This Briefing Paper argues for a stronger focus on the measurement of polarisation, rather than inequality, to get a more nuanced picture of poverty, and generate effective policies for poverty reduction. It suggests that polarisation may explain why economic growth does not always translate into lasting human development. Inequality is often blamed for the poor links between economic growth and human development, but data show that links between economic growth, inequality and human development are less robust than often assumed.
Unlike the measurement of inequality, polarisation measures focus on the clustering of members of a society at more than one income level – referred to as poles – capturing convergence around these income levels.
The measurement of polarisation provides a distinct and complementary insight into the link between growth and human development, capturing the distributional aspects missed by traditional inequality measures. It leads, therefore, to different policy recommendations.