Wednesday, June 1, 2011

How to make growth inclusive?

By looking at inclusive growth case studies of Brazil (inclusive growth seems likely to be enduring), Viet Nam (strong progress in achieving MDGs but inequality is undermining poverty efforts), and Ghana (growth reduced poverty but increased inequlaity), Elizabeth Stuart of Oxfam International lists three strategies to make growth inclusive.

  • A redistributive agenda: Cash transfers, redistributive public expenditure on health, education, and agricultural services, and a progressive taxation system.
  • Macroeconomic prudence: Sustainable, moderate levels of inflation, deficits, and debt; and counter-cyclical policies, protecting pro-poor elements of public spending
  • A policy environment conducive to pro-poor private investment: Domestically owned, labour-intensive private sector, especially small and medium-sized enterprises (SMEs).

Stuart argues that growth should be taken as a means not an end itself (criticism pointed at The Growth Report).