Income inequality is one of the most profound social, economic, and political challenges of our time. The gap between the rich and the poor has been regarded as a major concern for policy makers. This gap is at its highest level in decades for developed economies, while the inequality trend has been rising in many developing countries. In Asia, despite recent economic growth, income distribution has been worsening as well. This book contributes to the existing literature on inequality in Asia by focusing on three broad themes, corresponding to three parts of the volume. Part I offers an overview of inequality in Asia, Part II focuses on the drivers of rising inequality in Asia, and Part III presents country case studies.

Asia’s rapid economic growth has led to a significant reduction in extreme poverty, but accompanied by rising inequality. This book deals with three questions: What have been the trends of inequality in Asia and the Pacific? What are the key drivers of rising inequality in the region? How should Asian countries respond to the rising inequality? Technological change, globalization, and market-oriented reform have been the key drivers of Asia’s remarkable growth and poverty reduction, but they have also had significant distribution consequences. These three drivers of growth cannot be hindered because they are the sources of productivity improvement and betterment of quality of life. This book will be useful to those interested in policy options that could be deployed by Asian countries in confronting rising inequality.

This paper focusses on income inequality in Asia, its drivers and policies to combat it. It finds that income inequality has risen in most of Asia, in contrast to many regions. While in the past, rapid growth in Asia has come with equitable distribution of the gains, more recently fast-growing Asian economies have been unable to replicate the “growth with equity” miracle. There is a growing consensus that high levels of inequality can hamper the pace and sustainability of growth. The paper argues that policies could have a substantial effect on reversing the trend of rising inequality. It is imperative to address inequality of opportunities, in particular to broaden access to education, health, and financial services. Also fiscal policy could combat rising inequality, including by expanding and broadening the coverage of social spending, improving tax progressivity, and boosting compliance. Further efforts to promote financial inclusion, while maintaining financial stability, can help.

Developing Asia’s sustained rapid growth has improved general living standards and lifted hundreds of millions of Asians out of poverty within a generation. Yet the region now finds itself confronting rising inequality. Countries where inequality has worsened over the past 2 decades collectively account for over 80% of Asia’s population. As a result, governments across the region have begun to accord a higher priority to promoting more inclusive growth. The international experience, especially the experience of the advanced economies, suggests that fiscal policy can make a potent contribution to reducing inequality. This book systematically explores the relationship between both sides of fiscal policy—public spending as well as taxes and other fiscal revenues—and inequality in Asia at great depths. On the basis of the analysis, the book sets forth a number of concrete options for rendering fiscal policy a more effective tool for more inclusive growth that benefits all Asians. Inequality, Inclusive Growth, and Fiscal Policy in Asia is written in response to an issue of growing demand in most Asian countries, and it comes at a time when Asian governments are also beginning to use fiscal policy to bridge the glaring disparities between the rich and the poor of the region. As such, the book will be a highly valuable reference for researchers, policy makers, and students as well.

While Asia’s growth record in recent decades is remarkable, it has been marred by rising inequalities. This book looks at recent trends of income and non-income inequalities in developing Asian countries, discusses their underlying driving forces, and examines key policy issues that need to be addressed to ensure that the benefits of growth will be more equitably shared in Asia. The book also presents a set of country studies that provide rich information on growth, poverty and inequality dynamics and the policy challenges that arise in marching toward inclusive growth.

Development Asia examines Asia's widening inequality from many different perspectives. It looks at the role of globalization in producing inequality, and considers the disputed relationship between inequality and economic growth. Beneath the gloss of Asia's newfound prosperity lies an unsettling reality. Rising inequality has denied the benefits of Asia's economic growth to many millions of its citizens. The problem is worsening as the region's rich get richer much faster than the poor, who miss out on the income, education, and health care they need to lead fulfilling lives. Asia isn't the only region suff ering from a wealth gap, but unlike others it has failed so far to narrow the divide. Most of its large economies have shown rising income inequality since the 1990s, and rural poverty is outpacing urban poverty across much of the continent. If left unchecked, the consequences of this trend could be dire. In this issue, Development Asia examines Asia's widening inequality from many different perspectives. It looks at the role of globalization in producing inequality, and considers the disputed relationship between inequality and economic growth.

Inequality is a defining global issue of our times. Southeast Asia stands out in some ways; the 2010s have seen most countries in the region reduce income gaps. Nonetheless, inequality levels remain high, especially in the middle-income to high-income countries, and popular disaffection and economic anxiety prevail, even while official statistics may paint more buoyant scenarios. The age-old problem of group-based exclusion in the development process manifests in new ways. This book provides up-to-date overviews of inequality levels and trends, primarily related to income, but also wealth and other socio-economic variables pertaining to education and health. The country chapters also examine salient themes of inequality, especially structural changes and public policies to redress inequality and exclusion, labour market developments, population groups, regional dynamics, and informal economies. We gain an appreciation for the unique conditions and diverse experiences of each country, and draw comparative insights across the region. “This is an impressive collection of papers written by scholars from Southeast Asia and addressing an important set of issues which deserve serious attention from policymakers. Inequality and social exclusion are problems which never seem to go away, even in the high-income countries, and this collection will be valuable for all those seeking to understand how serious the situation is in eight Southeast Asian states. The editors are to be congratulated on bringing together such a timely book.” Anne Booth, Emeritus Professor of Economics, School of Oriental and African Studies “This compilation of recent research on Southeast Asian economic inequalities by Lee and Choong underscores the rapid progress being made. The authors from the region underscore the global shift in research and policy attention in this century. Reflecting data and methodological diversity, the book variedly captures some ‘intersectionality’ of inequalities beyond the old focus on interpersonal and household income distribution.” Jomo KS, Fellow, Academy of Science, Malaysia “In societies across the world, rising inequality has become a critical issue over the past generation. Besides basic issues of justice, inequality between people obstructs the collective decision-making needed for societies to progress. This book is the most comprehensive study of inequality in Southeast Asia. It stresses that each society is different, but the solutions are common—good data, proper understanding, multidimensional approaches, strong institutions and popular agency.” Pasuk Phongpaichit, Emeritus Professor, Chulalongkorn University