Eradicating poverty is one of the global challenges defined in the 2030 Agenda for Sustainable Development. However, this goal cannot be achieved without reducing the gap between the rich and the poor. Development Finance International and Oxfam have developed an international monitoring framework — the Commitment to Reducing Inequality (CRI) index — that measures the commitment of 157 countries to reducing inequality through the fiscal policies (public spending and taxes) and labour market policies implemented by their governments. The CRI index builds on three pillars: progressivity of spending, progressivity of tax, and progressivity of labour policy. These pillars are used to organise and aggregate nine indicators into a single summary measure. This framework involves both conceptual and practical challenges. The statistical audit presented here was performed by the European Commission’s Joint Research Centre, and it aims to contribute to ensuring the transparency and reliability of the CRI index 2018. It should enable policymakers to derive more accurate and meaningful conclusions, and to potentially guide choices on priority setting and policy formulation.
Overall, the main conclusions of the present audit can be summarised as follows: the CRI index 2018 is representative of a plurality of scenarios, is reliable and has a statistically coherent framework. The uncertainty analysis shows that country ranks are robust for most countries. For a number of countries, in particular countries that are not members of the Organisation for Economic Cooperation and Development (OECD), ranks should be analysed within their expected confidence intervals instead of being taken at face value. The statistical assessment also shows that the CRI index has a good statistical reliability and measures one single latent phenomenon capturing the main components of the index: the ‘progressivity of labour policies’, and the interaction between the ‘progressivity of tax’ and the ‘progressivity of spending’. Notwithstanding the good statistical properties of the CRI index, some suggestions are made for possible refinements of the CRI index in future editions.JRC.I.1-Modelling, Indicators and Impact Evaluatio
