Inclusive growth: meaningful goal or mirage?
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The purpose of this chapter is to review some of the main arguments surrounding the challenges of poverty, inequality and economic development. I consider different perspectives on the relationship between growth and inequality and discuss the merits of two orthodox policy responses - social protection and welfare-to-work. Despite the different circumstances of the North and the South, I suggest there are some common guiding principles for a more effective and dynamic approach. The author argues that inclusive growth is a meaningful goal rather than a mirage, although it requires clearer specification and cannot be achieved without active state involvement in market mechanisms, which tend towards unequal and uneven outcomes. Rewarding employment is the most important pragmatic route to shared prosperity, and requires governments to perform different functions at different levels. Local and regional development has a vital role to play, complemented by national policies that redistribute resources and regulate markets.
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