Inclusive Growth: What’s in a Name?

Since the financial crisis in 2008, and the Arab Spring in 2011, equality and inclusion have been major themes in global debates. Development Banks and IMF added to the voices and concerns about the unsustainability of high and rising inequalities, and it became the subject of debate within the private sector and fora like the World Economic Forum. Studies like Piketty’s Capital in the Twenty-First Century, Wilkinson and Pickett’s The Spirit Level, and Acemoglu and Robinson’s Why Nations Fail stress the negative consequences of inequality, and the need for inclusive institutions for economic transformation.

Half a decade after the financial crisis, concerns about inequality and exclusion remain equally important. However, economic uncertainty, and political and ideological shifts, seem to pose critical policy questions. Many of the imbalances that caused the crisis and remain responsible for persistent deprivation continue to exist. The extended recession and austerity measures in many OECD countries reduce confidence that inclusiveness will be a high priority – despite public protests about ‘the other 99%’. Emerging economies did relatively well throughout the financial crisis, but are now experiencing the impacts of the downturn. The post-crisis fiscal expansion has given way to contraction. The need to find policies that promote growth and inclusion, thus, is as urgent as ever.

My recent paper in the European Journal of Development Research argues there is a need to take growth-poverty debates beyond issues of outcomes measures, and policy analysis beyond questions of redistribution. It proposes to put inclusiveness at the core of analysis of how growth is created, of investment, business and particularly employment and conditions and recognition of work. For this, and building on our work at IDRC, it uses the concept of inclusive growth: the paper discusses the ascendency of the notion, the place of governance and social development in its definition and measurement, and the critical question of visioning the poor, and non-poor, as the people who create and sustain growth.