Economists have long been interested in measuring the effects of economic policies on poverty and on the distribution of welfare among individuals and households.

Devising satisfactory methods for accurate evaluations has proven to be a difficult task.

Progress in economic analysis and the growing availability of microeconomic household data have improved the situation. At the same time, however, calls for rigorous assessment have intensified. Partly because of the fierce debate on the social effects of globalization, economic policy objectives and social demands have increasingly focused on poverty reduction and distribution outcomes.

Policy makers have become aware that the selection and implementation of economic policies require a careful assessment of their effects both on aggregate economy wide variables—such as employment, inflation, or real GDP growth— and on income distribution and poverty. Modern macro-micro simulation techniques, which, with different degrees of integration, combine macro and micro modeling frameworks, are the most promising tool for providing that careful assessment.

In this context, the World Bank Development Economics Department (DEC) has developed the Global Income Distribution Dynamics (GIDD), the first global CGE-microsimulation model. The GIDD takes into account the macro nature of growth and of economic policies and adds a microeconomic—that is, household and individual—dimension to it.

The GIDD includes distributional data for 121 countries and covers 90 percent of the world population. Academics and development practitioners can use the GIDD to assess growth and distribution effects of global policies such as multilateral trade liberalization, policies dealing with international migration and climate change, among others (see the applications section of this webpage). The GIDD also allows analyzing the impacts on global income distribution from different global growth scenarios and to distinguish changes due to shifts in average income between countries from changes attributable to widening disparities within countries.

We strongly recommend visitors to take a look into the Applications section to see our current research agenda. Feel free to contact us for questions and suggestions about the GIDD at globaltrends@worldbank.org.