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With inequality reduction now being officially and broadly recognised as a key development objective with its own Sustainable Development Goal (SDG 10), there is a need for simple, economical and quick methodologies with which to focus on this area and assess progress. This paper presents such a methodology, which allows a rough assessment of the potential impacts of development cooperation on income, consumption and wealth inequality. This is important, as a rigorous causal analysis of the contribution development cooperation makes to reducing a partner country's inequality is complex and costly. First, the relative contribution of targeted development cooperation programmes and projects to the economies of partner countries tends to be small (though admittedly not in all cases). Second, a myriad of factors contribute to changes in inequality in any given country, and assessing the impact of all of them is a complex, imprecise, time-consuming and resource-intensive exercise. The proposed methodology therefore makes use of SDG 10's focus on the poorest 40% of the population to assess whether development cooperation in a given partner country has been directly targeted at them. This Briefing Paper presents a simple methodology to support donors or multilateral development cooperation institutions in assessing, addressing and mainstreaming inequality in their operations. The first step of the methodology recommends that development agencies identify a country's needs in terms of inequalities as a basis for providing support for policies and interventions to address them. The second step consists of making sure that inequality has been taken into account in key strategic documents. Subsequent steps aim to assess whether the design and implementation of specific programmes, projects and budget support operations targets inequalities. In the case of projects and programmes, the recommended assumption is that if their direct beneficiaries are in the bottom 40%, then these projects and programmes can be considered to address inequality. For the sake of simplicity and practicality, this does not account for general equilibrium or indirect effects. In the case of budget support of any kind, any indication of the distributional profile of government expenditure in the area of support can be used as a proxy for the support's distributional profile. As a complement to this, it may be possible in many cases to analyse whether the subnational geographic allocation of funds corresponds to the location of the national bottom 40%. Despite many good reasons why funding should not always go to poorer areas, this information may provide important insights. A key limitation of this approach is that disregarding indirect or general equilibrium effects does not establish any causal link between targeting and macroeconomic effects on inequality. Yet it does allow an assessment of the degree to which portfolios (or parts of them) are potentially addressing inequality, thereby providing important feedback for development actors.

With inequality reduction now being officially and broadly recognised as a key development objective with its own Sustainable Development Goal (SDG 10), there is a need for simple, economical and quick methodologies with which to focus on this area and assess progress. This paper presents such a methodology, which allows a rough assessment of the potential impacts of development cooperation on income, consumption and wealth inequality.This is important, as a rigorous causal analysis of the contribution development cooperation makes to reducing a partner country's inequality is complex and costly. First, the relative contribution of targeted development cooperation programmes and projects to the economies of partner countries tends to be small (though admittedly not in all cases). Second, a myriad of factors contribute to changes in inequality in any given country, and assessing the impact of all of them is a complex, imprecise, time-consuming and resource-intensive exercise.The proposed methodology therefore makes use of SDG 10's focus on the poorest 40% of the population to assess whether development cooperation in a given partner country has been directly targeted at them.This Briefing Paper presents a simple methodology to support donors or multilateral development cooperation institutions in assessing, addressing and mainstreaming inequality in their operations. The first step of the method¬ol¬ogy recommends that development agencies identify a country's needs in terms of inequalities as a basis for providing support for policies and interventions to address them. The second step consists of making sure that inequality has been taken into account in key strategic documents. Subsequent steps aim to assess whether the design and implementation of specific programmes, projects and budget support operations targets inequalities.In the case of projects and programmes, the recommended assumption is that if their direct beneficiaries are in the bottom 40%, then these projects and programmes can be considered to address inequality. For the sake of simplicity and practicality, this does not account for general equilibrium or indirect effects. In the case of budget support of any kind, any indication of the distributional profile of government expenditure in the area of support can be used as a proxy for the support's distributional profile.As a complement to this, it may be possible in many cases to analyse whether the subnational geographic allocation of funds corresponds to the location of the national bottom 40%. Despite many good reasons why funding should not always go to poorer areas, this information may provide important insights.A key limitation of this approach is that disregarding indirect or general equilibrium effects does not establish any causal link between targeting and macroeconomic effects on inequality. Yet it does allow an assessment of the degree to which portfolios (or parts of them) are potentially addressing inequality, thereby providing important feedback for development actors.

The distribution of global income is extremely unequal. In 2011, the richest 20 per cent of the world's population controlled more than 80 per cent of the world's income, compared to less than 2 per cent for the poorest 20 per cent. In many parts of the developing world, inequality remains stubbornly high even as absolute numbers of people living in poverty fall. Studies by the World Bank, the IMF, UNDP and UNICEF have all shown that high inequality is detrimental to sustainable economic growth and long-term poverty reduction. While recent EU policy statements have recognised that inequality is a major development challenge, few concrete measures are in place for tackling it. The European Commission's October 2011 "Agenda for Change" proposed that the EU would focus on "inclusive and sustainable growth", thereby enabling more people to benefit from wealth and job creation. But the Agenda does not grapple with the politically sensitive question of what "inclusive" actually means. In August 2012 the Commission started to answer this question with a "Communication on social protection in EU development cooperation". This document makes some welcome suggestions, including placing social protection at the heart of dialogue with developing countries. There is no controversy about the need to equip workers with the education and skills needed to participate in a growing economy. Only a mean-spirited few would argue with the benefits of universal healthcare and social protection for improving equality of opportunity. Reducing income inequality is, however, also crucial. This raises difficult questions for EU development policy. First, should the EU devote more political and financial resources to support efforts to confront inequality in developing countries? If so, should these be primarily focussed on middle-income countries, or leastdeveloped countries as well? Second, what is the role of the state vis-à-vis the private sector? Would facilitating more private sector activity help reduce inequality? Third, what are the lessons from the EU's own experiences in promoting inclusiveness that could be translated into its international development policies? How can these lessons be offered to partners without creating an impression that the EU is lecturing them? Measures aimed at reducing income disparities should be central to any development strategy, both for middle- income countries where income is growing and for poorer countries where mechanisms for capturing and redistributing wealth are absent. In the current political climate, such progressive thinking is out of favour in most European countries. The EU is shying away from models that worked for Europe itself and have started to work in parts of Latin America. Rather, it is replicating the "growth-plus-safety nets" model, with added emphasis on the private sector. While this is an improvement on discredited "Washington Consensus" approaches, it is still predicated on the "trickle down" philosophy and does not target inequality specifically.

Das globale Einkommen ist äußerst ungleich verteilt: Die wohlhabendsten 20 % der Weltbevölkerung verfügten 2011 über mehr als 80 % des Welteinkommens, verglichen mit weniger als 2 % für die ärmsten 20 %. In vielen Entwicklungsländern hält sich die Ungleichheit hartnäckig, obwohl die absolute Zahl der in Armut lebenden Menschen zurückgeht. Studien der Weltbank, des Internationalen Währungsfonds (IWF), des UN-Entwicklungsprogramms (UNDP) und des UN-Kinderhilfswerks (UNICEF) zeigen: Ausgeprägte Ungleichheit erschwert ein nachhaltiges Wirtschaftswachstum und den dauerhaften Rückgang von Armut. Trotz jüngster Grundsatzerklärungen, dass Ungleichheit ein erhebliches Entwicklungshindernis darstellt, unternimmt die Europäische Union (EU) nur wenig, um diese zu bekämpfen. In der "Agenda für den Wandel" der Europäischen Kommission vom Oktober 2011 kündigt die EU an, sich auf "ein breitenwirksames und nachhaltiges Wachstum" zu konzentrieren, durch das mehr Menschen von Wohlstand und der Schaffung von Arbeitsplätzen profitieren. Allerdings setzt sich die Agenda nicht mit der politisch heiklen Definition von "breitenwirksam" auseinander. Um dies nachzuholen, veröffentlichte die Kommission im August 2012 eine Mitteilung über "Sozialschutz in der Entwicklungszusammenarbeit der Europäischen Union". Das Dokument enthält einige begrüßenswerte Vorschläge, wie den, Sozialschutz in den Mittelpunkt des Dialogs mit Entwicklungsländern zu stellen. Es ist unbestritten, dass Arbeitnehmer mit den Kenntnissen und Fähigkeiten ausgestattet werden müssen, um sich sich in eine wachsende Wirtschaft einzubringen. Selbstverständlich sind eine allgemeine Gesundheitsversorgung und soziale Sicherheit wichtig um Chancengleichheit zu erhöhen. Ebenso wichtig ist es indes, Einkommensungleichheit abzubauen. Damit stellen sich der europäischen Entwicklungspolitik schwierige Fragen. Erstens: Sollte die EU mehr politische und finanzielle Ressourcen bereitstellen, um die Ungleichheit in Entwicklungsländern zu bekämpfen? Wenn ja, sollten primär Länder mit mittlerem Einkommen oder auch die am wenigsten entwickelten Länder unterstützt werden? Zweitens: Welche Rolle spielt der Staat mit Blick auf die Privatwirtschaft? Würde eine Förderung letzterer helfen, Ungleichheit zu verringern? Drittens: Welche eigenen Erfahrungen mit der Förderung von Inklusivität könnte die EU in die Entwicklungspolitik einbringen? Wie kann die EU diese Lehren Partnern anbieten, ohne als belehrend empfunden zu werden? Maßnahmen zum Abbau von Einkommensdisparitäten sollten Kernelement jeder Entwicklungsstrategie sein,sowohl für Länder mit wachsendem mittlerem Einkommen als auch für ärmere Länder, in denen Mechanismen zur Umverteilung von Mitteln fehlen. Im aktuellen politischen Klima sind solche progressiven Überlegungen im Großteil Europas unpopulär. Die EU schreckt vor Modellen zurück, die für Europa funktionierten und in Teilen Lateinamerikas zu funktionieren beginnen. Stattdessen repliziert sie das "Wachstum-plus-Sicherungsnetze"-Modell – mit zusätzlicher Betonung der Privatwirtschaft. Obwohl dies eine Verbesserung gegenüber des diskreditierten "Washington Consensus" ist, basiert es dennoch auf der "Trickle-down" -Philosophie und zielt nicht explizit auf Ungleichheit ab.

This edited volume provides an assessment of an increasingly fragmented aid system. Development cooperation is fundamentally changing its character in the wake of global economic and political transformations and an ongoing debate about what constitutes, and how best to achieve, global development. This also has important implications for the setup of the aid architecture. The increasing number of donors and other actors as well as goals and instruments has created an environment that is increasingly difficult to manoeuvre. Critics describe today's aid architecture as 'fragmented': inefficient, overly complex and rigid in adapting to the dynamic landscape of international cooperation. By analysing the actions of donors and new development actors, this book gives important insights into how and why the aid architecture has moved in this direction. The contributors also discuss the associated costs, but also potential benefits of a diverse aid system, and provide some concrete options for the way forward.

Since the 1980s, income inequality has increased substantially in several countries. Yet the political logic that triggered rising inequality in some places but not in others remains poorly understood. This paper builds a theory that links central bank independence to these dynamics. It posits the existence of three mechanisms that tie central bank independence to inequality. First, central bank independence indirectly constrains fiscal policy and weakens a government's ability to engage in redistribution. Second, central bank independence incentivizes governments to deregulate financial markets, which generates a boom in asset values. These assets are predominantly in the hands of wealthier segments of the population. Third, to contain inflationary pressures, governments actively promote policies that weaken the bargaining power of workers. Together, these policies strengthen secular trends towards higher inequality according to standard indicators. Empirically, the analysis finds a strong relation between central bank independence and inequality, as well as support for each of the mechanisms. From a policy perspective, our findings contribute to knowledge on the undesirable side effects of central bank independence.