Former World Bank chief economist says AI concentrates wealth, urges global policy coordination

Speaking at the 2026 Bund Summit on October 19, Kaushik Basu, professor at Cornell University and former Senior Vice President and Chief Economist of the World Bank, said that while AI contributes to economic growth, it also reduces demand for some labor and concentrates income among a small group.

Basu said that even if the global and US economies grow at a moderate pace, some people remain trapped in recession-like conditions. Recent research shows global inequality has been rising over the long term, and in the AI era wealth is growing much faster for a tiny share of the population - the top 0.001% - than for any other group. Income flows to shareholders, profit distributors and intellectual property holders, while demand for workers declines.

He said China's rising position in industrial chains supports economic growth, but policymakers need to ensure workers can share in the benefits. Basu proposed an “accordion tax” aimed at narrowing the gap between high- and low-income groups while preserving incentives for investment and innovation. He argued that individual countries face limits in pursuing redistribution, as capital can move across borders in a digitally connected world, and called for China and the United States to jointly promote global policy coordination to address income distribution challenges posed by AI.