Civil and political freedoms (e.g., democratic institutions) theoretically possess the potential to reduce inequality by empowering marginalized groups and fostering inclusive policies.

That said, the relationship is complex, and factors such as race, gender, and socioeconomic status can hinder access to civil and political participation.

Furthermore, political processes, even within countries with free and fair elections, can be susceptible to manipulation or fragmentation, leading to outcomes that perpetuate inequality.

Despite these challenges, the relationship between civil and political freedoms and equality remains compelling, as genuine and robust free institutions have the potential to serve as catalysts for addressing systemic disparities, promoting social justice, and empowering marginalized communities. In theory, civil and political freedoms can ensure equal representation, prioritize equitable distribution of resources, and build a fairer society.

Against this backdrop, we explored the relationship between freedom and inequality, hypothesizing that the more civil and political freedoms found within a country, the lower the country’s income inequality. 

Is there consensus among experts?

Academic literature on the relationship between inequality and civil and political freedoms is disparate and illustrates a lack of consensus among researchers.

One older but relevant study (Muller 1988) argues that the time existing as a democracy (i.e., maturity) is the key element to decreasing inequality (i.e., a positive correlation between equality and longevity of political freedoms)[1]. The analysis posits that the causal link of democracy on income equality operates through intervening mechanisms such as interest groups and political parties, and thus the impact of democracy on income equality happens gradually. The author further posits that only as poorer members of society organize unions and interest groups to develop an electoral base, political freedoms become associated with a reduction in inequality.

Other relevant research (e.g., Knutsen 2015) explores the two-way causal relationship between these variables, including the reversal causal mechanism of how elevated levels of inequality may work to destabilize democracies[2]. This study concludes that there is no robust effect of income inequality on the existence of democracy, nor on the level of democracy present, nor on the rate of democratization probability or democratic stability. The study does however conclude that democracy seems to reduce income inequality when the latter is proxied by the share of income going to wages as opposed to passive income.

A World Bank study (Gradstein & Milanovic 2000)[3] contradicts these analyses and more broadly argues against the common assertion that greater political freedoms tend to result in more equal societies. The paper argues that the relationship is complex, highlighting Eastern Europe as an illustration of the opposite trend, whereby income inequality seemed to increase post democratization of this bloc of countries.

Freedom Score

The Freedom House Freedom Score Index[4] uses a two-tiered system consisting of freedom scores (0-100) and freedom status (Not Free, Partly Free, Free). The Freedom Score [5] is calculated through a weighted combination of 10 political rights and 15 civil liberties indicators and grouped into subcategories (e.g., Electoral Process, Political Pluralism and Participation, and Functioning of Government; Freedom of Expression and Belief, Associational and Organizational Rights, Rule of Law, and Personal Autonomy and Individual Rights). Based on the scoring of these indicators, a weighted calculation is employed to determine the Freedom Status of a given country.

Figure 1: Freedom House, Freedom status calculation

GINI Index

The GINI Index, based on primary household survey data obtained from government statistical agencies and World Bank country departments, is a measure of income inequality that summarizes the dispersion of income across the entire income distribution[6]. The closer the index is to zero the more equal the distribution of income, while the closer the index is to one the more unequal the distribution of income.

Analysis: The relationship is tenuous, but strong among “free” countries

Overall, we found a weak correlation between the Freedom Score and the GINI Index across the globe (Figure 3; – the number .01 refers to the correlation coefficient for that specific analysis). However, as depicted in Figure 4, the Freedom Score and GINI Index were much more strongly correlated when limiting this analysis to countries designated as “Free” by Freedom House (R= – 0.55). Figure 5 illustrates this trend using the list of countries with the top ten freedom scores, and their (low and decreasing) levels of income inequality.

As the countries with the highest freedom scores tended to be European countries, we also ran the analysis separately for European and Non-European countries, finding that freedom and income inequality remained correlated when segmenting by these two geographies. This suggests that this relationship, among free countries, persists across geographic regions.

Discussion: What might be driving this dynamic?

While additional analysis is needed to identify the underlying components of the link between civil and political freedoms and equality, the strong correlation within ‘free’ countries may suggest that a certain threshold of civil and political freedoms (high freedom score; e.g., strong democratic institutions) is required to create top-level income equality.

For countries within ‘partly free’ and ‘not free’ categories, varying political systems and civil and political structures show varying levels of success in developing income equality. In some countries, the lack of civil and political freedoms (i.e. more government control) might actually lead to more equitable societies in the short- and medium term, particularly in countries seeing rapid economic development (e.g.: China).

That said, at some point the advantages of tighter government control and lower civil and political freedoms on combatting inequality and producing a more equitable society may crest, and more civil and political freedoms are needed. Systems which curtail civil and political freedoms may limit their ability to create top-level income equality.

A final reflection on addressing rising global inequality

Our analysis focused on examining the relationship between civil and political freedoms and inequality at a high level. Further research on the intervening mechanisms between freedom and inequality is needed to explore which specific political and civil liberties are most linked to reduced income inequality. Specifically, further analysis should be conducted to identify the underlying social and political elements (e.g., freedom of press, voting rights, social expenditures, space for civil society, timing) that likely lead to decreased inequality.  

The link between these two topics addresses pressing issues related to democracy, human rights, and a better and more equitable future. Exploring this relationship is timely and critical, as inequality is a key global concern and continues to rise among 70 percent of the world’s population [6]. (United Nations 2020). Furthermore, the growth in inequality comes at a time when the globe is seeing a backsliding in social and political freedoms. Done effectively, building the case for civil and political freedoms as a catalyst for economic equality may be a powerful tool to combat these current global challenges.   

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Appendix

Figure 3: Freedom score versus GINI index globally

Figure 4: Freedom score versus GINI index across free countries

Figure 5: Countries with top 10 freedom scores and GINI index

Figure 6: GINI index versus social expenditure for OECD Countries

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Citations

[1] Edward N. Muller, Democracy, Economic Development, and Income Inequality on JSTOR

[2] Reinvestigating the Reciprocal Relationship between Democracy and Income Inequality, by Carl Henrik Knutsen

[3] Source: Does Liberte =Egalite? A Survey of the Empirical Links between Democracy and Inequality with Some Evidence on the Transition Economics

[4] https://freedomhouse.org/reports/freedom-world/freedom-world-research-methodology

[5] https://data.worldbank.org/indicator/SI.POV.GINI?most_recent_value_desc=true

[6] Rising inequality affecting more than two-thirds of the globe, but it’s not inevitable: new UN report | UN News

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Brent McCann brings international humanitarian, research, and investment experience to help clients navigate strategic decisions and maximize their impact through evidenced-based quantitative and qualitative analyses. Prior to Camber, he worked for the Arab Reform Initiative researching anti-corruption and migration-related topics in the Middle East and North Africa, as well as designing institutional and project-specific monitoring and evaluation tools. Brent began his career in the nonprofit sector. He cofounded the Liliir Education Project and has 8+ years working on education, public policy, economic empowerment, refugee rights, and conflict resolution projects in South Sudan and greater East Africa. Brent holds an MA in Human Rights and Humanitarian Action from the Paris School of International Affairs (PSIA) at Sciences Po, and obtained his B.B.A. with honors in International Business and Entrepreneurial Leadership from Gonzaga University. A Seattle native, Brent enjoys scuba diving, playing basketball, backpacking, skiing, and spending time with friends and family.

Melissa Flores leverages her background in quantitative analysis and research to support clients’ strategic decision-making centered around social impact. Prior to Camber, Melissa worked as consultant at the UN World Food Programme, providing operational and programmatic support to the organization’s global food security monitoring initiative. Melissa began her career as a financial consultant, working on risk mitigation strategies for Consumer and Healthcare clients in the United States. She holds an M.A. in International Development from Sciences Po’s Paris School of International Affairs and a B.A. in Applied Mathematics from Harvard University.

As we reduce emissions, let’s not forget about the impact of climate change on health

Climate change is affecting the air we breathe, the water we drink, and the quality of food we eat. Over the past decades, it contributed to a rapid increase in asthma cases and allergies and the spread of mosquitoes to higher hemisphere regions, with the US seeing the first cases of local malaria transmission in two decades [1]. The WHO (World Health Organization) projects that, all else equal, between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year from heat stress, malnutrition, malaria, diarrhea, and heat stress [2].

Extreme climate events have significantly increased over the past 50 years

Over the recent decades, extreme climate events have significantly increased, primarily floods, storms, and wildfires. This affects millions through population displacement, socioeconomic shocks, direct mortality, and health impact (Figure 1).

Figure 1. Number of extreme weather events and people affected [4].

Note: Each dot represents an event; the circle size represents the number of affected persons.  

According to IPCC (Intergovernmental Panel on Climate Change) scenarios, global temperatures will continue to rise, causing more adverse effects on human health. The burden of many climate-sensitive health risks is projected to be greater at an increase of 2 ◦C above pre-industrial temperatures than at 1.5 ◦C., highlighting the sensitivity of health conditions to minor changes in global temperatures [3]. We outline examples of crucial health conditions expected to exacerbate if we continue our current trajectory in Figure 2.

Figure 2. Illustrative health effects of climate change [5]

Global warming with unequal local impacts

While global warming is measured against the global average target of 1.5◦C, the local impact varies significantly, with some regions bearing a significant burden. More countries are undertaking better vulnerability and adaptation assessments to understand the health risks they will face as temperatures rise. These analyses have highlighted the most vulnerable populations, often the elders, children, and people living in remote areas [7].  

We have highlighted below in Figure 3 the projected temperature increase in select countries, highlighting the global disparities. Even the national average hides vast differences in the sub-national regions, with some areas extremely vulnerable to changing conditions. Rapid projected population growth in most countries will also contribute substantially to the number of people affected by temperature rises and extreme weather events.

Figure 3. Projected temperature changes under different climate-change scenarios and population growth between current and 2050. [8] [9]

What are we doing about it: Current funding trails projected need

While the scientific community and country priorities emphasize the growing challenge that the globe faces related to climate and health, funding commitments at the intersection of these sectors have continued to trail behind the projected need.

Development finance institutions (DFIs) have increased their commitments to climate in recent years and, on average, committed to nearly doubling their spending on climate from 2020 to 2025 [11]. Certain DFIs have even made ambitious commitments until 2030, including the Asian Development Bank (ADB) and the World Bank (WBG), which have committed to dedicating 75 percent of commitments to climate finance by then. While spending on climate has been increasing, the share of spending to mitigate health impact remains very low at under 6% of climate adaptation funding [10].

Figure 4. Breakdown of Adaptation spending by major MDBs in 2020/2021 [10][11].

Despite the recent push by some major development finance institutions to increase overall climate spending and adaptation spending as a percentage of this amount, total mitigation spending by multilateral development banks (MDBs) was still over three times that of adaptation spending in 2021[11].

The focus of development finance institutions on mitigation activity (vis-a-vis adaptation) or the importance of CO2 reduction as the defining metric to measure the impact of climate projects may explain their hesitation to shift funding into the climate-health nexus.

On the health side, DFIs bolstered their spending during the COVID-19 pandemic. Across four major MDB (WB, IDB, AfDB, ADB), health funding rose 3-fold from $3.8 billion in 2018 to $12.1B in 2021 [12]. Despite this pandemic-driven increase, the overall health sector constitutes a small portion of total funding and trends between 5% and 15% for most bilateral and multilateral institutions [13].

Despite the recent momentum in the climate and health sectors individually, funding at the intersection of climate and health has remained stagnant. It is not yet a stated focus of most funders. 

The philanthropic sector has followed a similar trend as development finance institutions. While many philanthropies dedicate energy and funds to the climate and health sectors individually, few of these institutions have declared a focus at the nexus of the two. Wellcome Trust is one of few large foundations with an expressed focus on funding climate-health interventions, communicating the intersection as one of their three focus areas related to health [13]. This presents an opportunity for other foundations to direct capital to an underfunded sector to catalyze additional investments.

What’s holding us back: Key challenges to increase capital commitments

Funders face several challenges when deciding to invest in projects at the intersection of climate and health; if addressed, there is potential to vitalize commitments in the space [13]. These challenges range from a need for a shared definition and impact metrics for climate-health investments to a lack of robust evidence across these interventions.

Thoughts on a way forward

Considering the challenges depicted above, a range of actions can be undertaken to address the key issues hindering further commitments to climate-health initiatives.

Here are three recommendations to address the challenges outlined [13]:

The upcoming COP28 is a promising opportunity to delve deeper into this topic as it is the first COP conference that includes an entire day dedicated to the health sector. This global convening presents a unique occasion to gather key stakeholders to identify solutions to these challenges, garner momentum, and solidify commitments at the climate-health nexus.

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Citations

[1] https://www.nytimes.com/2023/06/27/health/us-malaria-mosquitoes.html

[2] Climate change and health (who.int)

[3] Health risks of warming of 1.5″00B0`0C, 2″00B0`0C, and higher, above pre-industrial temperatures (iop.org)

[4]  Data from EM-DAT. The International Disaster Database; Graphic produced with RAW Graphics.

[6] Data from https://www.ipcc.ch/report/ar6/wg2/chapter/chapter-7/; graphic produced in Microsoft PowerPoint.

[7] Climate change and health: vulnerability and adaptation assessment (who.int)

[8] Climate Risk Country Profiles | Climate Change Knowledge Portal (worldbank.org)

[9] World Population Dashboard (unfpa.org)

[10] How much bilateral and multilateral climate adaptation finance is targeting the health sector? A scoping review of official development assistance data between 2009–2019 – PMC (nih.gov) citing Lancet Countdown data.

[11] 2021 Joint report on multilateral development banks’ Climate finance (eib.org)

[12] Microsoft Word – 2023-04 Making it work – role of MDBs – final.docx (actionsantemondiale.fr)

Melissa Flores leverages her background in quantitative analysis and research to support clients’ strategic decision-making centered around social impact. Prior to Camber, Melissa worked as consultant at the UN World Food Programme, providing operational and programmatic support to the organization’s global food security monitoring initiative. Melissa began her career as a financial consultant, working on risk mitigation strategies for Consumer and Healthcare clients in the United States. She holds an M.A. in International Development from Sciences Po’s Paris School of International Affairs and a B.A. in Applied Mathematics from Harvard University.

Abdel Agadazi is a Camber Collective alum. While with the firm, he worked with clients on their strategy and investment planning via data-driven decision-making and market analysis. Prior to Camber, Abdel led consulting engagements at Accenture, supporting global clients on their digital transformation journey. He began his career building technology systems for optometrists and healthcare clients in the United States. Abdel is also involved in supporting entrepreneurs in Europe and Africa through growth and operational advice. He holds an MBA from INSEAD and a Master’s in advanced analytics from IMT Atlantique, a top-tier French engineering school. Abdel grew up in Lomé, and he enjoys cooking and playing basketball. Our Paris office mates look forward to seeing him strolling the streets as an amateur photographer.