Inclusive growth is an idea which advances equitable economic opportunities for all economically involved participants during economic development with shared rewards incurred by each segment of society. It is the goal of governments to eliminate poverty and improve living standards, while building social capital and enhancing individual and family freedom. This is not simply an economic policy but also a way of thinking and incorporating multiple perspectives that affect individuals and families. By encouraging greater participation in community economic development activities, inclusive growth contributes to lasting sustainable development.
There are many different types of inclusive growth programs. The most popular is the Participatory Economy, a system in which economic activities are planned and managed primarily through the local level. Another similar program is the Multistakeholder Development Approach (MDA), which seeks to build inclusive economic institutions that improve quality of life and provide empowerment at the community level. Multi-stakeholder models tend to be more successful at attaining sustainable development due to their ability to bring diverse perspectives to a common cause.
There are also a variety of policies that are designed to promote inclusive growth. Some examples include: inclusive economic planning processes; the use of inclusive policies in international development and the design of inclusive growth instruments such as the World Trade Organization Agreement on Investment and Permanent Structured Assistance for developing countries. In addition, there are various inclusive policies on taxation, including progressive tax systems, that have been adopted by many nations. In the United States, President Bill Clinton’s financial stimulus package called the Anti-Aging Tax Credit and the American Jobs Act included a number of programs that encourage economic investment at the local level, as well as assistance for first time home buyers.
Not all efforts, however, succeed. An inclusive growth approach taken by the government, for example, has failed to meet expectations. Despite promises to develop infrastructure and employment opportunities, little progress was made, and corruption was widespread. President Benigno Aquino III and his administration have been criticized for failing to meet the inclusive growth targets they made during the term of office. Worse, these same criticisms have been made of the New York City mayor, Bloomberg, following his election last November.
In an attempt to rectify some of these problems, the United Nations World Development Programs has released a set of strategies and goals to guide inclusive economic growth in the developing world. This set of recommendations were welcomed by developing countries, but critics argue that they fall short, recommending only “modest” changes in practices. These critics argue that inclusive growth requires far more than small incremental change – it requires massive, radical transformation. This can be seen in attempts by some governments to increase productivity and employment through better education and training programs, or by making it easier for workers to join the workforce.
Still, inclusive growth remains a long way off in the developing world. In parts of the developing world, for example, the infrastructure has not been improved sufficiently to support development goals. Developed countries may implement policies that offer financial assistance or other services to ensure access to quality public and private services. Alternatively, the focus on inclusive growth may shift towards ensuring that everyone has access to basic necessities such as food, water and electricity.