Inclusive Growth Beyond Poverty and Social Exclusion

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Max Spoor, International Institute of Social Studies, Erasmus University, Oxford June 2011

Max Spoor, International Institute of Social Studies, Erasmus University, Oxford June 2011

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  • 1. Inclusive Growth: Beyond Poverty and Social Exclusion?
    Max Spoor
    International Institute of Social Studies, Erasmus University
  • 2. The Context
    Legacy of Soviet, Soviet-type and Yugoslav social systems (command economies, social systems, social distribution, participation)
    Transition Strategies (gradualist, shock, transition indicators on privatization, liberalisation and state/private sector influence)
    Political Transformations (semi- or consolidated democracy, semi- or consolidated authoritarian regimes, role civil society)
    Initial Conditions (income levels, existing poverty levels, closeness to western markets, pre-transition integration with non-Comecon markets)
  • 3. Geographic Position (1)
    • SEE (Southeast Europe): Albania, Bosnia & Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, and Serbia.
    • 4. CEE (Central and Eastern Europe): The Baltic countries: Estonia, Latvia, Lithuania and the Central European ones, Bulgaria, Czech Republic, Hungary, Poland, Romania Slovakia, and Slovenia (EU).
    • 5. CIS (Commonwealth of Independent States):
    • 6. Russia Federation.
    • 7. Western CIS: Belarus, Moldova and Ukraine
    • 8. Caucasus: Azerbaijan, Armenia and Georgia.
    • 9. Central Asia: Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan.
    Note: Georgia, Turkmenistan Ukraine are notmember of the CIS organization. However, here we have kept the name CIS as indicating the FSU (minus de Baltic States)
  • 10. Growth Models (2)
    Pre-dominant Growth Models (Cornia 2009):
    Broad-based, industry and investment (FDI)
    Croatia, Czech Republic, Poland, Slovenia
    Foreign lending (+FDI) and real estate boom
    Estonia, Bulgaria, Georgia, Latvia, Lithuania and Moldova
    Carbonhydrate Sector + Minerals exports
    Azerbaijan, Kazakhstan, Russia, Turkmenistan
    Official Development Aid (ODA) and Migrant Remittances
    Albania, Armenia, Bosnia & Herzegovina, Moldova, Kyrgyz Republic, Tajikistan
    Mixed Growth Models:
    Belarus, Serbia, Slovakia, Ukraine, Uzbekistan
  • 11. Drivers of Growth (3)
    Extractive industry and mining
    Manufacturing industry and services
    Cash-crop agriculture
    Construction and real estate
    Migrant remittances
    Official Development Assistance
    Illegal Activities and shadow economy
  • 12. Political Economy (4)
    Political Economy Settings (Cerami and Stubbs 2010):
  • 13. HDIs
    In-Between Country Inequalities
  • 14. Inclusive Growth and Human Development
    Terry McKinley (2010)
    Development of a composite indicator of inclusive growth
    Two aspects:
    Growth, employment, and infrastructure
    Income, poverty, and inequality
    Equal weights (50%) to both
  • 15. Growth, employment & infrastructure
    Economic growth
    Real rate of growth of GDP/capita
    Share of industry, services and agriculture in total value added (indicating the degree of structural change)
    Productive employment
    Share of the employed in industry
    Share of the employed in manufacturing
    Share of own-account workers and formally unpaid family workers in total employment
    Supplementary indicator (share of workers below 2.50 US$/day) at PPP poverty line
    Access to infrastructure
    Proportion of the population with access to electricity
    Number of mobile phone subscribers per 100 people
  • 16. Income, poverty and inequality
    Poverty indicators:
    The proportion of the population living below nationally determined poverty lines
    The proportion of the population living below the international poverty line (in 2005 constant prices, of 2.50 US$/day)
    Inequality indicators, vertical:
    The Gini coefficient of income inequality
    The income share of the poorest 60% of the population
    Inequality indicators, horizontal:
    The income or expenditure gap between rural and urban areas
    Where feasible, the income or expenditure gap among regions or among major ethnic groupings
  • 17.
  • 18. Towards Inclusive Growth
    Policy agenda focused on the quality of growth and recovery
    Diversification of growth poles and dynamic sectors
    Public investment in leverage points (roads, communication etc) in particular in intermediate cities where poverty is highest
    Fiscal policies to diminish income inequality
    Diminishing asset inequality (through redistribution, rental markets)
    Improving social infrastructure
    Combining labour market flexibility and improving security (flexicurity?)
    Human capital building, job opportunities for the “new poor”