Attempting to pin down the (seemingly) secret ingredients of ‘inclusive growth’
When it comes to policies and strategies, definitions matter. They provide the boundary lines for what will be tackled. They set the objectives that will determine spending choices. Importantly, they are a vital step towards greater transparency and accountability.
Inclusive Growth is a widely used term. In 2014 the IMF, European Commission and DFID have all used this term in their work plans or strategies and the Open Working Group on Sustainable Development Goals has included it as a part of the post-2015 development agenda.
For such a ubiquitous term, the meaning of inclusive growth is incredibly hard to pinpoint. There are also surprising differences in approach amongst organisations and institutions. At times, the word ‘inclusive’ is inserted before ‘growth’ but the approach looks unexpectedly similar to a standard economic growth package.
The first challenge then, to donors and governments, is to explicitly define what they mean when they say they are aiming for ‘inclusive growth’.
The second would be to make sure the ‘inclusive’ part of inclusive growth is clearly conceptualised – and then operationalised. An important question to answer would be: what are the distinguishing characteristics of an inclusive growth, as opposed to a straight-forward, economic growth strategy?
In our recently released discussion paper [*] we look across the literature and provide a working definition of inclusive growth which considers 6 key ingredients. Growth that is inclusive needs to:
- Have broader objectives than increasing income and GDP and require governments to proactively work to achieve those objectives, rather than assuming that positive outcomes will automatically come through growth
- Translate into gains in human development and increased well-being
- Benefit all groups, including the most marginalised
- Reduce poverty and inequality
- Consider participation, not just distribution outcomes and therefore focus on increasing active participation in the economy and a say in how the economy is run.
- Promote the sustainable use of natural resources and climate protection.
These 6 elements are more extensively discussed in our full inclusive growth discussion paper [*] .
So back to the two challenges above – I’d really like to see inclusive growth clearly defined and conceptualised where it is used in work plans, strategies and policies. These 5 ingredients provide a basis for organisations starting along this road.
[*] We have produced a short 6 page discussion paper under the title “what is inclusive growth?” which highlights the key arguments and debates around inclusive growth. We have also produced a longer paper under the same title which explores the topic in more detail.