Why Inclusive Growth?

The global crisis and its tragic human legacy followed a long period of global prosperity, the so-called Great Moderation. During that time, sustained economic growth led to a substantial increase in average living standards worldwide and a reduction in poverty in the developing world. Society continues to feel the effects of the crisis. More than 200 million people worldwide are out of work, there are 15 million more people in OECD countries that are unemployed today than when the crisis began in 2007, and millions more people in developing countries have fallen in poverty. Weak global growth prospect is expected to push unemployment beyond today’s already high levels, leaving an additional 5.1 million unemployed in 2013 and 3 million in 2014. The risk of entrenched unemployment is high – a condition that further aggravates poverty and inequalities. Slowdown in emerging economies and developing countries is taking its toll on social spending, and in certain countries it threatens the sustainability of nascent safety net schemes in the context of already higher poverty levels.

Social tensions are visible across the globe. Citizens throughout the world are taking to the streets to voice their concerns and demands: from the initial “flash-point” social movements in the Arab countries, Los Indignados in Spain, Occupy Wall Street-London-Davos, labour protests in South-East Asia, student protests in Santiago de Chile and Montreal, to political demonstrations across Europe.  It is imperative to find solutions that foster economic growth in a more inclusive manner, where the gaps between the rich and the poor – not only in terms of income, but also in other dimensions that matter for people – are less pronounced, and opportunities, as well as the “growth dividend”, are shared more equally.


OECD Inclusive Growth Project

Launched with the support of the Ford Foundation, the Inclusive Growth project is part of the new and ambitious multi-dimensional initiative called “New approaches to Economic Challenges” or NAEC, which intends to revisit our economic models, learn the lessons from the crisis and improve our analytical framework to make our markets works for all. The inclusive growth projects aims to deliver a renewed strategic policy agenda by identifying how to define and measure the concept and shedding light on the policy options and tradeoffs to promote growth and inclusivity. It will be conducted through a consultative process that will engage a range of stakeholders in two workshops, expanding the process beyond policy makers, and culminate in best practices and policy recommendations for developed and developing country governments. The project will deliver a conceptual framework and possible avenues for policy makers to develop and implement an Inclusive Growth agenda.

The project has two distinct phases: i) concept and measurement; and ii) implementation.

Phase 1 -  Concept and Measurement

This phase will define an analytical framework that is workable and at the same time recognises the multi-dimensionality of inclusive growth. It will also provide practical proposals for improving measures and using them to monitor and benchmark countries’ performance. Based on the OECD Framework for Measuring Well-Being and Progress, this part will provide practical proposals for improved measures and monitoring indicators.


Phase 2 – Implementation 

Advancing towards inclusive growth requires a good understanding of the trade-offs among different policy options, as well as their likely spill-over and side-effects, therefore, the second phase seeks to establish a typology of public policy options and their effects on growth and inclusiveness along the dimensions highlighted in Phase 1. It will facilitate the mainstreaming of inclusive growth in OECD analysis and policy advice.


Value of OECD

The OECD champions new ways of thinking to approach long-standing global problems, and it helps governments in their efforts to find sustainable solutions. The organisation’s convening power brings policy makers together, using evidence-based analysis to identify what works and what does not, adapt existing tools, and foster agreement on instruments and standards to help governments improve policies.

Investment in people underlies the OECD’s “go social” principle of economic and governance reforms, while systemic public policy changes align with the “go structural” principle, and far-sighted consideration of environmental implications to growth embodies the “go green” imperative.

As a multi-disciplinary international institution that produces independent evidence-based analysis, and building on its recent work on growth, inequalities and well-being, the OECD is developing a new vision for inclusive growth that combines strong economic growth with improvements in living standards and outcomes that matter for people’s quality of life (e.g. good health, jobs and skills, clean environment, efficient institutions).


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