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Inclusive Development: Two Papers on Conceptualization, Application, and the ADB Perspective

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Abstract

This compendium brings together two companion papers on inclusive development. The first paper uses the global literature to formulate a conceptualisation of inclusive development and inclusive growth, and to put the conceptualisation through its paces by applying it to the specific case of donor assistance to rural infrastructure. The second paper conducts a detailed review and a synthesis of Asian Development Bank literature on inclusive growth and inclusive development, to see how one particular international organization has addressed, and attempted to resolve, the analytical and operational issues associated with inclusive development.
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... As we have seen, the quality of such growth, its sustainability as well as the degree to which its benefits may extend to the widest sections of the society have increasingly become of interest. This has led to greater attention being given to inclusive growth as a way of addressing equity considerations underlying the growth process in recent years (see Tandon and Zhuang, 2007;Ali, 2007a and2007b;Rauniyar and Kanbur, 2010;Klasen, 2010;and Felipe, 2010;Ianchovichina et al, 2009, among others). ...
... Taking a somewhat narrow approach, for instance, inclusive growth can be characterised as 'growth plus declining income disparities' (Rauniyar and Kanbur, 2010). In this formulation, inclusive growth comes close to the notion of PPG in relative terms with the difference perhaps that its notion of equality is more embracing and reaches beyond a narrow definition of the poor. ...
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An extensive descriptive review of a broad set of development indicators for the past two decades and an estimation of a combined single score for measuring ‘inclusive growth’ for individual countries has shown that overall North Africa has fared relatively better recently both in historical terms and compared to many other regions. Moreover, the same decade saw a raft of other encouraging achievements: life expectancy rose, educational and health indicators improved, the number and proportion of slum dwellers declined and more people enjoyed civic amenities such as access to improved drinking water and sanitation. The main area where the region has noticeably lagged behind the rest of the world in recent years is its demographic momentum. Taking population size and growth into account qualifies some of the positive economic achievements of the region in the past decade. GDP growth in per capita terms appears much more modest. Strong supply-side demographic pressures will no doubt continue to persist for years and will accentuate the challenge of achieving inclusive growth in North Africa. This leads us to conclude that no matter what notion of inclusive growth we adopt, for the region, generating high quality employment will be an essential element and will pose one of main challenges to prospects for achieving inclusive growth.
... The quality of growth, its sustainability as well as the degree to which its benefits may extend to the widest sections of the society have thus attracted increasing attention (see Tandon and Zhuang, 2007;Ali, 2007a and2007b;Rauniyar and Kanbur, 2010;Klasen, 2010;and Felipe, 2010;Ianchovichina et al, 2009, among Despite growing calls for growth to be made more inclusive, there is not as yet a universally agreed notion of 'inclusive growth'. While growth is easier to define and measure, specifying what makes it 'inclusive' is much more contentious. ...
... Taking a somewhat narrow approach, for instance, inclusive growth can be characterised as 'growth plus declining income disparities' (Rauniyar and Kanbur, 2010). In this formulation, inclusive growth stretches the Pro-Poor-Growth (PPG) approach by adopting a wider notion of who constitutes the poor. ...
Technical Report
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Interest in the relationship between growth and equity has a long tradition in economics. In recent years, this interest has been invigorated with new calls for greater attention to equity and distribution to accompany economic growth. This paper builds on my earlier work on conceptual and empirical aspects of inclusive growth in North Africa, which appeared as a Policy Brief by the African Development Bank (Hakimian, 2013). Here my focus is on the methodology of for measuring inclusive growth. This involves a full discussion of measurement steps involved in the construction of composite indicators along with a discussion of the principal challenges in constructing such an index. I use two five-year period averages to capture the developments in the decade before the Arab uprisings (2001-5 and 2006-10). To contextualise the measurement effort, Section 2 offers a broad review of thinking on inclusive growth in conceptual and policy terms. This is then followed by a discussion of a number of common composite indicators that are used to measure diverse socio-economic phenomena and a critical examination of their uses and limitations in Section 3. This sets a first step to measuring inclusive growth through a single composite index. Section 4 focuses on an in-depth discussion of the dimensions and the choice of indicators and methodological problems encountered for constructing such an index. The computation results are presented followed by a critical discussion of the findings, their meaning, significance and limitations. A final section offers our summary and conclusions. A
... These policies comprise government expenditure, such as welfare expenditure, social security incentives, and subsidies (Stack, 1978). Additionally, the government's involvement in programs that create job opportunities boosts economic productivity and is reinvested into the economy through public institutions to ensure inclusive prosperity (Lustig, 2016;Rauniyar & Kanbur, 2010). Therefore, Keynes's theory proposes that the government's involvement in the economy can reduce income inequality through the channel of specific types of government expenditure touching on the citizens' social welfare, and thus enhancing households' living standards (Stack, 1978). ...
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Different developing economies are encountering various regional challenges associated with income inequality. However, several contributing factors to inequality and access to opportunities, such as a quality education system, have been identified as the key factors. Thus, the study sought to determine the reverse causal nexus between pro‐poor policies (government spending on education) and income inequality in Kenya and the spatial linking relationship with the case of Ugandan and Tanzanian economies. Autoregressive Distributed Lag (ARDL) model, Johansen Cointegration, and Granger Causality approach were to model the relationship between pro‐poor policies and income inequality using time‐series data from 1982 to 2018. The findings indicate a positive short and long‐run relationship between government spending on education and income inequality in the three economies. Also, the results show a significant long‐run relationship between human capital measures (average years of schooling, secondary education attainment, and tertiary education attainment) and income inequality in the three economies. However, the results indicate no reverse causal nexus between the study variables in Kenya and Uganda, but unidirectional causal nexus exists in the case of the Tanzanian economy. The study recommends that government stakeholders implement pro‐poor policy initiatives that result in the structural change of social infrastructures and enhanced quality of life.
... Pour définir la croissance inclusive deux conceptions prédominent et sous-tendent les définitions proposées, la première basée sur le résultat et la deuxième sur le processus. Unecroissance est inclusive quand elle s'accompagne de réduction des disparités de revenus (Rauniyar et Kanbur, 2010). Parallèlement, une définition plus large de la croissance inclusive est proposée. ...
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Long run high rate economic growth didn't guarantee a reduction in poverty and social inequities in many countries during those last three decades. Therefore, inclusive growth was proposed, by international financial institutions in the early 2000s', as a response to include poor and marginalized people in economic growth's process. Social entrepreneurship, by empowering and emancipating people in detecting and exploiting economic opportunities, contributes improving economic growth's inclusiveness. However, do social entrepreneurship and inclusive growth pursue same goals and objectives? Do they work at same level? This article aims to point out and explore the theoretical relationship between social entrepreneurship and inclusive growth. This work begins by presenting inclusive growth and entrepreneurship, their emergence context and the theoretical conceptions. Then, points out the theoretical overlaps between the two concepts. Finally, exposes Moroccan National Initiative for Human Development (NIHD).
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Inclusive growth is now at the heart of mainstream development economics. Ifzal Ali explains why developing Asia needs to move its development focus from poverty reduction to inclusive growth. This policy brief examines the implications of such a shift for public policy. About the Asian Development Bank The work of the Asian Development Bank (ADB) is aimed at improving the welfare of the people in Asia and the Pacific, particularly the nearly 1.9 billion who live on less than $2 a day. Despite many success stories, Asia and the Pacific remains home to two thirds of the world’s poor. ADB is a multilateral development finance institution owned by 67 members, 48 from the region and 19 from other parts of the globe. ADB’s vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens. ADB’s main instruments for providing help to its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ADB’s annual lending volume is typically about $6 billion, with technical assistance usually totaling about $180 million a year. ADB’s headquarters is in Manila. It has 26 offices around the world and has more than 2,000 employees from over 50 countries.
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Drawing on data from 25 countries from all regions of the world, this book addresses questions that have become very important in recent years, as the spatial dimensions of inequality have begun to attract considerable policy interest; what is spatial inequality? Why does it matter? And what should be the policy response to it? In China, Russia, India, Mexico, and South Africa, as well as in most other developing and transition economies, spatial and regional inequality - of economic activity, incomes, and social indicators - is on the increase.Spatial inequality is a dimension of overall inequality, but it has added significance when spatial and regional divisions align with political and ethnic tensions to undermine social and political stability. Also important in the policy debate is a perceived sense that increasing internal spatial inequality is related to greater openness of economies and to globalization in general.Despite these important concerns, there is remarkably little systematic documentation of what has happened to spatial and regional inequality over the last twenty years. Correspondingly, there is insufficient understanding of the determinants of internal spatial inequality. © United Nations University World Institute for Development Economics Research (UNU-WIDER), 2005. All rights reserved.