Inclusive growth is

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

that raises standards of livings for broad swaths of a population. It is widely accepted that inclusive growth is challenging to be achieved in the real world. Both the intangibility and long term perspective make it less desirable than other more conspicuous economic targets for policymakers. There is a lack of a comprehensive and worldly recognised set of

standards Standard may refer to: Symbols * Colours, standards and guidons, kinds of military signs * Standard (emblem), a type of a large symbol or emblem used for identification Norms, conventions or requirements * Standard (metrology), an object t ...

to systematically measure the inclusiveness of growth, which makes data collection and policy evaluation difficult. Proponents for inclusive growth warn that inequitable growth may have adverse political outcomes. The definition of inclusive growth implies direct links between the

macroeconomic Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/ GDP ...

and microeconomic determinants of the economy and economic growth. The microeconomic dimension captures the importance of structural transformation for economic diversification and

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...

, while the macro dimension refers to changes in economic aggregates such as the country’s

gross national product The gross national income (GNI), previously known as gross national product (GNP), is the total amount of factor incomes earned by the residents of a country. It is equal to gross domestic product (GDP), plus factor incomes received from n ...

(GNP) or

gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...

(GDP),

total factor productivity In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. Under some simplifying assumptions about the production technology, growt ...

, and aggregate factor inputs. Sustainable economic growth requires inclusive growth. Maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in

corruption Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...

, which is a major problem in

developing countries A developing country is a sovereign state with a less-developed Secondary sector of the economy, industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. ...

. Nonetheless, an emphasis on inclusiveness—especially on

equality of opportunity Equal opportunity is a state of fairness in which individuals are treated similarly, unhampered by artificial barriers, prejudices, or preferences, except when particular distinctions can be explicitly justified. For example, the intent of equa ...

in terms of access to markets, resources, and an unbiased regulatory environment—is an essential ingredient of successful growth. The inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living.

Barriers

Many negative externalities of growth are fundamentally at odds with the target of inclusiveness, which further makes the situation complex. In many real life cases, inclusiveness carries much less weight than economic growth itself, and sometimes sacrificed thoroughly.

References

{{Reflist Economic growth

Barriers

See also

References