Inclusive Growth and Indices of Social Development: conceptual explorations with country narratives Arjan de Haan IDRC, formerly ISS

contents Background to this paper Concept inclusive growth – some genealogy GDP, inequality, HDI Inclusive growth as process – Production – Accountability, participation, governance 2

background IDRC program ‘supporting inclusive growth’ A fairly broad working definition “growth that improves the access of the poor to expanding economic opportunities and reduces inequality” While it’s right to have broad working definition, we decided to review different country narratives And: how is the concept different from earlier ones? – process and outcomes – governance and beyond 3

Country narratives: 10 emerging (more or less) economies 4

a little of genealogy concept inclusive growth led by emerging economies, notably India 2004 similar but in different language China, Brazil, South Africa international agencies: AsDB, UNDP, now AfDB After: – 1997 crisis turnaround pro-growth emphasis – period ‘inclusive neo-liberalism’ 5

growth-is-not-enough concepts growth with redistribution (1980s Washington Consensus style) growth and poverty reduction poverty elasticities inequality ‘back on the agenda’ pro-poor growth (growth rate bottom 10%) growth incidence curves 6

Growth and … Inequality – while diverse now well explored, WDR 2006 – Growth Commission ‘toxic inequalities’ HDI: remains contested but also well-known debate Gender – instrumental case (no link with growth in dozen countries – see below) Governance, institutions and growth (below) Now: growth as process …………… 7

Inclusive growth (see ADB paper Klasen) Inclusive growth as outcome – Growth with declining income inequality – Growth with growing social opportunities IA-HDI? -> HD and social protection policies 8

Inclusive growth as process Expanding equal opportunities and access – Social (as above) – Infrastructure – Etc Measurement not clear, possibly at project level -> can / should we include governance and social development indicators ? 9

Inclusive growth as improving governance -> no story / not-so-good-story GDP and rule of law (WGI) GDP and voice and accountability (WGI) 10

Intermezzo: Governance and ISD comparison Voice & accountability – civic activism Voice & accountability – clubs & associations 11

Growth & ISD – with governance 12

Conclusions Growth paradigm is shifting, increasingly broad understanding well-being All good things do not go together ISD (some) show links with other development outcomes (Robert, Yi Lerh and John) Can we link this to and ‘inclusive growth’ indicator ? Will strength of explanation increase if we include governance ? 13