The World Bank has said that inequality can hurt development. The bank said it came to this conclusion recently when it discussed the connection between inequality and economic development with some experts, including its Chief Economist, Indermit Gill.

The bank’s position is contained in a report authored by Luis Felipe López-Calva, Deon Filmer, and Haishan Fu published on August 20, 2025. The report is entitled Why Economic Inequality Matters for Development.

Gill said: “If you look at the aspects of inequality – you can talk about the inequality of opportunity, of income, of wealth, and of power – it matters a lot. It can really hurt development, if it’s too high or unmanageable”.

He added that high economic inequality in a country can limit people’s ability to move up the socioeconomic ladder, and thereby slow progress toward broad-based growth and poverty eradication, while decreasing high levels of inequality, on the other hand, can spur economic development, strengthen human capital, and speed up poverty reduction.

“We know that tackling economic inequality is essential for boosting shared prosperity and achieving key development goals”, Gill said.

He stated that: “The World Bank’s mission to end poverty and boost shared prosperity on a livable planet envisions a world where growth is not only robust but also broad-based. That means systematically including people across all income levels, especially those at the bottom of the distribution”.