In this 2007 Wertheim Lecture, the speaker examines the role inequality plays in development and human welfare. In his speech he pressed on the significance of the definition of inequality and poverty. He noted that there is no straightforward way of talking about economic and social inequality. It is quite possible, with the many different definitions available, for inequality to be reduced by one measure, but not another – e.g. by using inter-country in contrast to inter-household comparisons.

He also spoke about the growth and the subsequent poverty reduction in the developing countries during last five years. According to the speaker during the last five years, there has been increase in growth, including in many developing countries. Much of it is due to two factors: 1) increased prices of primary commodities, and 2) the lower cost of finance because of the US Federal Reserve’s efforts to reduce interest rates in the US since 2001.

As a consequence, there has been higher growth in many developing countries, but inequalities have increased and poverty persists. There has been little significant reduction in overall rates of poverty. Along with it there has been relatively little employment growth despite overall economic growth without which it is very difficult to conceive of poverty being reduced on a sustained basis. At the end the speaker calls for the need of national ownership and policy space to counter poverty and inequality. He concluded that growth is necessary, but certainly not sufficient, and the questions of distribution and accountability are as important.