New work: Agricultural Transformation

Poverty reduction remains a major challenge. The story being told by many governments and donors is that the solution to this challenge is economic growth, fuelled by economic transformation (the movement of labour and capital away from less productive agricultural activities to the more productive manufacturing and services sectors of the economy). Economic history in some way endorses this view: structural change in the economy is the only known permeant route out of poverty.

But the picture isn’t always so rosy.

Measuring what matters

In Laudato Si’ – the Pope calls us to think about what we mean by progress.

“Put simply, it is a matter of redefining our notion of progress. A technological and economic development which does not leave in its wake a better world and an integrally higher quality of life cannot be considered progress.” (194)

It has been understood for years that we cannot and should not try to reduce progress or development to economic development. Similarly, it is widely accepted that success cannot just be based on economic indicators, in particular the narrow focus of GDP growth.

The reason in many ways is simple.

Jobs and Livelihoods: What should we be focussing on?

Towards the end of March, the International Development Committee [1] report on ‘Jobs and Livelihoods’ was released. This inquiry looked at DFID‘s economic development strategic framework (EDSF) to determine what impacts it could make on increasing jobs.

The report noted the importance of ‘improving livelihoods’ rather than just focussing on formal sector jobs which, (even where there is success in creating these) may not be accessible to many women and men living in poverty. Most encouragingly, the IDC also focussed on the informal economy

Inequality matters. The post-2015 agenda must matter too.

Next year, governments will come to the end of a long process to agree a new development agenda to replace the MDGs. A key demand from civil society from the earliest days of this process is that the growing problem of global inequalities should be centre stage of this new vision; many governments have joined this call. The MDGs concentrated on averages, so it was easy to hide large and growing gaps. The post-2015 agenda has the opportunity to set that right.

Growing inequalities are a problem because they undermine the very fabric of society. As Pope Francis tweeted, “inequality is the root of social evil.” Inequalities make it more difficult to break the cycles of poverty and exclusion, and move us away from a world of dignity and inclusion. Inequality is not sustainable; exclusion leads to conflict.

The richest 85 people now have the same amount of wealth as half the world’s population

Comment on the DCED Proposal of a Business Environment Indicator for the Post-2015 Framework

Should an indicator that measures improvements in national business environments be included in the post-2015 framework? This is a question that the Donor Committee for Enterprise Development (DCED) has recently posed. They have proposed 4 options for such an indicator.

The world is currently waiting to see whether the Open Working Group (OWG) proposed set of global goals and targets will be reopened for negotiation. The indicators, on the other hand, should not be agreed through a process of intergovernmental negotiation. Indicators need specific technical expertise and are too complex to become political footballs. The UN Statistical Commission have indicated through their briefing note that they will have a role to play in convening this process, and will include relevant input from member states and other stakeholders.

In this blog I specifically comment on the DCED proposal drawing on CAFOD’s experience and research on what a pro-poor business environment looks like.

Thinking small about inclusive growth

Today I’m posting my fourth and final blog in this inclusive growth mini-series (you can click here for the first, second and third blogs).

Working on economic justice issues here at CAFOD one of my main areas of work is on small businesses: the role that these play in economies and to the lives of the poorest women and men and the support that they need (you can see some of our other small business blogs here). So what’s the connection…? Do small businesses have a role to play in inclusive growth?

Inclusive Growth – some steps in the right direction

Last week I emphasised the need for strong definitions when using ‘inclusive growth’ in strategies and work plans. I also highlighted some possible ingredients that should be considered for this.

But once we are clear what it is, what are the steps that we should be taking towards achieving inclusive growth?

Given the diffuse and varied definitions of inclusive growth, it is surprising that there is considerable consensus in the literature on how to achieve or operationalise it. As our working definition highlighted, growth will not automatically be inclusive. Proactive intervention and strategies are needed to ensure wider development outcomes. Briefly, these include 7 aspects:

Definitions matter

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.

What’s so inclusive about growth?

Franklin Roosevelt once said “We are trying to construct a more inclusive society…. We are going to make a country in which no one is left out”.

Fast-forward to 2014 and it would seem that an ‘inclusive society’ is harder to achieve than hoped with US inequality levels soaring.

So back to the question – What’s so inclusive about growth?

Historically? Well as the case of the US shows(along with many other experiences from around the world) nothing really. As the OECD highlights, there are three problems that even the record levels of growth of the 1990s and decade of 2000s failed to tackle: poverty, unemployment and inequality.

What makes a green economy a fair one too?

Guest blog post by Kate Raworth

Kate Raworth is a Visiting Fellow in Economics at IIED. Her research focuses on rethinking economics in the faces of extreme social inequalities and planetary boundaries. She blogs at www.kateraworth.com and tweets @KateRaworth

Ask any country’s leaders about their nation’s strategy for the next decade, and chances are, its colour will be green. ‘Green economy’ and ‘green growth’ policies are moving to centre stage in a surprising number of countries, including many low- and middle-income ones. From Vietnam and Barbados to Ethiopia and Mozambique, there’s a new focus on combining environmental sustainability with economic growth – particularly by cutting or curbing greenhouse gas emissions, while ensuring a rising GDP.

For the sake of ecological integrity, that’s good news – but what about social justice? Green policies to transform key sectors – ranging from energy and transport to infrastructure and agriculture – bring many implications for women and men in vulnerable and low-income communities. And it would be dangerous to assume that they will automatically bring benefits. Indeed, without care, green policies could well do the opposite.