.112 34 0.163 41 0.275 15 0.182 34
Niger 0.190 18 0.324 34 0.046 37 0.181 35
Burundi 0.191 17 0.384 31 0.000 41 0.180 36
Congo,
Dem. Rep. 0.055 40 0.589 13 0.164 23 0.174 37
Madagascar 0.119 32 0.248 37 0.100 32 0.148 38
Sierra Leone 0.106 36 0.328 33 0.049 36 0.140 39
Chad 0.099 38 0.293 35 0.034 40 0.125 40

Nigeria 0.000 41 0.463 28 0.146 24 0.049 41

Middle East and North Africa
The Middle East had the greatest income inequality among its citizens in 2016, with the top 10%
of the population capturing 61% of national income across the region, putting it ahead of sub-
Saharan Africa, Brazil and India in terms of income inequality. 249 In North Africa, while
historically lower than in the Middle East, inequality is likely to be underestimated.250 The surge
of popular protests that swept across the region in 2011 has had profound effects on a number
of countries. Calls for greater political and economic freedoms were inspired by the desire to
end economic inequalities and political capture by local elites. Since then, violent conflicts have
persisted in Syria and Yemen, costing many lives and creating dire humanitarian conditions for
millions of people, while putting additional pressure on the infrastructure and limited resources
of neighbouring countries. With prospects for the Middle East peace process looking bleak, the
region remains at risk of fragility, unrest and violent conflict.
Table A6 shows regional rankings, but does not include a number of countries in the region due
to the extremely poor level of publicly available data on policies relevant to reducing inequality,
which prevents a more comprehensive ranking. This remains a cause for a serious concern.
Table A6: The Middle East and North Africa
Spending Labour
Tunisia 0.333 1 0.744 2 0.587 2 0.527 1
Jordan 0.237 2 0.757 1 0.463 6 0.437 2
Algeria 0.216 3 0.561 5 0.392 7 0.362 3
Occupied
Palestinian
Territories 0.202 4 0.345 8 0.534 4 0.354 4
Yemen,
Rep. 0.160 8 0.400 7 0.492 5 0.332 5
Morocco 0.179 5 0.531 6 0.337 9 0.318 6
Bahrain 0.157 9 0.178 10 0.603 1 0.312 7
Egypt,
Arab Rep. 0.146 10 0.619 3 0.304 10 0.302 8
Oman 0.138 11 0.147 11 0.558 3 0.281 9
Lebanon 0.163 7 0.324 9 0.361 8 0.274 10
Djibouti 0.170 6 0.600 4 0.132 11 0.257 11

Latin America
Latin America is the most unequal region in the world, with a history of colonial exploitation and
land concentration favouring small elites and disenfranchising the poorest people, especially
indigenous peoples and women. Nevertheless, in the past, between 2000 and 2014, the region
bucked the global trend in terms of reducing inequality. Although there are a number of
exceptions, governments in Uruguay, Bolivia, Argentina and other countries developed
important reforms to reduce inequality. Public revenues from commodities have been used to
increase spending on public services and social protection. In some countries, the minimum
wage has also been increased. This is reflected in the CRI Index, with a number of Latin
American countries doing well (see Table A7).
However, the region is currently facing an economic downturn connected to the fall in
commodity prices. In 2015, it experienced the highest increase in poverty rates since the late
1980s, and changes of government in many countries are driving policy shifts that threaten the
achievements made in recent years.251
Table A7: Latin America and the Caribbean

Spending Labour
Argentina 0.533 1 0.614 5 0.607 4 0.584 1

Chile 0.507 2 0.579 9 0.659 3 0.581 2
Costa Rica 0.422 5 0.610 6 0.670 2 0.561 3
Uruguay 0.457 3 0.567 11 0.591 5 0.536 4

Brazil 0.451 4 0.572 10 0.590 6 0.535 5
Guyana 0.283 10 0.671 4 0.510 9 0.460 6
Antigua and
Barbuda 0.198 22 0.342 22 0.856 1 0.459 7
Bolivia 0.352 8 0.700 2 0.377 18 0.456 8
Colombia 0.396 6 0.590 8 0.358 20 0.442 9
El Salvador 0.254 17 0.600 7 0.434 15 0.405 10
Ecuador 0.211 20 0.694 3 0.448 14 0.404 11

St. Lucia 0.288 9 0.511 13 0.424 16 0.397 12
Barbados 0.210 21 0.449 17 0.567 7 0.394 13
Paraguay 0.274 12 0.453 15 0.459 13 0.388 14
Trinidad
and Tobago 0.261 15 0.393 18 0.496 10 0.379 15
St. Vincent
and the
Grenadines 0.280 11 0.309 23 0.512 8 0.367 16
Peru 0.244 18 0.563 12 0.335 23 0.358 17

Mexico 0.381 7 0.377 20 0.306 24 0.355 18
Guatemala 0.260 16 0.483 14 0.351 21 0.353 19
Dominican
Republic 0.263 14 0.452 16 0.345 22 0.345 20
Honduras 0.117 24 0.701 1 0.410 17 0.328 21
Jamaica 0.240 19 0.381 19 0.374 19 0.326 22

Panama 0.112 25 0.351 21 0.491 12 0.296 23
Belize 0.273 13 0.106 25 0.496 11 0.279 24
Haiti 0.120 23 0.239 24 0.018 25 0.119 25

High-income OECD countries
In most high-income countries, the gap between rich and poor has been rising for the past 30
years. This trend comes after many years in which inequality narrowed, so much so that it was
thought that when countries reached a certain level of wealth, an increase in equality was
inevitable.252 At the end of the Second World War, many high-income countries developed high
levels of progressive taxation, strong welfare states and strong protection of workers. This
combination of policies created some of the most equal countries in the world – which is
reflected in the fact that high-income countries are predominantly at the top of the CRI Index
(see Table A8). In recent decades, however, there has been a steady erosion of these policies
in many rich nations, from Denmark to the USA. Institutions such as the IMF and the OECD
have linked this to rising inequality.
Table A8: High-income OECD countries
Spending Labour
Denmark 0.741 5 0.919 2 0.971 2 0.874 1
Germany 0.707 8 0.878 4 0.943 4 0.840 2
Finland 0.768 2 0.854 5 0.881 11 0.833 3
Austria 0.736 6 0.834 6 0.933 7 0.833 4

Norway 0.671 13 0.828 7 1.000 1 0.830 5
Belgium 0.731 7 0.887 3 0.846 18 0.819 6
Sweden 0.652 18 0.797 8 0.937 5 0.793 7

France 0.751 3 0.712 12 0.860 15 0.774 8
Iceland 0.623 23 0.700 13 0.951 3 0.757 9
Luxembourg 0.651 19 0.669 17 0.927 8 0.749 10

Japan 0.690 10 0.679 14 0.848 17 0.739 11
Slovenia 0.681 11 0.669 16 0.861 13 0.737 12
Australia 0.563 28 1.000 1 0.702 30 0.734 13
United
Kingdom 0.660 14 0.722 11 0.816 23 0.732 14
Italy 0.645 20 0.795 9 0.736 29 0.723 15
Netherlands 0.644 21 0.628 20 0.875 12 0.716 16
Canada 0.541 29 0.753 10 0.861 14 0.712 17

Portugal 0.618 25 0.663 18 0.771 25 0.684 18
Poland 1.000 1 0.414 31 0.751 26 0.679 19
Spain 0.675 12 0.602 22 0.739 28 0.671 20
United
States 0.621 24 0.643 19 0.744 27 0.669 21
Ireland 0.745 4 0.481 26 0.807 24 0.668 22
Israel 0.443 32 0.673 15 0.904 10 0.666 23
Estonia 0.579 26 0.460 29 0.936 6 0.656 24
New
Zealand 0.658 16 0.481 27 0.825 21 0.650 25
Czech
Republic 0.703 9 0.436 30 0.817 22 0.641 26

Hungary 0.576 27 0.502 25 0.827 20 0.634 27
Slovak
Republic 0.655 17 0.387 32 0.858 16 0.622 28
Switzerland 0.643 22 0.299 34 0.906 9 0.594 29
Chile 0.507 30 0.579 23 0.659 31 0.581 30

Greece 0.658 15 0.467 28 0.533 32 0.547 31
Latvia 0.498 31 0.185 35 0.828 19 0.478 32
Turkey 0.312 35 0.625 21 0.489 34 0.458 33

Korea, Rep. 0.324 34 0.521 24 0.527 33 0.449 34
Mexico 0.381 33 0.377 33 0.306 35 0.355 35

NOTES
1 For an outline of this see, for example, World Bank (2016). Poverty and Shared Prosperity 2016:
Taking on Inequality. http://www.worldbank.org/en/publication/poverty-and-shared-prosperity
2 D. Hardoon, S. Ayele and R. Fuentes-Nieva (2016). An Economy for the 1%: How privilege and power
in the economy drive extreme inequality and how this can be stopped. Oxford: Oxfam International.
https://oxf.am/2FKbYYL
3 K. Pickett and R. Wilkinson (2010). The Spirit Level: Why Equality is Better for Everyone. London:
Penguin. See also C. Wang, G. Wanand and X. Zhang. (2016). Which Dimension of Income
Distribution Drives Crime? Evidence from the People’s Republic of China. ADBI Working Paper No.
704. Tokyo: Asian Development Bank Institute.
https://www.adb.org/sites/default/files/publication/236561/adbi-wp704.pdf
4 C. Lakner, M. Negre and E.B. Prydz (2014). Twinning the Goals: How Can Promoting Shared
Prosperity Help to Reduce Global Poverty? World Bank Policy Research Working Paper 7106.
5 Tax Policy Center (2017). Distributional Analysis of the Conference Agreement for the Tax Cuts and
Jobs Act. https://www.taxpolicycenter.org/publications/distributional-analysis-conference-agreement-
tax-cuts-and-jobs-act
6 J. Martinez-Vazquez and B. Moreno-Dodson (2014). The Impact of Tax and Expenditure Policies on
Income Distribution: Evidence from a Large Panel of Countries. Georgia State University, Economics
Department Publications; N. Lustig (2015). The Redistributive Impact of Government Spending on
Education and Health: Evidence from Thirteen Developing Countries in the Commitment To Equity
Project. CEQ Working Paper Series, Tulane University; and OECD (2015). In It Together: Why Less
Inequality Benefits All. Also see, for example, F. Jaumotte and C. Osario Bultron (2015). Power From
The People. IMF. Finance & Development. 52:1.
http://www.imf.org/external/pubs/ft/fandd/2015/03/jaumotte.htm
7 N. Lustig (2015). The Redistributive Impact of Government Spending on Education and Health, op. cit.
8 UN Women (2015). Progress of the World’s Women 2015-16.
http://progress.unwomen.org/en/2015/pdf/UNW_progressreport.pdf
9 OECD (2015). In It Together: Why Less Inequality Benefits All, op. cit.
10 For evidence of the power of taxation to reduce inequality, see the multiple country studies carried out
by the Commitment to Equity Institute, available at: www.commitmenttoequity.org
11 IMF (2017, October). Fiscal Monitor: Tackling Inequality. IMF.
https://www.imf.org/en/Publications/FM/Issues/2017/10/05/fiscal-monitor-october-2017
12 F. Jaumotte and C. Osorio Buitron (2015). Inequality and Labor Market Institutions. IMF Staff
Discussion Note SDN/15/14.
13 Ibid.
14 ILO (2018). World Employment and Social Outlook: Women.
https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---
publ/documents/publication/wcms_619577.pdf
15 World Inequality Report (2018). https://wir2018.wid.world/files/download/wir2018-full-report-english.pdf
16 M.Martin and M.Lawson (2017). Commitment to Reducing Inequality Index: A new global ranking of
governments based on what they are doing to tackle the gap between rich and poor. DFI and Oxfam.
https://www.oxfam.org/en/research/commitment-reducing-inequality-index
17 See the CRI Index 2018, Methodology Note for more details.
18 The Netherlands could take concrete measures to stop being a corporate tax haven, including;
implementing stronger rules against profit shifting to (other) tax havens; stop providing tax deals for
corporations that leave corporate profits (largely) untaxed (so-called ‘Excess profit rulings'); revert
legislation that favours large corporations with lower tax rates (Innovation box); and support steps at
European and global levels against corporate tax competition between countries.
19 See, for example, C. Lagarde, C. Deléchat and M. Newiak (2018). Ending Harassment Helps
#TheEconomyToo. IMF Blog. https://blogs.imf.org/2018/03/05/ending-harassment-helps-
theeconomytoo/
20 C. Franklin and T. Menaker (2012) Differences in Education/Employment status in Intimate Partner
Victimisation. Crime Victim’s Institute, Houston University.
21 The facts about sexual violence are taken from the report of the Indian National Family Health Survey -
4, which was conducted nationwide in 2015–16. The report was put in the public domain in December
2017. The facts are mentioned in the Section 16.6.1 Prevalence of Spousal Violence (p.566). More
detailed information is available in Tables 16.4 and 16.9. http://rchiips.org/nfhs/
22 See Feminism in India website. https://feminisminindia.com/sh-law/
23 The new countries are Brazil, Belize, Chad, Kosovo and Uzbekistan.

24 The overall rank for a country is calculated as an average of their scores under the three pillars, not
their rank under the three pillars. Their rank on each pillar is irrelevant to the overall ranking – see
Denmark for example (Table A1).
Spending on
health, education Progressive Labour market
and social structure and policies to address Total CRI
Country protection incidence of tax inequality Rank
Denmark 5 2 2 1
Score 0.74 0.92 0.97 0.87
25 World Bank infant mortality figures for Nigeria, See: http://data.worldbank.org/indicator/SH.DYN.MORT

26 Premium Times (2015). 10.5 million children out of school in Nigeria – UNICEF.
http://www.premiumtimesng.com/news/top-news/188590-10-5m-children-out-of-school-in-nigeria-
unicef.html
27 UNICEF Nigeria. Retrieved from https://www.unicef.org/nigeria/education.html
28 There has been some recent progress in increasing tax collection in Nigeria, but it has yet to impact on
their very low tax-to-GDP ratio, 6%. https://www.premiumtimesng.com/news/more-news/256385-firs-
recorded-n4-trillion-tax-revenue-collection-2017-fowler.html
29 IMF (2018). Nigeria: Selected Issues. Country Report No. 18/64.
https://www.imf.org/en/Publications/CR/Issues/2018/03/07/Nigeria-Selected-Issues-45700
30 ‘We must be mindful, and focus on the widening inequalities within societies, and the gap between the
rich and the poor nations. These inequalities and gaps are part of the underlying root causes of
competition for resources, frustration and anger leading to spiralling instability.’ – President Buhari of
Nigeria, Speech to UN General Assembly, September 2017. Statement delivered by His Excellency
Muhammadu Buhari, President of the Federal Republic of Nigeria. Buhari, M. New York: United
Nations, 2017. The General Debate of the 72th Session of United Nations General Assembly.
31 See World Bank. GINI index. http://data.worldbank.org/indicator/SI.POV.GINI?locations=AR
32 D. Rossignolo (2016). The Impact of Taxes and Expenditures on Poverty and Income Distribution in
Argentina. Commitment to Equity Working Paper 45. http://www.commitmentoequity.org/wp-
content/uploads/2017/05/CEQ_WP45_Rossignolo_May17_2017.pdf
33 See http://legis.senado.leg.br/legislacao/DetalhaSigen.action?id=540698 and D. Philips (2016). Brazil
senate approves austerity package to freeze social spending for 20 years. The Guardian.
https://www.theguardian.com/world/2016/dec/13/brazil-approves-social-spending-freeze-austerity-
package
34 Argentina: IMF-Style Austerity Can't Be Macri's Only Solution.
https://www.forbes.com/sites/afontevecchia/2018/06/08/argentina-imf-style-austerity-cant-be-macris-
only-solution/#4d3880187161
35 https://www.telesurtv.net/english/news/Argentina-Professors-Teachers-Protest-Against-Budget-Cuts-
20180824-0013.html and https://www.afp.com/en/news/15/argentinas-president-announces-new-
austerity-measures-doc-18t7ka2
36 J Engel (2010). Ethiopia’s progress in education: A rapid and equitable expansion of access.
https://allafrica.com/download/resource/main/main/idatcs/00020257:ae9e77aeacf6cb4d8a886967f7390
afe.pdf
37 J.E. Stiglitz and A. Schiffrin (2016). Learning from Namibia. Project Syndicate. https://www.project-
syndicate.org/commentary/namibia-economic-social-success-story-by-joseph-e--stiglitz-and-anya-
schiffrin-2016-06
38 World Bank (2017). Does Fiscal Policy Benefit the Poor and Reduce Inequality in Namibia?
http://www.commitmentoequity.org/wp-content/uploads/2018/03/Namibia_116029-WP-P148652-
PUBLIC-NamibiaCEQReport.pdf
39 Y. Byeon et al. (2017). Korea’s Paradigm Shift for Sustainable and Inclusive Growth: A Proposal. IMF
Working Paper. https://www.imf.org/en/Publications/WP/Issues/2017/11/21/Koreas-Paradigm-Shift-for-
Sustainable-and-Inclusive-Growth-A-Proposal-45423
40 Jo He-rim (2017). Parliament passes 2018 government budget proposal. The Korea Herald.
http://www.koreaherald.com/view.php?ud=20171205001033. Further planned increases in the
minimum wage have been reduced in the face of fierce criticism from the business community, and to
mitigate the short-term economic impact. President Moon is providing a subsidy to small businesses to
help cope with the rise.
http://english.yonhapnews.co.kr/news/2018/09/12/0200000000AEN20180912004251320.html
41 C. Kim (2017). Rich South Koreans, conglomerates face big tax bill as government seeks to fund
welfare. Reuters. https://www.reuters.com/article/us-southkorea-economy-tax/rich-south-koreans-
conglomerates-face-big-tax-bill-as-government-seeks-to-fund-welfare-idUSKBN1AI0Z9
42 Choi Ha-yung (2017). 86% support tax hike on rich. Korea Times.
http://www.koreatimes.co.kr/www/nation/2017/07/356_233532.html
43 CGTN America (2017). South Korean President Moon warns rising inequality leading to a crisis.
https://www.youtube.com/watch?v=0RSGTDIG-h0 and OECD (2016), OECD Social Expenditure
database, (www.oecd.org/social/expenditure.htm). According to latest data available, Korea ranks at
the bottom just over Mexico
44 C. Kim (2017). Rich South Koreans, conglomerates face big tax bill as government seeks to fund
welfare. Reuters. https://www.reuters.com/article/us-southkorea-economy-tax/rich-south-koreans-
conglomerates-face-big-tax-bill-as-government-seeks-to-fund-welfare-idUSKBN1AI0Z9
45 Yonhap News (2017). Full text of S. Korean President Moon’s address to U.N. General Assembly.
http://english.yonhapnews.co.kr/national/2017/09/21/0301000000AEN20170921013400315.html
46 See for example http://www.elcolombiano.com/colombia/politica/fiscalia-pide-investigar-dos-
congresistas-por-corrupcion-IB7605280
47 See https://www.theguardian.com/world/2018/feb/20/iceland-equal-pay-law-gender-gap-women-jobs-
equality
48 S.J. Klees (2017). Liberia’s Experiment with Privatizing Education.
http://ncspe.tc.columbia.edu/working-papers/WP235.pdf
49 Sierra Leone Telegraph (2018, 19 August). https://www.thesierraleonetelegraph.com/sierra-leone-
launches-free-school-education/https://www.thesierraleonetelegraph.com/sierra-leone-launches-free-
school-education/
50 R. Desai (2015). Does the Developing World Need a Welfare State to Eliminate Poverty? Some
insights from history. Brookings Institution. https://www.brookings.edu/blog/future-
development/2015/07/30/does-the-developing-world-need-a-welfare-state-to-eliminate-poverty-some-
insights-from-history/
51 The Jakarta Post (2017, 24 February). http://www.thejakartapost.com/news/2017/02/24/government-to-
reform-tax-to-fight-widening-inequality.html
52 C. Hoy and A. Sumner (2016). Gasoline, Guns, and Giveaways: Is There New Capacity for
Redistribution to End Three Quarters of Global Poverty? CGD Working Paper 433. Washington DC:
Center for Global Development. https://www.cgdev.org/sites/default/files/gasoline-guns-and-
giveaways-end-three-quarters-global-poverty-0.pdf
53 A. Krozer (2015). For Richer or Poorer: The capture of growth and politics in emerging economies.
Oxfam International. http://oxf.am/ZmqK
54 A. Arendar and E. Seery (2014). Even it Up: Time to end extreme inequality. p.36. Oxfam.
http://oxf.am/Ffd
55 S.Kumar (2015). Private Sector in Healthcare Delivery Market in India. Institute for Studies in Industrial
Development Working Paper 185.
56 See for example the very successful Nine is Mine campaign. A box on this campaign is included in the
CRI 2017 report.
57 For a full discussion and analysis of the inequality situation in Latin America and the Caribbean, see R.
Canete et al. (2015). Privileges That Deny Rights: Extreme Inequality and the Hijacking of Democracy
in Latin America and the Caribbean. Oxfam. http://oxf.am/ZmS9
58 If you have stories to share please email [email protected]
59 These include a patent box (Intellectual Property Development Incentive), a maritime sector incentive,
a global trader programme and a financial sector incentive. For details, see PwC Worldwide Tax
Summaries on Singapore’s corporate tax incentives. http://taxsummaries.pwc.com/ID/Singapore-
Overview
60 Croatia cut its personal income tax to rate by 3% and its top rate of corporate tax by 2%. Egypt cut its
top rate of personal income tax by 2% and its top rate of corporate tax by 2.5%.
61 Development Pathways. Mongolia and Kyrgyzstan lose out in their struggle with the IMF over the
targeting of child benefits. http://www.developmentpathways.co.uk/blog/mongolia-kyrgyzsg-child-
benefits/
62 This is calculated by taking the global average Gini coefficient (taken from the World Bank’s
POVCALNET) and comparing this with the average change in the Gini brought about by spending in
the S2 indicator in the CRI database.
63 Lower CIT rates for SMEs may be a good policy option for governments wanting to tackle inequality,
particularly when tax dodging by big corporations means that effective tax rates can be higher for
SMEs than for big corporations.
64 Cuts in more economically significant countries are particularly concerning as more large corporations
do business in such countries, and the policies of these countries tend to have greater direct and
indirect impacts on other countries.
65 See website: http://labour-rights-indicators.la.psu.edu
66 Even the OECD’s Social Institutions and Gender Index (SIGI) only measures whether legal procedures
are correctly followed when cases are brought before courts.
67 For detail of the Abuja Declaration, see
http://www.who.int/healthsystems/publications/abuja_declaration/en/ and for the Incheon Declaration,
see http://uis.unesco.org/sites/default/files/documents/education-2030-incheon-framework-for-action-
implementation-of-sdg4-2016-en_2.pdf
68 For the Bachelet Commission report, see http://www.ilo.org/wcmsp5/groups/public/---dgreports/---
dcomm/---publ/documents/publication/wcms_165750.pdf
69 R. Joyce & L.Sibeta (2013) Labour’s record on poverty and inequality Institute of Fiscal Studies
https://www.ifs.org.uk/publications/6738
70 See M. Whitaker (2017). Economy Drive: Priorities and prospects ahead of the last Spring Budget.
Resolution Foundation Briefing. https://www.resolutionfoundation.org/app/uploads/2017/02/Economy-
Drive.pdf; and L. Elliot and K. Allen (2017). UK faces return to inequality of Thatcher era, says report.
The Guardian. https://www.theguardian.com/business/2017/jan/31/theresa-may-inequality-margaret-
thatcher-resolution-foundation
71 According to OECD data, Denmark saw a rise of 19.2% in the Palma ratio in the period from 2005 to
2015, an exceptional increase (this is based on OECD data from
https://stats.oecd.org/index.aspx?queryid=66670). The government’s own estimates show that the
political reforms of the period 2012–16 have increased the Gini coefficient for disposable income by
0.48 percentage points. Source: https://lo.dk/wp-content/uploads/2016/12/ny-indkomstulighed.pdf Prior
to 2004, the bottom 40% of Denmark’s population received more income than the top 10%; this has
since been reversed. See: https://www.ae.dk/sites/www.ae.dk/files/dokumenter/publikation/ae_fl16.pdf
72 Gustav A. Horn, et al. (2017). Was tun gegen die Ungleichheit? Wirtschaftspolitische Vorschläge für
eine reduzierte Ungleichheit. IMK Report 129. Düsseldorf available from
https://www.boeckler.de/pdf/p_imk_report_129_2017.pdf
73 D. Hardoon (2017). An Economy for the 99%: It’s time to build a human economy that benefits
everyone, not just the privileged few. Oxfam. http://oxf.am/ZLBB; https://doi.org/10.21201/2017.8616
74 I. Macias-Aymar, D.Vasquez and M.Lawson (2018). Reward Work, not Wealth: To end the inequality
crisis, we must build an economy for ordinary working people, not the rich and powerful. Oxfam.
https://www.oxfam.org/en/research/reward-work-not-wealth
75 It is also the case that these structural factors are often much more context-specific than the core
actions of progressive spending, taxation and labour rights, which are relevant to inequality reduction in
almost every instance.
76 See, for example, F. Rhodes (2016). Women and the 1%: How extreme economic inequality and
gender inequality must be tackled together. Oxfam. https://oxf.am/2FKqhfM; F. Rhodes (2017). An
Economy that Works for Women: Achieving women’s economic empowerment in an increasingly
unequal world. Oxfam. https://oxf.am/2FO3PT1; M. Chan (2018). Unpaid Care – Why and How to
Invest: Policy briefing for national governments. Oxfam. https://policy-
practice.oxfam.org.uk/publications/unpaid-care-why-and-how-to-invest-policy-briefing-for-national-
governments-620406; and A. Parvez-Butt et al. (2018). Exploring the Need for Gender-Equitable Fiscal
Policies for a Human Economy: Evidence from Uganda and Zimbabwe. Oxfam. https://policy-
practice.oxfam.org.uk/publications/exploring-the-need-for-gender-equitable-fiscal-policies-for-a-human-
economy-evi-620417
77 Miles Corak (2013). Income Inequality, Equality of Opportunity, and Intergenerational Mobility. Journal
of Economic Perspectives. 27:3. pp. 79-102. https://www.aeaweb.org/articles?id=10.1257/jep.27.3.79
At the global level: Narayan, Ambar; Van der Weide, Roy; Cojocaru, Alexandru; Lakner, Christoph;
Redaelli, Silvia; Mahler, Daniel Gerszon; Ramasubbaiah, Rakesh Gupta N.; Thewissen, Stefan. 2018.
Fair Progress? Economic Mobility Across Generations Around the World. Equity and Development.
Washington, DC: World Bank.
78 World Health Organization (WHO) (2017). More than 1.2 million adolescents die every year, nearly all
preventable. http://www.who.int/news-room/detail/16-05-2017-more-than-1-2-million-adolescents-die-
every-year-nearly-all-preventable; and The Economist (2018). In some countries, killer cops are
celebrated. https://www.economist.com/international/2018/03/08/in-some-countries-killer-cops-are-
celebrated
79 R.Chetty (2018). Race and Economic Opportunity in the USA. Equal Opportunity Project
http://www.equality-of-opportunity.org/assets/documents/race_summary.pdf
80 See, for example, Civicus (2016). State of Civil Society Report 2016.
http://www.civicus.org/index.php/socs2016
81 L. Bartels (2002). Economic Inequality and Political Representation. Princeton.
82 Tharanga Yakupitiyage (2017). ‘Banging on the Door’ – Women Fight for a Voice and Space in Civil
Society. Inter-Press Service. http://www.ipsnews.net/2017/12/banging-door-women-fight-voice-space-
civil-society/
83 O. O’Donnell et al. (2007). The Incidence of Public Spending on Healthcare: Comparative Evidence
from Asia. The World Bank Economic Review 21(1) (January): 93–123.
https://doi.org/10.1093/wber/lhl009. This research shows that health spending was found to reduce
inequality in 11 of 12 Asian countries.
84 E. Seery (2014). Working for the Many: Public services fight inequality. Oxfam. http://oxf.am/RZn
85 In her work with the Commitment to Equity (CEQ) Institute, Nora Lustig identifies four types of income
inequality. The first is market inequality, or the inequality that results from allocation of income to
households and enterprises before government intervention through taxes and transfers. The second is
disposable income, the amount of income after direct taxes and transfers. The third is consumable
income, the amount remaining after indirect taxes and transfers, and the final income is the amount
when the cash value of education and health services are taken into account. See, for example, N.
Lustig (2017). Fiscal policy, Inequality and the Poor in the Developing World.
http://www.commitmentoequity.org/wp-content/uploads/2017/08/CEQ_WP23_Lustig_July2017v2.pdf
86 The data include all schemes which have some form of contributory element (e.g. pensions or
insurance schemes) and non-contributory schemes, and include nine categories: sickness,
unemployment, old age, employment injury, family, maternity, invalidity and survivor’s benefit; plus
other income support and assistance programmes, including conditional cash transfers, available to the
poor and not included under the above classes.
87 See I. Ortiz. (2015). Social Protection for All to Change People’s Lives by 2030. Geneva: International
Labour Organization. http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_405766/lang--
en/index.htm and ILO’s Recommendation 202 (R202)
https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:R202
88 I. Marx, B. Nolan and J. Olivera (2015). The Welfare State and Antipoverty Policy in Rich Countries. In
A.B. Atkinson and F. Bourguignon (eds). Handbook of Income Distribution, Vol. 2B, pp.2063–2139.
Amsterdam: Elsevier.
89 This is from 1970 to 2009. J. Martinez-Vazquez and B. Moreno-Dodson (2014). The Impact of Tax and
Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries. Georgia State
University.
90 Between 2000 and 2007. G. Verbist, M. F. Förster and M. Vaalavuo (2012). The Impact of Publicly
Provided Services on the Distribution of Resources: Review of New Results and Methods. OECD
Social, Employment and Migration Working Papers, No. 130. OECD Publishing.
91 N. Lustig (2015). The Redistributive Impact of Government Spending on Education and Health, op. cit.
92 N. Lustig (2017). Fiscal Policy, Inequality and the Poor in the Developing World. CEQ Working Paper
23. CEQ Institute, Tulane University.
93 For details of the Abuja Declaration, see:
http://www.who.int/healthsystems/publications/abuja_declaration/en/; and for the Incheon Declaration,
see: http://uis.unesco.org/sites/default/files/documents/education-2030-incheon-framework-for-action-
implementation-of-sdg4-2016-en_2.pdf
94 ILO (2016). World Bank, ILO announce new push for universal social protection.
http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_525544/lang--en/index.htm
95 SDG 1.3: ‘Implement nationally appropriate social protection systems and measures for all, including
floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.’
96 UNESCO et al. (2017). More Than One-Half of Children and Adolescents Are Not Learning Worldwide.
Fact Sheet 46. http://uis.unesco.org/sites/default/files/documents/fs46-more-than-half-children-not-
learning-en-2017.pdf
97 Education Commission (2016). The Learning Generation: Investing in education for a changing world.
http://report.educationcommission.org/wp-
content/uploads/2016/09/Learning_Generation_Full_Report.pdf
98 Calculated from data in statistical tables in A. Benavot et al. (2016). Global Education Monitoring
Report 2016: Education for People and Planet – creating sustainable futures for all. Paris: UNESCO.
99 J. Walker et al. (2016). Private Profit, Public Loss: Why the push for low-fee private schools is pushing
quality education off-track. South Africa: Global Campaign for Education. http://www.right-to-
education.org/resource/private-profit-public-loss-why-push-low-fee-private-schools-throwing-quality-
education
100 Ibid.
101 N. Lustig (2017). Fiscal policy, Inequality and the Poor in the Developing World, op. cit.
102 WHO (2017). Universal health coverage (UHC). Factsheet.
http://www.who.int/mediacentre/factsheets/fs395/en/
103 Abena D. Oduro, Albert A Arhin, George Domfe, Seidu Alidu, Felix S.K. Agyeman, Doreen Edem
Asimadu, Jo Walker, Luke Gibson, Chiara Mariotti, Sarah Hall (2018) Building a more equal Ghana: A
5-point action plan to close the gap between the rich and the rest. Oxfam. https://oxf.am/2D6wvcD
104 Latest coverage figures from presentation by Oswald Essuah-Mensah, Corporate Affairs Directorate,
NHIA 29 March 2018.
105 National Women’s Law Center (2013). Women and the Health Care Law in the United States.
https://nwlc.org/resources/women-and-health-care-law-united-states/
106 O. Causa and M. Hermansen (2017). Income redistribution through taxes and transfers across OECD
countries. OECD: Economics Department Working Papers No 1453.
107 OECD (2011). Divided We Stand: Why Inequality Keeps Rising. OECD Publishing. See Tables 6.6
and 6.9. http://dx.doi.org/10.1787/9789264119536-en
108 Contributory pensions have a significant equalizing effect in Argentina, Brazil and Uruguay and also in
Chile, Costa Rica and Ecuador, but in the latter their effect is small. See N. Lustig (2016). The Impact
of Taxes and Social Spending on Inequality and Poverty in Latin America: Argentina, Bolivia, Brazil,
Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Peru, and
Uruguay. (Spanish). Center for Global Development Working Paper 427.
109 O. Causa and M. Hermansen (2017). Income redistribution through taxes and transfers across OECD
countries, op. cit.
110 See OECD (2015). In It Together, op. cit.; and N. Lustig (2015). The Redistributive Impact of
Government Spending on Education and Health, op. cit.
111 N. Lustig et al. (2011). Fiscal Policy and Income Redistribution in Latin America: Challenging the
Conventional Wisdom. Tulane University Working Paper 1124. This showed that, for instance, Bolivia
spends five times more than Peru, but because funds are not targeted to the poor, the amount of
redistribution is limited and only slightly higher than in Peru.
112 S. Kidd, B. Gelders and D. Bailey-Athias (2017). Exclusion by design: An assessment of the
effectiveness of the proxy means test poverty targeting mechanism. Extension of Social Security (ESS)
Paper Series No. 56. Geneva: ILO and Development Pathways.
113 Asian Development Bank (2013). Social Protection Index: Assessing Results for Asia and the Pacific.
https://www.adb.org/publications/social-protection-index-assessing-results-asia-and-pacific
114 Ibid.
115 Development Pathways. (no date). Mongolia and Kyrgyzstan lose out in their struggle with the IMF
over the targeting of child benefits. https://www.developmentpathways.co.uk/blog/mongolia-kyrgyzsg-
child-benefits/
116 I. Ortiz, F. Durán-Valverde, K. Pal, C. Behrendt and A. Acuña-Ulate (2017). Universal Social
Protection Floors: Costing Estimates and Affordability in 57 Lower Income Countries. Extension of
Social Security Series No. 58. Geneva: ILO. http://www.social-
protection.org/gimi/gess/RessourcePDF.action?ressource.ressourceId=54915
117 H. Cortés Saenz and D. Itríago (2018). The Capture Phenomenon: Unmasking power. Oxfam
Intermon, June 2018 Available at:
https://www.oxfamintermon.org/sites/default/files/documentos/files/ENG_OXFAM_Intermon_Capture_
Methodology_2018.pdf
118 OECD (2004). Reviews of National Policies for Education: Chile 2004.
https://doi.org/10.1787/9789264106352-en; and J. Walker et al. (2016). Private Profit, Public Loss, op.
cit.
119 A. Kireyev (2013). Inclusive Growth and Inequality in Senegal. IMF Working Paper 13/215.
https://doi.org/10.5089/9781475580266.001
120 G. Canavire-Bacarreza, J. Martinez-Vazquez and C. Sepulveda (2012). Sub-national Revenue
Mobilization in Peru. International Center for Public Policy Working Paper 12-09.
121 For a useful discussion of some of these models, see K. Watkins and W. Alemayehu (2012).
Financing for a Fairer, More Prosperous Kenya: A review of the public spending challenges and
options for selected arid and semi-arid counties. Brookings Institution. https://www.brookings.edu/wp-
content/uploads/2016/06/08-financing-kenya-watkins.pdf.
122 See M. Martin and J. Walker (2015). Financing the Sustainable Development Goals: Lessons from
government spending on the MDGs. Government Spending Watch Report 2015. Oxfam and
Development Finance International. http://policy-practice.oxfam.org.uk/publications/financing-the-
sustainable-development-goals-lessons-from-government-spending-on-556597
123 N. Lustig (2012). Taxes, Transfers, and Income Redistribution in Latin America. World Bank Group.
Inequality in Focus series.
http://siteresources.worldbank.org/EXTPOVERTY/Resources/InequalityInFocusJuly2012FINAL.pdf
124 World Bank (2014). Voice and Agency: Empowering Women and Girls for Shared Prosperity.
http://www.worldbank.org/content/dam/Worldbank/document/Gender/Voice_and_agency_LOWRES.pd
f
125 UNESCO data (2013) provide evidence that education transforms development:
http://www.unesco.org/new/fileadmin/MULTIMEDIA/HQ/ED/GMR/excel/dme/Press-Release-En.pdf
126 UNESCO (2104) Education Global Monitoring Report https://en.unesco.org/gem-
report/report/2014/teaching-and-learning-achieving-quality-all
127 Ibid.
128 See, for example, UNESCO (2013). Girls’ education – the facts. http://en.unesco.org/gem-
report/sites/gem-report/files/girls-factsheet-en.pdf
129 M. Corak (2013). Income Inequality, Equality of Opportunity, and Intergenerational Mobility. Journal of
Economic Perspectives, 27 (3): 79-102; S.E. Mayera and L.M. Lopoo (2008). Government spending
and intergenerational mobility. Journal of Public Economics, Vol. 92, Issues 1–2, February 2008,
pp.139-158. https://www.sciencedirect.com/science/article/abs/pii/S004727270700059X - !; J. Jerrim
and L. Macmillan (2015). Income Inequality, Intergenerational Mobility, and the Great Gatsby Curve: Is
Education the Key? Social Forces, Vol. 94, Issue 2, 1 December 2015, pp.505-533.
https://doi.org/10.1093/sf/sov075
130 M. Meyers, D. Rosenbaum, C. Ruhm and J. Waldfogel (2004). Inequality in early childhood education
and care: What do we know? Social Inequality 22.
131 OECD Development Centre (2014). Unpaid Care Work: The missing link in the analysis of gender
gaps in labour outcomes. https://www.oecd.org/dev/development-gender/Unpaid_care_work.pdf
132 UN Women (2015). Progress of the World’s Women 2015–2016. Transforming Economies, Realizing
Rights. http://progress.unwomen.org/en/2015/pdf/UNW_progressreport.pdf For more examples see
https://www.ituc-csi.org/IMG/pdf/policy_brief_gender_gaps_social_protection_en.pdf
133 E. Samman et al. (2016). Women’s Work: Mothers, children and the global childcare crisis. Overseas
Development Institute. https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-
files/10333.pdf
134 T. Bhatkal (2016). Women’s work: mothers, children and the global childcare crisis. Oxfam blog.
http://policy-practice.oxfam.org.uk/blog/2016/05/womens-work
135 E. Samman et al. (2016). Women’s Work: Mothers, children and the global childcare crisis. Op. cit.
136 J.G. Stotsky (2016). Gender Budgeting: Fiscal Context and Current Outcomes.
https://www.imf.org/external/pubs/ft/wp/2016/wp16149.pdf
137 The IMF has produced extensive research and advice in this area. See:
http://www.imf.org/en/News/Articles/2016/07/26/14/42/NA072816-New-IMF-Study-Data-Tool-Track-
Fiscal-Policies
138 The extent of different services and the role they play in redistribution varies across countries (often
weighted against the level of pre-existing inequality, and pre-tax and transfer income inequality) and
the structure of spending. For example, the OECD has shown that New Zealand focuses on transfers
highly targeted at reducing poverty; Germany takes a lifecycle approach to redistribution; Sweden uses
a more Nordic model of large and mostly universal cash transfers, with a high level of spending. For
more information, see I. Joumard, M. Pisu and D. Bloch (2012). Tackling Income Inequality: The role of
taxes and transfers. OECD Journal: Economic Studies. http://dx.doi.org/10.1787/eco_studies-2012-
5k95xd6l65lt
139 All are higher-income countries (HICs) apart from Brazil and Costa Rica, which are upper-middle-
income countries (UMICs).
140 Health, education and cash transfers have been shown to be highly progressive – for example, in that
they help to make Costa Rica more equal. See P. Sauma and J. Diego Trejos (2014). Social Public
Spending, Taxes, Redistribution of Income, and Poverty in Costa Rica. CEQ Working Paper 18.
http://www.commitmentoequity.org/publications_files/Costa%20Rica/CEQWPNo18%20PubSpendTaxR
edistIncandPover%20Costa%20Rica.pdf
141 For example, it has infant mortality and life expectancy indicators comparable to those of developed
European countries. See M. del Rocío Sáenz, J. L. Bermúdez and M. Acosta (2010). Universal
Coverage in a Middle Income Country: Costa Rica. WHO. World Health Report (2010) Background
Paper 11. http://www.who.int/healthsystems/topics/financing/healthreport/CostaRicaNo11.pdf
142 P. Sauma and J. Diego Trejos (2014). Social Public Spending, Taxes, Redistribution of Income, and
Poverty in Costa Rica, op. cit.
143 OECD (2016). All together: Making growth more inclusive in Costa Rica. In OECD Economic Surveys:
Costa Rica 2016: Economic Assessment, Paris: OECD Publishing. DOI:
http://dx.doi.org/10.1787/eco_surveys-cri-2016-4-en
144 M. Bucheli, N. Lustig, M. Rossi and F. Amábile (2013). Social Spending, Taxes and Income
Redistribution in Uruguay. Commitment to Equity Institute. CEQ Working Paper 10.
https://doi.org/10.1596/1813-9450-6380
145 Uruguay’s social protection schemes have been shown to have a varied impact on inequality. N.
Lustig (2017). El impacto del sistema tributario y el gasto social en la distribución del ingreso y la
pobreza en América latina. Una aplicación del marco metodológico del proyecto compromiso con la
equidad (CEQ). http://www.commitmentoequity.org/wp-
content/uploads/2017/08/CEQ_WP62_Lustig_July06_2017.pdf See also discussion in OECD (2015).
In It Together, op. cit. Contributory pensions are equalizing in Brazil and are very slightly unequalizing
in Chile, see N. Lustig (2015). Inequality and Fiscal Redistribution in Middle Income Countries: Brazil,
Chile, Colombia, Indonesia, Mexico, Peru and South Africa. Center for Global Development. Working
Paper 410.
146 Forbes Argentina: IMF style austerity can’t be Macri’s only solution.
https://www.forbes.com/sites/afontevecchia/2018/06/08/argentina-imf-style-austerity-cant-be-macris-
only-solution/#4d3880187161
147 N. Lustig and C. Pessino (2013). Social Spending and Income Redistribution in Argentina During the
2000s: The rising role of noncontributory pensions. Commitment to Equity. CEQ Working Paper No. 5.
http://www.commitmentoequity.org/publications_files/Argentina/CEQWPNo5%20SocSpendRedist2000
sArgentina%20Jan%202013%20REVISED%20Aug%2031%202013.pdf
148 N. Lustig (2012). Taxes, Transfers, and Income Redistribution in Latin America, op. cit.
149 N. Lustig (2015). Most Unequal on Earth. IMF. Finance and Development. Vol. 52.
https://www.imf.org/external/pubs/ft/fandd/2015/09/pdf/lustig.pdf
150 Judged by the share of total income devoted to social spending, Ethiopia appears to be quite
committed to social progress: its level of spending is much higher than it was in today’s rich countries
when their income per capita levels were as low as in Ethiopia today, and there is some good pro-poor
spending, even if less redistributive (but given very high levels of poverty and low inequality, this is
likely). See World Bank (2015). Ethiopia Poverty Assessment 2014.
http://www.commitmentoequity.org/publications_files/Ethiopia/WorldBank%202014EthiopiaPovAssess
%20CEQChapt5%20Feb%202015.pdf; and N. Lustig (2015). The Redistributive Impact of Government
Spending on Education and Health: Evidence from Thirteen Developing Countries in the Commitment
to Equity Project. CEQ Working Paper 30.
http://www.commitmentoequity.org/publications_files/Comparative/CEQWPNo30%20RedisImpactGovn
tSpendEducHealth%20March%202015.pdf
151 R. Desai (2015). Does the Developing World Need a Welfare State to Eliminate poverty? Op. cit.
152 Gov't Increases Provincial Minimum Wages by 8.71% for 2018 http://jakartaglobe.id/news/govt-
increases-provincial-minimum-wages-8-71-2018/ and
153 J. Walker et al. (2016). Private Profit, Public Loss, op. cit.
154 UNICEF. Nigeria; The situation. https://www.unicef.org/nigeria/education.html
155 Based on DHS figures: https://dhsprogram.com/pubs/pdf/FR293/FR293.pdf
156 Nigeria infant mortality figures available at: http://data.worldbank.org/indicator/SH.DYN.MORT
157 The USA spends 16% of GDP on healthcare, combining public and private spending. Its public
spending, at 8.3% of GDP, is comparable with other nations with universal coverage such as France or
the UK, where private spending is negligible. This fact alone shows the scale of the inefficiency of the
US system. US public spending on health, for example on Medicare for the elderly, compares well with
public spending in the rest of the OECD, and has an impact on reducing inequality.
158 Especially tertiary care; for example, a 2010 OECD study (Koechlin et al. (2010)) found the US price
level of hospital services to be over 60% higher than the average of 12 other OECD countries in 2007.
https://www.oecd.org/unitedstates/49084355.pdf
159 See D. Mangan (2013). Medical Bills Are the Biggest Cause of US Bankruptcies: Study. CNBC.
http://www.cnbc.com/id/100840148
160 In total, we used country-level data on the incidence of spending for 60 countries wherever they were
available, using a combination of OECD data and data from the studies carried out by Commitment to
Equity (CEQ), kindly shared with Oxfam. The CEQ data were taken from the CEQ Institute's Data
Center on Fiscal Redistribution, based on the following CEQ Master Workbooks of Results: Argentina
(Rossignolo, 2016); Armenia (Younger and Khachatryan, 2014); Bolivia (Paz-Arauco et al., 2014);
Brazil (Higgins and Pereira, 2016); Chile (Martinez-Aguilar and Ortiz-Juarez, 2016); Colombia
(Melendez and Martinez, 2015); Costa Rica (Sauma and Trejos, 2014); Dominican Republic (Aristy-
Escuder et al., 2016); Ecuador (Llerena et al., 2014); El Salvador (Beneke, Lustig and Oliva, 2014);
Ethiopia (Hill, Tsehaye and Woldehanna, 2014); Georgia (Cancho and Bondarenko, 2015); Ghana
(Younger, Osei-Assibey and Oppong, 2016); Guatemala (Cabrera and Moran, 2015); Honduras
(Castañeda and Espino, 2015); Indonesia (Jellema, Wai Poi and Afkar, 2015); Iran (Enami, Lustig and
Taqdiri, 2016); Jordan (Abdel-Halim et al., 2016); Mexico (Scott, 2013); Nicaragua (Cabrera and
Moran, 2015); Peru (Jaramillo, 2015); Russia (Malytsin and Popova, 2016); South Africa (Inchauste et
al., 2016); Sri Lanka (Arunatilake et al., 2016); Tanzania (Younger, Myamba and Mdadila, 2016);
Tunisia (Shimeles et al., 2015); Uganda (Jellema et al., 2016), Uruguay (Bucheli et al., 2014) and
Venezuela (Molina, 2016). All are available at www.commitmenttoequity.org
161 J. Martinez-Vazquez, B. Moreno-Dodson and V. Vulovic (2011). The Impact of Tax and Expenditure
Policies on Income Distribution. Georgia State University: Andrew Young School of Public Policy
Studies.
162 Oxfam (2016). Fiscal Justice Global Track Record: Oxfam’s tax, budget and social accountability
work. http://policy-practice.oxfam.org.uk/publications/fiscal-justice-global-track-record-oxfams-tax-
budget-and-social-accountability-620087
163 We decided against using out-of-pocket expenditures because some countries (e.g. Sri Lanka) have
high out-of-pocket spending on health, but this is by the richest people, not the poorest. Their
government health systems are progressive, so they would be unfairly penalized by an indicator that
simply penalized high out-of-pocket expenditures. When data are available on out-of-pocket spending
for different groups in society, we will be able to include this.
164 J. Martinez-Vazquez and B. Moreno-Dodson (2014). The Impact of Tax and Expenditure Policies on
Income Distribution: Evidence from a Large Panel of Countries. Georgia State University.
165 Martinez-Vazquez et al. (2012) find that it has more than five times as much marginal effect as
education and health, and 10% more effect than social protection. Verbist et al. (2012) find that it has
had a much higher marginal effect in OECD countries, especially where access to it is means tested.
166 Housing benefits, meant to help people pay rents, are instead included as part of social protection
spending.
167 B. Ellmers (2016). The evolving nature of developing country debt and solutions for change. A
Eurodad discussion paper. For an analysis of the current global debt situation, see: J. Kaiser (2018).
Global Sovereign Debt Monitor 2018 by The Global Sovereign Debt Monitor 2018 is an extract form
Schuldenreport 2018, a joint publication by Jubilee Germany/erlassjahr.de - Entwicklung braucht
Entschuldung e.V.and Bischöfliches Hilfswerk MISEREOR e.V. published 15 March 2018. Available at:
http://erlassjahr.de/wordpress/wp-content/uploads/2018/04/Global-Sovereign-Debt-Monitor-2018.pdf
168 Government of Kenya. Estimates of Recurrent Expenditure of the Government of Kenya for the year
ending 30 June 2019. http://www.treasury.go.ke/component/jdownloads/send/198-2018-2019/775-
recurrent-volume-i.html
169 M. Devereux et al. (2016). G20 Corporation Tax Ranking. Oxford: Oxford University Centre for
Business Taxation.
170 Sources: Annex No. 3 - Tax Spending. General Budget of the State 2017 (DIGEPRES), Table 3, page
175: http://www.digepres.gob.do/proyecto-de-ley/2017/Tomo-1/ANEXO-No.-3-Estimacion-de- tax-
expenses-2017.pdf and Annex No. 2 - Information on expenditures of the Central Government 2017
(DIGEPRES). Economic Classification of Expenditure according to Functions, pages 110–111:
http://www.digepres.gob.do/proyecto-de-ley/2017/Volume-1/ANNEX-No.-2-Information-about-
expenses-of-Government-Central.pdf or fiscal transparency portal
http://transparenciafiscal.gob.do/para-que-se-gasta The budget formulated in ‘health’ and ‘water
supply’ is taken as a reference, and compared with the estimated volume of tax gas for 2017. The
category ‘water and sanitation’ must be replaced for ‘supply of drinking water’.
171 For more on Indonesia, see L. Gibson (2017). Towards a More Equal Indonesia: How the government
can take action to close the gap between the richest and the rest. Oxfam. http://oxf.am/ZbM5
172 Fair Tax Monitor website: https://maketaxfair.net/ftm/
173 Ibid.
174 Fair Tax Monitor (2016). Composite Report. https://maketaxfair.net/assets/wbb-
publications/1628/FTM%20Composite%20Report%202016.pdf
175 Fair Tax Monitor (2017). Bangladesh Report.
https://www.supro.org/images/publication/booklets/Fair_Tax_Monitor_2017.pdf
176 Fair Tax Monitor (2016). Composite Report. https://maketaxfair.net/assets/wbb-
publications/1628/FTM%20Composite%20Report%202016.pdf
177 For details, see J. Birchall and F. Marzia (2015). The Gender Dimensions of Expenditure and
Revenue Policy and Systems. IDS and DFID; C. Capraro (2014). Taxing Men and Women: Why
Gender is Crucial for a Fair Tax System. Christian Aid; GTZ (2008). Why Care About Taxation and
Gender Equality; and Swiss Development Cooperation (2015). Conclusions of a Facilitated E-
Discussion on Gender and Taxation.
178 C. Grown and I. Valodia (2010). Taxation and Gender Equity: A Comparative Analysis of Direct and
Indirect Taxes in Developing and Developed Countries. London and New York: Routledge.
179 For a similar conclusion from a review of gender-responsive budgeting across the world, see S. Quinn
(2016). A Survey of Gender Budgeting Efforts. IMF Working Paper 16/155.
http://www.imf.org/en/Publications/WP/Issues/2016/12/31/Europe-A-Survey-of-Gender-Budgeting-
Efforts-44148
180 For the UK, see for example the Women’s Budget Group: https://wbg.org.uk/
181 Lower CIT rates for SMEs may be a good policy option for governments wanting to tackle inequality,
particularly when, because of tax dodging by big corporations, effective tax rates can be higher for
SMEs than for big corporations.
182 Cuts in more economically significant countries are particularly concerning as more large corporations
do business in such countries, and the policies of these countries tend to have greater direct and
indirect impacts on other countries.
183 The incidence of CIT is made more complicated by global factors, like the impact of tax havens. Also
for multinational corporations, with owners and shareholders domiciled all over the world, the impact of
higher taxation on reducing the wealth of shareholders is distributed to many different nations, not
simply the one where the corporate tax is levied.
184 UK govenment HM Revenue and Customs (20180. https://www.gov.uk/government/publications/rates-
and-allowances-corporation-tax/rates-and-allowances-corporation-tax
185 World Economic Forum. (2016). Global Competitiveness Report 2016–2017.
https://www.weforum.org/reports/the-global-competitiveness-report-2016-2017-1/
186 The way that this has been scored and implemented is explained fully in the CRI 2018 methodology
note.
187 As referred to in the 2016 budget speech: https://indianexpress.com/article/business/budget/budget-
2016-arun-jaitley-union-budget-2016-full-text/gene
188 ECLAC and Oxfam (2016). Time to Tax for Inclusive Growth.
http://www.cepal.org/en/publications/39950-time-tax-inclusive-growth
189 For more details of these at country level, see Development Finance International (2016). IMF Tax
Policy Advice and TA: Is It Living Up To (Progressive) Expectations? Policy research report for Oxfam
International; and at global level, see IMF (2015). Options for Low Income Countries’ Effective and
Efficient Use of Tax Incentives for Investment. Staff Report.
https://www.imf.org/external/np/g20/pdf/101515.pdf
190 World Bank (2017). Kenya Economic Update, December 2017: Poised to Bounce Back?
https://openknowledge.worldbank.org/handle/10986/29033; and Government of Kenya Programme
Based Budget. http://www.treasury.go.ke/component/jdownloads/send/198-2018-2019/1221-
programme-based-budget.html?option=com_jdownloads The Kenyan government is projected to
spend $180m on free primary education in 2018/19.
191 E. Mwachinga (2013). Results of investor motivation survey conducted in EAC. World Bank,
presentation given in February 2013 in Lusaka, quoted in ActionAid (2013). Give Us a Break: How big
companies are getting tax-free deals. http://www.actionaid.org/sites/files/actionaid/give_us_a_break_-
_how_big_companies_are_getting_tax-free_deals_2.pdf
192 Annette Alstadsæter, Niels Johannesen, Gabriel Zucman (2017).Tax Evasion and Inequality.
http://gabriel-zucman.eu/files/AJZ2017.pdf
193 For more information, see E. Berkhout (2016). Tax Battles: The dangerous global race to the bottom
on corporate tax. Oxfam. http://oxf.am/ZuCG
194 For more on the negative effects of tax treaties, see ActionAid (2016). Mistreated: How shady tax
treaties are fuelling inequality and poverty. http://www.actionaid.org/2016/02/mistreated-how-shady-
tax-treaties-are-fuelling-inequality-and-poverty; IMF (2014). Spillovers in International Corporate
Taxation. Policy Paper. https://www.imf.org/external/np/pp/eng/2014/050914.pdf; SOMO (2013).
Should the Netherlands Sign Tax Treaties With Developing Countries? Centre for Research on
Multinational Corporations; and F. Weyzig (2013). Analysing Effects of Dutch Corporate Tax Policy on
Developing Countries. Netherlands Ministry of Foreign Affairs.
195 Tax Justice Network: https://www.taxjustice.net/2016/06/22/tax-treaties-overturned/
196 Common EU list of third country jurisdictions for tax purposes. Available at:
https://ec.europa.eu/taxation_customs/tax-common-eu-list_en
197 The Netherlands could take concrete measures to stop being a corporate tax haven, including;
implementing stronger rules against profit shifting to (other) tax havens; stop providing tax deals for
corporations that leave corporate profits (largely) untaxed (so-called ‘Excess profit rulings'); revert
legislation that favours large corporations with lower tax rates (Innovation box); and support steps at
European and global levels against corporate tax competition between countries
198 Despite ranking number 1 under the tax pillar, Australia is far from doing well on tax. Australia scores
40th on tax collection efforts and 35th on the fairness of its tax structure – well behind many of its
OECD peers. Australia has still room for improvement in collecting more and collecting
better. Australia’s final tax ranking at number 1, is more the consequence of DFI and Oxfam this year
taking into account the harmful tax practices of others. Compared with more aggressive countries,
Australia a does not currently partake in most aggressive harmful practices – such as special tax
holidays or patent boxes – for wealthy corporations and individuals. Australia has also progressed
positively on a range of actions under the OECD BEPS (Base Erosion and Profit Shifting) Project.
Nevertheless it could still improve the anti-avoidance legislation by strengthening its legislation through
an exit tax, for example. In addition, recent legislation passed or pursued by the government are very
likely to lower Australia’s score on tax in the future. This includes the tax reforms being introduced for
personal income taxes, which will flatten Australia’s current progressive tax system in the coming
years. This will disproportionately benefit wealthy, upper income earners. Debate has also currently
been shelved on further corporate tax rate cuts, but if implemented, proposed changes to corporate tax
rates would make Australia the latest country to join the global race to the bottom on corporate taxes.
Action is also needed in the area of public tax transparency, which is not measured as part of the CRI.
Australia needs to make reporting on country-by-country tax affairs public for large multinational firms,
to better crack down on tax avoidance and other harmful tax practices.
199 Ibid.
200 See R. Fenochietto and C. Pessino (2013). Understanding Countries’ Tax Effort, IMF Working Paper
13/244; J. Torres (2013). Revenue and Expenditure Gaps. IMF Working Paper 13/05; and subsequent
studies in IMF country documents and Regional Economic Outlooks and tax studies. See also CERDI
(2016). Tax Potential and Tax Effort: An Empirical Estimation for Non-resource Tax Revenue and
VAT’s Revenue; and J.P. Jimenez, J.C. Gomez Sabaini and A. Podesta (2013). Tax Gaps and Equity
in Latin America and the Caribbean. GTZ/BMZ/CEPAL Fiscal Studies Paper 16.
201 I. Macias-Aymar, D.Vasquez and M.Lawson (2018) Reward Work, not Wealth: To end the inequality
crisis, we must build an economy for ordinary working people, not the rich and powerful. Oxfam.
https://www.oxfam.org/en/research/reward-work-not-wealth
202 See, for example, IMF (2013). Fiscal Monitor: Taxing Times. IMF.
203 Countries analysed were Afghanistan, Argentina, Australia, Bangladesh, Belgium, Bolivia, Brazil,
Canada, China, Denmark, El Salvador, France, Germany, Ghana, India, Indonesia, Ireland, Italy,
Japan, Korea, Mexico, Netherlands, New Zealand, Niger, Nigeria, Russia, Spain, Senegal, South
Africa, Turkey, the UK and the USA.
204 Oxfam has increasingly been looking at wealth taxes in its country inequality reports. See for example,
Oxfam India (2018). Implications of Wealth Taxes on Inequality in India; L. Gibson (2016). Towards a
More Equal Indonesia, op. cit; and R. Georges (2017). Inequalities in Brazil: the Divide that Unites Us.
Oxfam. https://oxf.am/2yA3M9J
205 T.Matheson (2011). Taxing Financial Transactions: Issues and Evidence. IMF Working Paper.
206 The countries that abolished their wealth taxes were Austria, Denmark, Finland, Iceland, India,
Luxembourg, the Netherlands and Sweden. Germany stopped collecting wealth taxes in 1997.
207 D. Hardoon (2015). An Economy for the 1%, op. cit.
208 Ibid.
209 Ibid.
210 Andy Haldane, Chief Economist of the Bank of England, quoted in BBC News (2015). Shareholder
power ‘holding back economic growth’. http://www.bbc.co.uk/news/business-33660426
211 Ibid.
212 Ibid.
213 I. Macias-Aymar, D.Vasquez and M.Lawson (2018) Reward Work, not Wealth. Op. cit.
214 R. Wilshaw et al. (2015). In Work But Trapped in Poverty: A summary of five studies conducted by
Oxfam, with updates on progress along the road to a living wage. Oxfam. http://policy-
practice.oxfam.org.uk/publications/in-work-but-trapped-in-poverty-a-summary-of-five-studies-
conducted-by-oxfam-wit-578815; https://doi.org/10.21201/2015.578815
215 Ibid.
216 Worker Rights Consortium. (2013). Global Wage Trends for Apparel Workers, 2001–2011. Center for
American Progress.
https://www.americanprogress.org/issues/economy/reports/2013/07/11/69255/global-wage-trends-for-
apparel-workers-2001-2011/
217 Oxfam Australia (2017). What She Makes: Power and poverty in the fashion industry. Oxfam.
218 F. Jaumotte and C. Osario Bultron (2015). Power From The People, op cit.
219 Ibid.
220 M. Walters and L. Mishel (2003). How Unions Help all Workers. Economic Policy Institute.
https://www.epi.org/publication/briefingpapers_bp143/
221 A. Bruce and R. Skovoroda (2015). The Empirical Literature on Executive Pay: Context, the pay-
performance issue and future directions. Nottingham University Business School.
http://highpaycentre.org/files/academic_literature_review_FINAL.pdf
222 CIPD and High Pay Centre (2018). Executive Pay: review of FTSE 100 executive pay.
http://highpaycentre.org/files/CEO_pay_report.pdf
223 French law: Clifford Chance (2017). New French law imposing due diligence requirements in relation
to human rights, health and safety, and the environment.
https://www.cliffordchance.com/briefings/2017/03/new_french_law_imposingduediligenc.html
Dutch law: L. Unger (2017). Due diligence on child labour in the Netherlands; a new law.
https://www.linkedin.com/pulse/due-diligence-child-labour-netherlands-new-law-liesbeth-unger
224 KPMG (2015). KPMG Economic Analysis. Raising the minimum wage to the Living Wage would
benefit staff and businesses. http://www.livingwage.org.uk/news/kpmg-economic-analysis-raising-
minimum-wage-living-wage-would-benefit-staff-and-businesses
225 RAND Europe (2016). The impact of the National Minimum Wage on employment: a meta-analysis. A
report for the UK Low Pay Commission. https://www.rand.org/randeurope/research/projects/national-
minimum-wage.html
226 A. Smith (2015). Where there’s a political will…. Blog. Ethical Trade Initiative.
http://www.ethicaltrade.org/blog/where-theres-political-will
227 The Jakarta Post (2016). Indonesia to propose minimum wage for ASEAN workers.
http://www.thejakartapost.com/news/2016/06/03/indonesia-to-propose-minimum-wage-for-asean-
workers.html
228 Gallup and ILO. (2017). Towards a Better Future for Women and Work: Voices of Women and Men.
Retrieved 10 October 2017, from http://www.ilo.org/wcmsp5/groups/public/--- dgreports/---dcomm/---
ILO. (2016). Women at Work: Trends 2016. Retrieved 15 September 2017, from
http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---
229 F. Rhodes et al. (2016). Underpaid and Undervalued: How inequality defines women's work in Asia.
Oxfam. http://oxf.am/ZXPr
230 Ibid.
231 UNDP Human Development Report: Gender Inequality Index. http://hdr.undp.org/en/content/gender-
inequality-index-gii; and World Economic Forum (2016). The Global Gender Gap Report 2016.
http://reports.weforum.org/global-gender-gap-report-2016/
232 When all work – paid and unpaid – is accounted for, women work longer hours than men in every
region. According to a 2018 report by the ILO, women work an average of four hours and 25 minutes
per day, against one hour and 23 minutes for men. ILO (2018). Care Work and Care Jobs: For the
Future of Decent Work. https://www.ilo.org/global/publications/books/WCMS_633135/lang--
en/index.htm
233 The Economist (2016). A Proper Reckoning. http://www.economist.com/news/finance-and-
economics/21694529-feminist-economics-deserves-recognition-distinct-branch-discipline
234 ILO (2018). Care Work and Care Jobs: For the Future of Decent Work, op. cit.
235 All the facts in this paragraph are taken from ILO (2017) Global Employment Trends for Youth.
236 See International Trade Union Confederation (ITUC). Survey of Violations of Trade Union Rights.
http://survey.ituc-csi.org/Sri-Lanka.html?lang=en#tabs-3
237 Even the OECD SIGI index only measures whether legal procedures are correctly followed when
cases are brought before courts.
238 For more details, see BBC (2018). Iceland now the first country to enforce equal pay for women and
men. https://www.bbc.co.uk/bbcthree/article/253d8b3e-1891-43ab-8848-4a5110bda171
239 This box is drawn from OECD (2015). In It Together, op. cit.
240 Also important to take into account is the ranking of countries in the ITUC Global Rights Index. ITUC is
a confederation of national trade union centres, which together has 328 affiliated organizations in 162
countries and territories on all five continents, with a membership of 176 million, 40% of whom are
women. http://www.ituc-csi.org/ituc-global-rights-index-2015. The 2015 publication, the second
iteration, identifies the world’s worst countries in which to be a worker by rating 141 countries on a
scale from 1 to 5 based on the degree of respect for workers’ rights, and provides regional overviews
with country examples.
241 Fair Labor Association (2016). Toward Fair Compensation in Global Supply Chains: Factory pay
assessments in 21 countries. http://www.fairlabor.org/report/toward-fair-compensation-global-supply-
chains-factory-pay-assessments-21-countries
242 Clean Clothes Campaign (2013). Bangladesh Minimum Wage.
https://cleanclothes.org/livingwage/bangladesh-minimum-wage
243 ILO (2014). Wages and Working Hours in the Textiles, Clothing, Leather and Footwear Industries.
http://www.ilo.org/sector/Resources/publications/WCMS_300463/lang--en/index.htm
244 OECD. Social Institutions and Gender Index (SIGI). https://www.genderindex.org/
245 U.S. Department of State. Human Rights Reports. https://www.state.gov/j/drl/rls/hrrpt/
246 ILO’s estimation of vulnerable employment (including own-account workers and contributing family
workers) is used as a proxy of informal employment.
247 There are some who argue that the informal sector is a good thing in that it provides jobs for those
who otherwise would not have them, so by discounting for it we are not taking this into account.
Nevertheless, it remains the case that the informal sector is where the worst abuses of workers’ rights
and of women are largely found, with no recourse to trade unions or protection. The smaller the
informal sector and the better regulated it is, the better that is for vulnerable people.
248 World Bank (2016). Poverty in a Rising Africa.
http://www.worldbank.org/en/region/afr/publication/poverty-rising-africa-poverty-report
249 F. Alvaredo, L. Chancel, T. Piketty, E. Saez and G. Zucman (eds). (2017). World Inequality Report
2018. http://wir2018.wid.world/files/download/wir2018-full-report-english.pdf
250 R. van der Weide (2016). Is inequality underestimated in Egypt? Evidence from housing prices. World
Bank blog. http://blogs.worldbank.org/developmenttalk/inequality-underestimated-egypt-evidence-
housing-prices
251 For a full discussion and analysis of inequality in Latin America and the Caribbean see R. Canete et
al. (2015). Privileges That Deny Rights, op. cit.
252 This is known in economics as the Kuznets Curve, after the work of Simon Kuznets.
ACKNOWLEDGEMENTS
This report has been jointly produced by a small team from Oxfam and Development Finance
International.
In Oxfam, Max Lawson was the lead author of the final report and led the global Oxfam team.
Chiara Mariotti, Inigo Macias Aymar, Mikhail Maslenikov and Didier Jacobs gave support
research and data checking and in updating the methodology document. Kwesi Obeng, Ivan
Nikolic, Valentina Montanaro, Mustafa Talpur, Ati Canete, Mikhail Maslenikov and Chiara
Mariotti supported Oxfam affiliates and offices in contributing to the production process. Stefan
Verwer played a key role in championing the CRI and ensuring funding was available to enable
the project to go ahead. Namalie Jayasinghe and Rowan Harvey worked on the new gender
indicators, and Susana Ruiz, Henrique Alencar and Mikhail Maslenikov put together the new
indicator on Harmful Tax Practices. Many others from Oxfam contributed in different ways to
the report and the index. The team was coordinated by Mary Mshai Mkoji.
Excellent inputs were also received from most Oxfam country and regional offices and the 20
Oxfam affiliates which helped to update and improve global data by using national sources, and
to improve the overall methodology of the Index to reflect national realities more precisely.
At DFI, Matthew Martin was a joint author of the final report and led the conceptualisation and
construction of the index and the writing of the methodology document. The DFI team compiled
almost all the data for the index. The overall index database management and tax data teams
were led by David Waddock. The spending data team was led by Maria Holloway, and the
labour data team by Jeannette Laouadi. Programme Manager Jo Walker played a key role in
the design of the previous CRI 2017.
Excellent additional help on the design of the initial CRI 2017 index was received from external
peer reviewers and staff in the ILO (on labour and social protection), the IMF (on tax) and the
World Bank (on tax and gender labour), as well as Nanak Chand Kakwani and Alex Cobham of
the Tax Justice Network. Particular thanks also go to Nora Lustig and her team at CEQ led by
Ludovico Feoli for supplying data from their actual incidence studies; and to Alistair Usher and
Brett Dodge at Ergon Associates and Marta Fana at the University of Paris for input on the
labour indicators. Staff from the Asian Development Bank, CEPAL, the ILO and the OECD, and
officials from many developing countries, were also most helpful in supplying and explaining
their data on spending, tax and labour to DFI. Michaela Saisana and Beatrice Dhombres at the
Competence Center on Composite Indicators and Scoreboards (COIN), part of the European
Commission Joint Research Centre, provided excellent overall support and advice on the index,
and the robustness assessment which is available as a separate appendix.
Finally, thank you to Julie McCarthy of the Open Society Foundation for helping fund CRI 2018.

ENDORSEMENTS
Oxfam and Development Finance International’s insightful investigation into what

governments are actually doing to reduce inequality could not have come at a better
time. Based on careful, systematic and scientific use of the available data, it does much
more than simply rank countries to provide objective assessments of their performance
on this crucial issue; it provides an urgent wake-up call to all governments about what
can be done in terms of taxation, spending and labour policies. This should become as
prevalent as the Human Development Index as a yardstick to judge national
performance.
Jayati Ghosh
Professor, Jawaharlal Nehru University, New Delhi, India
In 2015, the world came together to agree the Sustainable Development Goals that
would shape the future, safeguard our planet, and ensure inclusive growth. As we strive
to meet them, tackling inequality emerges as the challenge of our generation,
everywhere, whether in rich or poor countries. Addressing it is a strategic imperative
and doing so requires evidence-based actions.
Oxfam and Development Finance International’s Commitment to Reducing Inequality
Index is a rigorous attempt to do so: to demonstrate the nature, the depth and the scope
of the problem and the implications for public policy. It shows that every country has to
make a step change.
Donald Kaberuka
7th President, African Development Bank (2005–15)
Africa's people are facing an inequality crisis. For the past few years Oxfam, as a key
part of the Global Inequality Alliance, has been able to put shocking figures on just how
extreme this is. Consider that the combined wealth of Nigeria’s five richest men –
$29.9bn – could end extreme poverty in that country, yet five million people there face
hunger. This Commitment to Reducing Inequality Index – technical though it sounds –
could be a powerful tool in the hands of citizens to demand change. In the face of
politicians’ platitudes, we can show hard facts. In the face of meaningless promises, we
can show the gaping holes where policies to reduce inequality could be. Information is
power, so let’s use it.
Kumi Naidoo
Secretary General, Amnesty International

This is joint Oxfam and Development Finance International report is written to share research results, to
contribute to public debate and to invite feedback.
For more information, or to comment on this report, email [email protected] or

[email protected]
© Oxfam International and Development Finance International October 2018
This publication is copyright but the text may be used free of charge for the purposes of advocacy,
campaigning, education, and research, provided that the source is acknowledged in full. The copyright
holder requests that all such use be registered with them for impact assessment purposes. For copying in
any other circumstances, or for re-use in other publications, or for translation or adaptation, permission
must be secured and a fee may be charged. Email [email protected]
The information in this publication is correct at the time of going to press.
Published by Oxfam GB for Oxfam International under ISBN 978-1-78748-341-5 in October 2018.
Oxfam GB, Oxfam House, John Smith Drive, Cowley, Oxford, OX4 2JY, UK. DOI: 10.21201/2018.3415
DEVELOPMENT FINANCE INTERNATIONAL

Development Finance International is a non-profit capacity-building, advocacy, advisory and research
group which works with more than 50 governments, international institutions and civil society organisations
worldwide to help development financing fight poverty and inequality.
For more details see www.development-finance.org and www.governmentspendingwatch.org
OXFAM
Oxfam is an international confederation of 20 organizations networked together in more than 90 countries,
as part of a global movement for change, to build a future free from the injustice of poverty. Please write to
any of the agencies for further information, or visit www.oxfam.org
Oxfam Intermón (Spain) (www.oxfamintermon.org)

Oxfam America (www.oxfamamerica.org)
Oxfam Ireland (www.oxfamireland.org)
Oxfam Australia (www.oxfam.org.au)
Oxfam Italy (www.oxfamitalia.org)
Oxfam-in-Belgium (www.oxfamsol.be)
Oxfam Mexico (www.oxfammexico.org)
Oxfam Brasil (www.oxfam.org.br)
Oxfam New Zealand (www.oxfam.org.nz)
Oxfam Canada (www.oxfam.ca)
Oxfam Novib (Netherlands) (www.oxfamnovib.nl)
Oxfam France (www.oxfamfrance.org)
Oxfam Québec (www.oxfam.qc.ca)
Oxfam Germany (www.oxfam.de)
Oxfam South Africa (www.oxfam.org.za)
Oxfam GB (www.oxfam.org.uk)
Oxfam Hong Kong (www.oxfam.org.hk)
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Observer: KEDV (Oxfam Turkey)
www.oxfam.org

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DEVELOPMENT FINANCE INTERNATIONAL AND OXFAM REPORT OCTOBER 2018

THE COMMITMENT TO REDUCING

1 Reducing inequality through social spending ....................................................... 20

2 Reducing inequality through tax policies .............................................................. 30

3 The role of work and wages in reducing inequality ............................................... 41

2 Commitment to Reducing Inequality Index 2018

THE COMMITMENT TO REDUCING INEQUALITY INDEX

3 Commitment to Reducing Inequality Index 2018

The 2018 audit is available at: http://policy-practice.oxfam.org.uk/publications/the-

4 Commitment to Reducing Inequality Index 2018

5 Commitment to Reducing Inequality Index 2018

6 Commitment to Reducing Inequality Index 2018

WHAT ARE THE MAIN FINDINGS OF THE CRI INDEX?

All countries could do more, even those near the top

WHICH COUNTRIES ARE DOING BEST?

7 Commitment to Reducing Inequality Index 2018

Lower-middle-income countries (LMICs) can also show strong commitment to reducing

8 Commitment to Reducing Inequality Index 2018

WHICH COUNTRIES HAVE IMPROVED THEIR

Box 2: Showing real commitment to reduce inequality – South Korea

9 Commitment to Reducing Inequality Index 2018

WHICH COUNTRIES ARE DOING WORST?

10 Commitment to Reducing Inequality Index 2018

Box 3: Latin America – making a wrong turn57

Which countries have got worse since last year?

11 Commitment to Reducing Inequality Index 2018

12 Commitment to Reducing Inequality Index 2018

14 Commitment to Reducing Inequality Index 2018

LIMITATIONS OF THE CRI INDEX

15 Commitment to Reducing Inequality Index 2018

16 Commitment to Reducing Inequality Index 2018

AREAS FOR IMPROVEMENT AND FURTHER

Economic inequality and gender

17 Commitment to Reducing Inequality Index 2018

Economic inequality, elite capture and political participation

Other policies of relevance to inequality

18 Commitment to Reducing Inequality Index 2018

19 Commitment to Reducing Inequality Index 2018

Global evidence on the impact of social spending on reducing inequality

A number of national governments have made commitments to increase spending on health

20 Commitment to Reducing Inequality Index 2018

Quality of spending matters

21 Commitment to Reducing Inequality Index 2018

22 Commitment to Reducing Inequality Index 2018

Spending decisions are often subject to influence by special interests

Gender, youth, social spending and social protection

23 Commitment to Reducing Inequality Index 2018

24 Commitment to Reducing Inequality Index 2018

Table 4: Spending on education – biggest increases and biggest cuts, CRI2017-2018

26 Commitment to Reducing Inequality Index 2018

What do the CRI indicators on social spending actually measure?

27 Commitment to Reducing Inequality Index 2018

Limitations of the CRI Index social spending indicators

28 Commitment to Reducing Inequality Index 2018

29 Commitment to Reducing Inequality Index 2018

Global evidence on the role of progressive tax in reducing inequality

30 Commitment to Reducing Inequality Index 2018

Box 6: The Fair Tax Monitor

31 Commitment to Reducing Inequality Index 2018