Policy highlights:

• Rising within-country inequality accounts for a rapidly increasing share of global inequality. To identify the most important drivers of inequality per country, policymakers are advised to start with ‘inequality diagnostics’.
• Depending on the identified drivers of inequality, policymakers should implement several measures, such as pro-poor education policies, rural infrastructure construction projects, and programmes promoting smallholder farmer productivity.
• There is much to be gained from redistribution by the state via a higher tax take and increased pro-poor social transfers. Such measures must be accompanied by the build-up of administrative capacity.
• On the international level, there should be greater emphasis on assisting developing countries to fight tax evasion, as well as on technical assistance for states in implementing an inequality-reducing agenda.