Equity and Inequality in the Arab Region

This report provides a review of empirical knowledge about income inequality in the Arab region, focusing primarily on the issues of data and measurement, and the characterization of its patterns and trends. It does not go much into policy analysis and the understanding of the causes and determinants of inequality. The review shows good progress over the last two decades in the availability of data and quality of measurement. However, the region remains far behind progress being achieved worldwide in terms of coverage and comparability across countries, improvements in quality and content of data, and, more importantly, accessibility to available micro-data which allow careful and state-of-the art analysis of inequality. The lack and unavailability of data are most serious for the rich Gulf countries and the poorest ACs. Within the constraints and limitations of the data, the available evidence shows a complex picture about inequality in the Arab region. As a whole the region shows moderately high levels of inequality in terms of household expenditures compared to other regions of the world. At the same time overall regional inequality appears to be relatively stable, or changes are not statistically significant over the last 20-30 years for which comparable data are available. The patterns of inequality show quite significant variation across countries, with countries such as Morocco and Tunisia showing relatively high inequality while others such as Yemen, Egypt or Syria showing low inequality. Trends in inequality at the country level since the 1970s are also mixed, with the extent of disparities more likely to exhibit an upward trend when inequality is low and vice versa. One striking result is the weak time variability of the inequality indexes in most of the countries of the region. Alternative measures of welfare distribution such as of horizontal inequality, polarization or inequality of opportunity have been widely used worldwide to supplement the Lorentz-based inequality criteria, but such measures are scarce in ACs, illustrating again the knowledge gap about inequality in the Arab region. We finally offer suggestions for a research agenda to better our understanding about the nature and determinants of inequality in the region.