Percentage of National Income Spent on Foreign Aid

Rich and Poor Countries

More equal societies spend a higher proportion their income on overseas aid and perform better on the Global Peace Index.

Percentage of National Income Spent on Foreign Aid

Given the enormous human suffering caused by the differences in living standards between rich and poor countries, it may seem beside the point to focus attention – as the Equality Trust does – on the inequalities within the rich countries.

But rather than seeing these as two quite separate problems, greater equality within the rich countries seems to lead them to adopt policies which are more helpful to poorer countries. Two pieces of evidence suggest that this is true. First, as the graph shows, the rich countries with the smallest income differences within them tend to spend a higher proportion of their Gross National Income on aid to developing countries. Second, more equal countries also perform better on the Global Peace Index which reflects militarism and violence.

When looking at the role of different countries in international trade agreements it looks as if the proposals supported by more equal countries are less dominated by attempts to serve their own economic interests at the expense of other countries. Sweden, Norway and the Netherlands have also contributed many times more in total (not just per head) than has the USA to the World Trade Organisation’s Global Trust Fund set up to finance technical assistance to developing countries.

On environmental issues such as recycling and reducing carbon emissions it is difficult to get figures, but the impression is that on environmental issues too, more equal countries are more willing to shoulder their international responsibilities.

How can this link between the amount of inequality within societies and their policies towards other countries and the international community be explained? The answer is simple. What people learn about human relations and motivation in their own society establishes their basic assumptions about human nature which they then apply not only within their society but to the world at large.

Remember that the quality of social relations is better in more equal societies – they have lower levels of violence, higher levels of trust, and community life is stronger (see pages on Trust and Community Life). These are reflections of the divisive effects of inequality. Because it is a powerful marker of status differentiation, inequality tells people that they are in a society with divergent interests where people compete with each other and have to fend for themselves. In contrast, greater equality suggests a degree of common interests and mutual interdependence. The stresses of relative poverty and low social status also affect the nature of family life. This in turn affects children’s emotional and cognitive development, preparing them either for lives involving more conflict and self-reliance, or, at the other end of the scale, making them more empathetic and better at cooperation, sharing and reciprocity.