Within-country income inequality has risen since the early 1980s in most of the OECD, all transitional and many developing countries. More recently, inequality has risen also in India and nations affected by the Asian crisis. Altogether, over the last twenty years, inequality worsened in 70 percent of the 73 countries analyzed in this volume, with the Gini index rising by over five points in half of them. Mainstream theory focusing on rises in wage differentials by skill caused by either North-South trade, migration or technological change poorly explains the recent rise in income inequality. Likewise, while the traditional causes of income polarization — high land concentration, unequal access to education, the urban bias, the ‘curse of natural resources’ — still account for much of cross-country variation in income inequality, they cannot explain its recent rise. This volume suggests that the recent rise in income inequality was caused to a considerable extent by a policy-driven worsening in factorial income distribution, wage spread and spatial inequality. In this regard, the volume discusses the distributive impact of reforms in trade and financial liberalization, taxation, public expenditure, safety nets, and labour markets. The volume thus represents one the first attempts to analyze systematically the relation between policy changes inspired by liberalization and globalization and income inequality. It suggests that capital account liberalization appears to have had — on average — the strongest disequalizing effect, followed by domestic financial liberalization, labour market deregulation and tax reform. Trade liberalization had unclear effects, while public expenditure reform often had positive effects. Published by Oxford University Press in the UNU-WIDER Studies in Development Economics series, this book is edited by Giovanni Andrea Cornia.