Stuck in the Middle

Antonio Estache hold the Bernard Van Ommeslaghe chair at the Université Libre de Bruxelles. He previously worked for twenty-five years at the World Bank.Danny Leipziger is a vice president at the World Bank and a prolific author and frequent commentator on development issues.

"Sustaining the commitment to globalization and the growth and development it enables is crucial. Ensuring that the benefits are spread widely and inclusively are the two critical underpinnings. Estache and Leipziger take a bold and important step in identifying the rising middle class and its voice in domestic and international policy as central to the solution." —Michael Spence, Nobel laureate in economics and chairman ofthe Commission on Growth and Development|"Whether what Adam Smith called 'the great body of the people' are getting ahead economically is a vital determinant of whether a society progresses in its social, political, and ultimately its moral condition. In recent years, policy in many countries has foundered on the failure of those not at the top to reap benefits from the economy's advance. Stuck in the Middle tackles the hard questions of what fiscal policy can do to address these problems and how to build a consensus in support of policies that can work. Economists as well as political scientists —and policymakers too —should pay close attention." —Benjamin M. Friedman, Harvard University, author of The Moral Consequences of Economic Growth|"At every stage of development, sustaining effective public policies for poor people requires engaging middle-class voters. There is no shortage of talk about the middle class, say the middle 60 percent of income recipients. But here is a book that actually studies them from a global perspective: their interests, their attitudes, their prospects, their power. It is now all the more important to go back to the study of the redistributive effects, deliberate and accidental, of the fiscal system as a whole. With Stuck in the Middle, Musgrave and Pechman ride again." —Robert Solow, Nobel laureate in economics and professor emeritus, Massachusetts Institute of Technology

• Foreword 1. Overview: Fiscal Policy, Distribution, and the Middle Class 2. Stylized Facts on the Middle Class and the Development Process 3. The Future of Global Income Inequality 4. The Scope and Limits of Subsidies 5. Policies for Lower Global Wealth Inequality 6. Can Happiness Research Help Fiscal Policy? 7. The Politics of Effective and Sustainable Redistribution