Inclusive growth

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Inclusive growth is economic growth that raises standards of livings for broad swaths of a population. [1] [2] [3] [4] Proponents for inclusive growth warn that inequitable growth may have adverse political outcomes. [5]

Contents

The definition of inclusive growth implies direct links between the macroeconomic and microeconomic determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension refers to changes in economic aggregates such as the country’s gross national product (GNP) or gross domestic product (GDP), total factor productivity, and aggregate factor inputs. [6]

Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing countries. Nonetheless, an emphasis on inclusiveness—especially on equality of opportunity in terms of access to markets, resources, and an unbiased regulatory environment—is an essential ingredient of successful growth. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living. [7]

Barriers

It is widely accepted that inclusive growth is practically challenging to be achieved in real world. [8] On the one hand, there is a lack of a comprehensive and worldly recognised set of standards to systematically measure the inclusiveness of growth, which makes data collection and policy evaluation difficult. [9] Both the intangibility and long term perspective make it less desirable than other more conspicuous economic targets for policymakers. [10] On the other hand, as pointed out by some detractor, many negative externalities of growth are fundamentally at odds with the target of inclusiveness, [11] which further makes the situation complex. In many real life cases, inclusiveness carries much less weight than economic growth itself, and sometimes sacrificed thoroughly. [12] [13] [14]

See also

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References

  1. ↑ Cerra, Valerie (2021), "An Inclusive Growth Framework", How to Achieve Inclusive Growth, Oxford University Press, pp. 1–31, doi: 10.1093/oso/9780192846938.003.0001 , ISBN   978-0-19-284693-8
  2. ↑ Ranieri, Rafael; Ramos, Raquel Almeida (March 2013). "Inclusive Growth: Building up a Concept" (PDF). Working Paper. 104. Brazil: International Policy Centre for Inclusive Growth. ISSN   1812-108X . Retrieved 13 January 2015.{{cite journal}}: Cite journal requires |journal= (help)
  3. ↑ Anand, Rahul; et al. (17 August 2013). "Inclusive growth revisited: Measurement and evolution". VoxEU.org. Centre for Economic Policy Research. Retrieved 13 January 2015.
  4. ↑ Anand, Rahul; et al. (May 2013). "Inclusive Growth: Measurement and Determinants" (PDF). IMF Working Paper. Asia Pacific Department: International Monetary Fund. Retrieved 13 January 2015.
  5. ↑ Dutzler, Barbara; Johnson, Simon; Muthoora, Priscilla (2021), "The Political Economy of Inclusive Growth", How to Achieve Inclusive Growth, Oxford University Press, doi: 10.1093/oso/9780192846938.003.0015 , ISBN   978-0-19-284693-8
  6. ↑ Elena Ianchovichina and Susanna Lundstrom, "What is Inclusive Growth?", The World Bank, February 10, 2009.
  7. ↑ Elena Ianchovichina and Susanna Lundstrom, 2009. "Inclusive growth analytics: Framework and application", Policy Research Working Paper Series 4851, The World Bank.
  8. ↑ Waite, David; Roy, Graeme (2 November 2022). "The promises and pitfalls of operationalizing inclusive growth". Regional Studies. 56 (11): 1989–2000. Bibcode:2022RegSt..56.1989W. doi:10.1080/00343404.2022.2050201. ISSN   0034-3404 . Retrieved 16 January 2024.
  9. ↑ Sharafutdinov, Rustam Ilfarovich; Akhmetshin, Elvir Munirovich; Polyakova, Aleksandra Grigorievna; Gerasimov, Vladislav Olegovych; Shpakova, Raisa Nikolaevna; Mikhailova, Mariya Vladimirovna (1 April 2019). "Inclusive growth: A dataset on key and institutional foundations for inclusive development of Russian regions". Data in Brief. 23: 103864. Bibcode:2019DIB....2303864S. doi:10.1016/j.dib.2019.103864. ISSN   2352-3409. PMC   6660622 . PMID   31372475.
  10. ↑ Kamran, Muhammad; Rafique, Muhammad Zahid; Nadeem, Abdul Majeed; Anwar, Sofia (2023). "Does Inclusive Growth Contribute Towards Sustainable Development? Evidence from Selected Developing Countries". Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement. 165 (2): 409–429. Retrieved 16 January 2024.
  11. ↑ Devarajan, Shantayanan. "The future of inclusive growth". Brookings. Retrieved 16 January 2024.
  12. ↑ "The case for inclusive growth | McKinsey". www.mckinsey.com. April 28, 2021. Retrieved 16 January 2024.
  13. ↑ Demirguc-Kunt, Asli; Klapper, Leora; Singer, Dorothe (April 2017). "Financial Inclusion and Inclusive Growth: A Review of Recent Empirical Evidence". Policy Research Working Papers. doi:10.1596/1813-9450-8040. S2CID   157583912 . Retrieved 16 January 2024.
  14. ↑ Heshmati, Almas; Kim, Jungsuk; Wood, Jacob (September 2019). "A Survey of Inclusive Growth Policy". Economies. 7 (3): 65. doi: 10.3390/economies7030065 . ISSN   2227-7099.
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