Inequality Transparency Index
The Inequality Transparency Index is a collaborative tool, updated annually, that aims to:
- Provide an assessment of the state of inequality data availability and quality around the world.
- Create an incentive for countries to take steps to publish transparent data (currently, there are many situations where the data exists but is so difficult to access that it is almost unavailable).
Why is access to quality data critical?
Recent decades have witnessed important developments in the measurement of income and wealth inequality. However, available information on the distribution of income and wealth remains particularly scarce around the world. This situation is largely due to the opacity of the financial system, the nature of the tools used by statistical agencies to track inequality, and sometimes the reluctance of governments to publish the data they do have.
Public access to quality data on income and wealth distribution is a prerequisite for peaceful and informed debate on economic issues and public policies. In the current digital age, access to basic information on income distribution and wealth growth should be considered a public good. That’s why, on the occasion of the 2019 Human Development Report, the World Inequality Lab has partnered with the United Nations Development Program to develop the Inequality Transparency Index. The World Inequality Lab updates the index annually in parralel with the World Inequality Database.
What are the highlights of the Inequality Transparency Index?
(as of November 2023)
- Norway has the highest score of 17.5/20. Compared to other countries (with scores in the mid 10s), Norway produces very detailed and high quality income survey microdata, income tax microdata and, in particular, better wealth tax microdata.
- Many countries still produce very little data (detailed tax data in particular are extremely rare). Even in countries with higher scores, there is an urgent need for improvement if we are to obtain accurate distributional national accounts. This is particularly true for the measurement of wealth and capital income inequality, for which only no country in the world is fully transparent.
- 18 countries have a score of “0”, meaning that neither survey nor fiscal data are available. They appear as stripes on the map. For these countries, the best we can do is to estimate their level of inequality using regional imputation, i.e. assuming that they have a similar level of inequality as countries in the same region and/or with a similar average income or political system. It’s an improvement from 2020, when 28 countries were in this category.
How is the Inequality Transparency Index constructed?
The index inequality transparency index ranges from 0 to 20 for each country. The maximum score of 20/20 corresponds to an ideal situation where countries publish annual distributional accounts of wealth and income using household surveys that are consistent with administrative tax records. This makes it possible to have accurate income and wealth statistics for all income and wealth groups, including those at the top, as well as accurate social and demographic characteristics of the population.
The index is constructed around two dimensions:
- We distinguish between four different data sources: income surveys, income tax data, wealth surveys and wealth tax data.
- We assess different components for each of these sources: Quality, Frequency of Publication and Access to Data.
>> Download the technical note 2020/12 for a detailed insight on the construction of the index
>> Download our transparency data table 2023 to understand how the index is calculated
Improving the transparency and availability of inequality data requires a concerted effort by global statistical agencies and governments. The research community and civil society actors are committed to supporting the authorities in this direction.
Do you have access to information that is not yet included in our database? Would you like to contribute to the Index? Contact us at firstname.lastname@example.org.
- Burq, F., Chancel, L. (2020). Inequality Transparency Index. World Inequality Lab Technical Note 2020/12.
- Burq, F., Chancel, L. (2020). Transparency data table 2020, World Inequality Lab Data File to Technical Note 2020/12.
- Alvaredo, F. et al. (December 2019). Escaping the Inequality-Data Dark Ages. Project Syndicate.
- Alvaredo, F. et al. (September 7, 2020). Distributional National Accounts Guidelines. Methods and Concepts Used in WID.world.
- United Nations Development Program (2019). Human Development Report.