On Inequality

Does Europe have an inequality problem? Amid the COVID-19 pandemic, many Europeans are certainly struggling. The rise of populist movements is another signal that something is awry. Many Europeans no longer see their economy as fair. But is this a problem of too much inequality, or just a problem of ideology? Is inequality even a bad thing? We need to consider the statistics on economic inequality, but also look beyond towards the lived experience of trying to make ends meet. We need to consider different ideas on the impact and significance of the inequality we see. Does inequality drive entrepreneurship, and thus innovation, through the struggle for upward social mobility? Or does inequality affect life chances, becoming entrenched, blocking social mobility and innovation? And does anyone really need a billion euros? If we have a euro to spare, do we create more happiness by giving it to the rich or to the poor? An old, once infamous, now oft-forgotten question in economics. Tessa Bending conducts research on social inclusion, social development and impact measurement at the Economics Department of the European Investment Bank (EIB). The department provides indepth analysis on critical investment issues to support international policy debates. This is the sixteenth essay in the Big Ideas series created by the European Investment Bank. The EIB has invited international thought leaders and experts to write about the most important issues of the day. These essays are a reminder that we need new thinking to protect the environment, promote equality and improve people's lives around the globe.

Tessa Bending is an economist and anthropologist at the Economics Department of the European Investment Bank. She joined the EIB in 2014, with a focus on the impact of the Bank's development activities and a broad remit to help its Economics Department better convey its research and policy messages. Her current work also looks at social inclusion in the European Union and the social impacts of the climate transition. Born and educated in the United Kingdom, Tessa began her career studying land rights conflict in Malaysia. Her work Penan Histories (KITLV Press, 2006) recounts how members of an indigenous community in Sarawak, Malaysian Borneo, sought to manage relations with the state, logging companies and Western environmentalists. Amid rival stories told from different sides, it is also about the traps we fall into when we tell other people's histories, and the hard task of trying to do justice to what might have happened. Tessa received her doctorate from the School of Development Studies, University of East Anglia, UK. After moving to Rome in 2007, she worked as a consultant with the United Nations and civil society organisations on land rights issues. Tessa lives with her three children in Luxembourg.