Helpdesk

Question
Inclusive Growth: What is the latest thinking on inclusive growth? In particular on: 1) the barriers to poor people's participation in growth, and 2) the policy responses required to promote more inclusive growth.

Helpdesk response
Key findings: Various barriers and constraints to poor people’s participation in growth are identified in the literature. These include:

• Geography
• Limited investment in human capital
• Poor health
• Limited assets and access to credit
• Economic insecurity

Some of the literature argues that facilitating access of the poor to growth is insufficient to obtain inclusive growth; attention must also be paid to the quality of their participation. While the poor could in some situations gain access to markets, they may be vulnerable to the effects of market failures. In the case of trade as a means of promoting growth, export expansion in many countries has resulted in a higher number of jobs for women. The downside is that such jobs often entail low wages and poor working conditions.

A large range of policies to promote inclusive growth are discussed in the literature. They include:

• Maintaining an enabling environment for business and investment
• Redistributive public expenditures and social protection
• Human capital and job creation
• Broad-based sectoral growth
• Infrastructure development
• Partnerships between government and the private sector
• Assessment and monitoring

Full response: http://www.gsdrc.org/docs/open/HD678.pdf