PARIS: EU-style policies are the best-suited to reduce global inequality and poverty, a report by a team of economists said on Thursday, warning of catastrophe if the stunning concentration of global wealth is left unchecked.

The World Inequality Report draws on the work of over 100 researchers from more than 70 countries found that during that over the past 35 years the global top 1 per cent of earners captured twice as much income growth as the bottom 50pc.

The report, drafted by a team including star French economist Thomas Piketty, used a massive database combining economic statistics and survey data from around the world.

They found that fast growth in developing countries such as China and India meant that the poorest half of the world population still saw their income grow significantly in recent decades.

The middle class meanwhile got squeezed.

“In recent decades, income inequality has increased in nearly all countries, but at different speeds, suggesting that institutions and policies matter in shaping inequality,” said the researchers.

They found market liberalisation and privatisations led to increases in inequality in Russia, China and India, but at different rates reflecting the speed at which they opened up their economies.

Meanwhile they found “the divergence in inequality levels has been particularly extreme between Western Europe and the United States, which had similar levels of inequality in 1980 but today are in radically different situations.”

The top 1pc of earners captured nearly 10pc of the income in both areas in 1980. In 2016 it had climbed to 12pc in Western Europe but had more than doubled to 20pc in the United States.

Published in Dawn, December 15th, 2017