Monday, August 10, 2020

Botswana gets 1/20 in Inequality Transparency Index

To be clear, no country gets a perfect score (20) in the Inequality Transparency Index (ITI) but Botswana gets a disappointingly low fail-and-discontinue score.

Developed by the World Inequality Lab at the Paris School of Economics in France, the ITI is an evolutive and collaborative tool describing the availability and quality of information on income and wealth inequality in a given country. The Lab publishes inequality series for some countries on the basis of household surveys, tax data, national accounts and when available, information from financial leaks such as the “Panama Papers.” The Lab views access to quality data on the distribution of income and wealth as “a condition for peaceful democratic debates on economic matters.”

The Index, which put equal emphasis on wealth and income, ranges from 0 to 20 for each country. It is constructed as follows: wealth tax or estate tax microdata is awarded 4 points; income survey microdata and wealth survey microdata are awarded 3 points each; income tax microdata covering labour income, income tax microdata covering capital income as well as wealth tax or estate tax tabulations are each awarded 2 points each; and income survey tabulations (or consumption surveys) available to researchers, wealth survey tabulations, income tax tabulations covering labour income and income tax tabulations covering capital income are awarded 1 point each. From this matrix, a tabulation of Botswana’s score yielded only 1 point.

Data on the availability of these different types of data sources are collected internally by the Lab’s research fellows and its international network researchers. The information is then thoroughly checked and completed by the coordinators of the different world regions.

“If the last available data is older than 10 years old, then it is considered to be unavailable. Datasets which have only been used once for specific studies and are inaccessible to academic researchers upon request to statistical authorities or government agencies are also considered to be unavailable. In some countries, datasets are available but of very low quality. In these cases the World Inequality Lab does not give the full marks,” says the Lab, whose study covers the Bechuanaland Protectorate years when present-day Botswana was a colonial territory ruled by the British.

The researchers, who include Dr. Thomas Piketty, a famed economist and author of a New York Times bestseller on capital, have constructed top income share time series which they keep extending forwards and backwards for selected countries. In making a case for transparency, the Lab says that in the current digital age, “access to basic information on the distribution of income and wealth growth should be considered as a public good.” Its historic study that estimates the evolution of income inequality in Africa from 1990 to 2017 shows that the share of national income earned by Botswana’s top 10 percent was 67 percent in 2009 while the bottom 40 percent earned only 4 percent.

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