Acronyms and abbreviations 13
Preface 15
Executive Summary 17
Part 1 Opportunities and Challenges for Social Cohesion
Chapter 1. Shifting Wealth: A Window of Opportunity 31
Introduction 32
Shifting up a gear: The spread of convergence in the developing world 33
Shifting wealth: New resources for development 36
Conclusion: Towards resource availability and sustainability 47
Notes 47
References 48
Chapter 2. Social Cohesion and Development 51
Introduction 52
Defining social cohesion 52
Traditional and subjective measurement on social cohension 55
Why does social cohension matter 57
Shifting wealth, social cohesion and development - A simple framework 60
Conclusion 61
Notes 61
References 61
Chapter 3. The Challenges for Social Cohesion in a Shifting World 65
Introduction 66
Structural transformation Challenges 66
Employment challenges 70
Migration challenges 75
Agricultural challenges 80
Conclusion 86
Notes 87
References 87
Chapter 4. Inequality 93
Introduction 94
Trends in inequality between and within countires 95
Understanding the distributional challenges of social cohesion 99
Disentangling patterns of distrivutional change: The example of education 108
Social cohesion and preferences for redistribution 115
Conclusion 118
Notes 119
References 121
Part 2 Building a polict Agenda for Social Cohesion in Times of Shifting Wealth
Chapter 5. Sustainable Fiscal policies for Stronger Social Contracts 129
Introduction 130
How social coesion and fiscal policy are linked 130
Taxation in developing countries 134
Social cohesion and fiscal legitimacy: Evidence and policies 137
Sustainable fiscal policies 143
Key principles of fiscal reform 145
Conclusion 147
Notes 147
References 148
Chapter 6. Employment and Social Protection Policies for social Cohesion 153
Introduction 154
Employment and social cohesion 155
Labour market institutions and wage determination 157
Implications for social protection 167
The need for greater cogerence across social and economic policies 174
Conclusion 176
Notes 177
Reference 178
Chapter 6. Employment and Social Protection Pollicies for Social Cohesion 153
Introduction 154
Employment and social cohesion 155
Labour market institutions and wage determination 157
Implications for social protection 167
The need for greater coherence across social and economic policies 174
Conclusion 176
Notes 177
References 178
Chapter 7. Social Cohesion and Policies for Enhancing Civic Participation 183
Introduction 184
New governance challenges in the period of shifting wealth 184
Why civic participatioin matters for social cohesion 184
Bringing government closer to the people: Service delivery, accountbiliy and decentralisation 192
Women's role in political participation 196
New tools for civic participation: The role of ICTs and virtual communities 197
What the new ICT tools mean for political governance and social cohesion 201
Conclusion 203
Notes 204
References 205
Chapter 8. Cross-cutting Policy Issues 209
Introduction 210
Education 210
Gender equaility 216
Food policy 218
Integration of immigrants 225
Transforming and adapting institutions 227
Conclusion 230
Notes 230
References 231
Chapter 9. Fostering Social Cohesion in a Shifting World 235
Introduction 236
Developing a fiscally sustainable social cohesion agenda 237
Framing social cohesion policies 243
The role of donors in promoting social cohesion 245
Conclusion 250
Notes 251
References 251
Statistical Annex: The Four-Speed World Classification 255
Tables
1.1 The four-speed world classification 35
1.2 Growing number of converging countries in the 2000s 36
1.3 Official development assistance in Brazil, India and South Africa 40
2.1 Preferred child qualities, 2005-08
2.2 Selected empirical evidence of the relation between social cohesion and development 59
3.1 Average changes in shares of value added by sector and by speed, 1990-2009 67
3.2 Global employment to output elasticities by sector and by speed, 1990-2009 72
3.3 Net buyers of staple foods 83
4.1 Changes in the Fini coefficient, early 2000s 98
4.2 Countervailing forces affection dynamics of household income and wage inequality in selected countries, late 1970s-mid 2000s 110
4.3 Educational enrolment and attainment in the 2000s 112
6.1 Employment allocation and the incidence of strikes in US MOFAS, 1999-2008 165
8.1 Advantages and disadvantages of food and cash transfers 221
9.1 Public social expenditure in selected countries 238
9.2 Estimating the costs of cash transfers in West and Cnetral Africa 240
9.3 Budgetary and implict costs of fuel and food subsidies in selected countries 242
Figures
1.The components of social cohesion 17
2. Fast growth in the developing world in the 2000s 18
3. Changes in life satisfaction. education and growth performance in the 2000s 19
4. Gini coefficients before and after taxes and transfers in developing countries 20
5. Fiscal revenues as percentage of GDP, 2008-08 21
1.1 Export flows by region 33
1.2 Foreign direct investment inflows to bdeveloped and developing econoimics 33
1.3 Income convergence in the 2000s 34
1.4 The four-speed world classification in the 2000s 35
1.5 Current account balance, advanced vis-a-vis emerging 37
1.6 Trade balances in Eastern Asia, sub-Saharan Africa and South America, 1990-2009 37 1.7 Trade balance by primary commodity in sub-Saharan Africa and South America, 1995 -2009 38
1.8 Share of exports to developingcountries, by region 39
1.9 Net foreign direct investment and net workers' remittances in converging countries in the 1990s and 2000s40
1.10 Change in foreign exchange reserves (absolute value)by region 41
1.11 Reserves beyond short-term precautionary conditions 41
1.12 Value of SWF investments by target region. 20069-09 42
1.13 Savings as ratio of GDP 42
1.14 Fiscal revenues as percentage of GDP. 2000-08 43
1.15 Tax tarios of African oil producers versus non oil producers by tax sources 44
1.16 Fiscal revenues from natural resources in Latin America and the Caribvean 45
1.17 Debt-to-GDP ratio in the four-speed world 45
1.18. Avverage fiscal balance and debt ratios in converging countries in the 1990s and 2000s 46
2.1. The components of social cohesion 54
2.2. Absoilte versus relative economic gradient of life satisfaction across countries, 2008 56
2.3. Shifting wealth, social cohesion and development: A simple framework 60
3.1. The oace of structural change ny sector in developing economies, 1990-2009 67
3.2. Labour income as a share of value added by region, 1990-2008 71
3.3. Labour income as a share of value added in selected countries, 1990-2007 71
3.4. Increasing informality in growth periods 73
3.5. The top ten urbanising countries in 1990-2010 76
3.6. Global stock of international migrants, 2005 78
3.7. Civil unrest caused by rising food prices?, 1996-2010 80
3.8. Structural break in food prices in the 2000s 81
3.9. A wide range of national food production outcomes over the last decade 82
3.10. Officially recorded land transfers, 2004-09 85
4.1. Composition of gloval inequality 96
4.2. Changes in the Gini index in the BRICS, 1990-2007 97
4.3. Growth incidence curve showing reduction in Brazilian inquality due to pro-poor growth, 2001-06 100
4.4. Absolute versus relative poverty in China and Brazil, 1981-2007 101
4.5. The economic gradient of national and relative poverty lines, for 73 countries 102
4.6. Global middle class consumption, 2000-50 103
4.7. Rising incomes at the top in both rich and emerging countries 105
4.8. Distribution of equivalised incomes is polarised by race in South Africa, 2008
4.9. Distribution of wages is polarised by employment status in Mexico, 2007Q2 108
4.10. Returns to education in Brazil, 2001-06 113
4.11. Changes in returns to education disproportionately affected growth in wages of the upper deciles in Brazil, 2001-06 114
4.12. Preferences for redistrilbution, early 1990s to mid-2000s 116
Preface 15
Executive Summary 17
Part 1 Opportunities and Challenges for Social Cohesion
Chapter 1. Shifting Wealth: A Window of Opportunity 31
Introduction 32
Shifting up a gear: The spread of convergence in the developing world 33
Shifting wealth: New resources for development 36
Conclusion: Towards resource availability and sustainability 47
Notes 47
References 48
Chapter 2. Social Cohesion and Development 51
Introduction 52
Defining social cohesion 52
Traditional and subjective measurement on social cohension 55
Why does social cohension matter 57
Shifting wealth, social cohesion and development - A simple framework 60
Conclusion 61
Notes 61
References 61
Chapter 3. The Challenges for Social Cohesion in a Shifting World 65
Introduction 66
Structural transformation Challenges 66
Employment challenges 70
Migration challenges 75
Agricultural challenges 80
Conclusion 86
Notes 87
References 87
Chapter 4. Inequality 93
Introduction 94
Trends in inequality between and within countires 95
Understanding the distributional challenges of social cohesion 99
Disentangling patterns of distrivutional change: The example of education 108
Social cohesion and preferences for redistribution 115
Conclusion 118
Notes 119
References 121
Part 2 Building a polict Agenda for Social Cohesion in Times of Shifting Wealth
Chapter 5. Sustainable Fiscal policies for Stronger Social Contracts 129
Introduction 130
How social coesion and fiscal policy are linked 130
Taxation in developing countries 134
Social cohesion and fiscal legitimacy: Evidence and policies 137
Sustainable fiscal policies 143
Key principles of fiscal reform 145
Conclusion 147
Notes 147
References 148
Chapter 6. Employment and Social Protection Policies for social Cohesion 153
Introduction 154
Employment and social cohesion 155
Labour market institutions and wage determination 157
Implications for social protection 167
The need for greater cogerence across social and economic policies 174
Conclusion 176
Notes 177
Reference 178
Chapter 6. Employment and Social Protection Pollicies for Social Cohesion 153
Introduction 154
Employment and social cohesion 155
Labour market institutions and wage determination 157
Implications for social protection 167
The need for greater coherence across social and economic policies 174
Conclusion 176
Notes 177
References 178
Chapter 7. Social Cohesion and Policies for Enhancing Civic Participation 183
Introduction 184
New governance challenges in the period of shifting wealth 184
Why civic participatioin matters for social cohesion 184
Bringing government closer to the people: Service delivery, accountbiliy and decentralisation 192
Women's role in political participation 196
New tools for civic participation: The role of ICTs and virtual communities 197
What the new ICT tools mean for political governance and social cohesion 201
Conclusion 203
Notes 204
References 205
Chapter 8. Cross-cutting Policy Issues 209
Introduction 210
Education 210
Gender equaility 216
Food policy 218
Integration of immigrants 225
Transforming and adapting institutions 227
Conclusion 230
Notes 230
References 231
Chapter 9. Fostering Social Cohesion in a Shifting World 235
Introduction 236
Developing a fiscally sustainable social cohesion agenda 237
Framing social cohesion policies 243
The role of donors in promoting social cohesion 245
Conclusion 250
Notes 251
References 251
Statistical Annex: The Four-Speed World Classification 255
Tables
1.1 The four-speed world classification 35
1.2 Growing number of converging countries in the 2000s 36
1.3 Official development assistance in Brazil, India and South Africa 40
2.1 Preferred child qualities, 2005-08
2.2 Selected empirical evidence of the relation between social cohesion and development 59
3.1 Average changes in shares of value added by sector and by speed, 1990-2009 67
3.2 Global employment to output elasticities by sector and by speed, 1990-2009 72
3.3 Net buyers of staple foods 83
4.1 Changes in the Fini coefficient, early 2000s 98
4.2 Countervailing forces affection dynamics of household income and wage inequality in selected countries, late 1970s-mid 2000s 110
4.3 Educational enrolment and attainment in the 2000s 112
6.1 Employment allocation and the incidence of strikes in US MOFAS, 1999-2008 165
8.1 Advantages and disadvantages of food and cash transfers 221
9.1 Public social expenditure in selected countries 238
9.2 Estimating the costs of cash transfers in West and Cnetral Africa 240
9.3 Budgetary and implict costs of fuel and food subsidies in selected countries 242
Figures
1.The components of social cohesion 17
2. Fast growth in the developing world in the 2000s 18
3. Changes in life satisfaction. education and growth performance in the 2000s 19
4. Gini coefficients before and after taxes and transfers in developing countries 20
5. Fiscal revenues as percentage of GDP, 2008-08 21
1.1 Export flows by region 33
1.2 Foreign direct investment inflows to bdeveloped and developing econoimics 33
1.3 Income convergence in the 2000s 34
1.4 The four-speed world classification in the 2000s 35
1.5 Current account balance, advanced vis-a-vis emerging 37
1.6 Trade balances in Eastern Asia, sub-Saharan Africa and South America, 1990-2009 37 1.7 Trade balance by primary commodity in sub-Saharan Africa and South America, 1995 -2009 38
1.8 Share of exports to developingcountries, by region 39
1.9 Net foreign direct investment and net workers' remittances in converging countries in the 1990s and 2000s40
1.10 Change in foreign exchange reserves (absolute value)by region 41
1.11 Reserves beyond short-term precautionary conditions 41
1.12 Value of SWF investments by target region. 20069-09 42
1.13 Savings as ratio of GDP 42
1.14 Fiscal revenues as percentage of GDP. 2000-08 43
1.15 Tax tarios of African oil producers versus non oil producers by tax sources 44
1.16 Fiscal revenues from natural resources in Latin America and the Caribvean 45
1.17 Debt-to-GDP ratio in the four-speed world 45
1.18. Avverage fiscal balance and debt ratios in converging countries in the 1990s and 2000s 46
2.1. The components of social cohesion 54
2.2. Absoilte versus relative economic gradient of life satisfaction across countries, 2008 56
2.3. Shifting wealth, social cohesion and development: A simple framework 60
3.1. The oace of structural change ny sector in developing economies, 1990-2009 67
3.2. Labour income as a share of value added by region, 1990-2008 71
3.3. Labour income as a share of value added in selected countries, 1990-2007 71
3.4. Increasing informality in growth periods 73
3.5. The top ten urbanising countries in 1990-2010 76
3.6. Global stock of international migrants, 2005 78
3.7. Civil unrest caused by rising food prices?, 1996-2010 80
3.8. Structural break in food prices in the 2000s 81
3.9. A wide range of national food production outcomes over the last decade 82
3.10. Officially recorded land transfers, 2004-09 85
4.1. Composition of gloval inequality 96
4.2. Changes in the Gini index in the BRICS, 1990-2007 97
4.3. Growth incidence curve showing reduction in Brazilian inquality due to pro-poor growth, 2001-06 100
4.4. Absolute versus relative poverty in China and Brazil, 1981-2007 101
4.5. The economic gradient of national and relative poverty lines, for 73 countries 102
4.6. Global middle class consumption, 2000-50 103
4.7. Rising incomes at the top in both rich and emerging countries 105
4.8. Distribution of equivalised incomes is polarised by race in South Africa, 2008
4.9. Distribution of wages is polarised by employment status in Mexico, 2007Q2 108
4.10. Returns to education in Brazil, 2001-06 113
4.11. Changes in returns to education disproportionately affected growth in wages of the upper deciles in Brazil, 2001-06 114
4.12. Preferences for redistrilbution, early 1990s to mid-2000s 116