Inclusive Growth has become a central idea in development. The IPC has published a series of publications aimed at defining and measuring Inclusive Growth, contributing to the debate surrounding the topic. Based on an equality principle, Inclusive Growth comprises both outcomes and processes, involving participation and benefit-sharing.
The concept of Inclusive Growth must be traced back to post World War II development theories, when it was thought that development followed a pre-determined path. The idea was that income growth not only produced but also needed inequality, which would eventually decline as economies grew. After this theory was challenged by countries where growth produced more inequality, the idea that poverty, and most importantly inequality, constrained growth gave way to the emergence of an understanding that equity can and should be a part of the growth process, as reducing inequality can contribute to both reducing and making growth more sustainable.
While growth still remains the most important component of any poverty reduction attempt, redistributive growth is more likely to be effective than distribution-neutral growth. In this context, a growing concern shifted to ensuring that poor people actually benefited from growth. Pro-poor growth, however, is understood in different ways ranging from growth that improves the conditions of the poor to growth where the poor benefit more than the rich; or even from the creation of policies to benefit the poor to ones that stress the importance of adding non-income dimensions to policies, as poverty is a multidimensional phenomenon.
Although Inclusive Growth can oftentimes be interchangeable with definitions of pro-poor growth, it is actually a broader concept. Inclusive growth allows opportunities for everyone to participate in the growth process while making sure that benefits are shared. Given that the poor face challenges that impair their conditions and limit their opportunities, to be inclusive, growth should benefit everyone while reducing the disadvantages faced by the poor, both in terms of benefits enjoyed and, especially, in terms of access to opportunities for participation.
The above is based on the Working Paper Inclusive Growth: Building up a Concept by Rafael Ranieri and Raquel Almeida Ramos.
The following IPC-IG publications are further resources on Inclusive Growth:
After All, What is Inclusive Growth?
How Inclusive Has Growth Been in the Last Decade?
Mapping Inclusive Growth
What is Inclusive Growth? An Alternative Perspective
South-South Cooperation and Inclusive Growth
Can Social Protection Help Promote Inclusive Growth?
Exploring and Strengthening the Intersections between Social Protection, Employment and Inclusive Growth