Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Pro-Poor Strategies - International Political Economy

Working team: Marirosa Rina, Maria Ricigliano, Paola Bocchino, Matteo Moretti e Anita Zizzari.
by

Anita Zizzari

on 19 May 2014

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Pro-Poor Strategies - International Political Economy

PRO-POOR STRATEGIES
Life beyond the Washington Consensus: An Introduction to Pro-poor Macroeconomic Policies
Growth, Poverty and Inequality: From Washington Consensus to inclusive Growth
Sources
Life beyond the Washington Consensus:
An Introduction to Pro-poor Macroeconomic Policies
(10/2007), in
Review of Political Economy

(Routledge) - Alfredo Saad-Filho
A comparison among Washington Consensus, Post-Washington Consensus and Inclusive Growth
Growth, Poverty and Inequality:
From Washington Consensus to Inclusive Growth
(11/2010), in UN Department of Economic and Social Affairs working paper n. 100 - Alfredo Saad-Filho
The author
Alfredo Saad-Filho
Professor of Political Economy at the Department of Development Studies, SOAS, University of London

Structure
1. PRINCIPLES
2. INSTRUMENTS
3. PRO-POOR SOCIAL POLICY
4. FINDINGS AND IMPLICATIONS
Limitations
No investigation into the genesis of PPP
No assessment of the implementation of PPP
Aim
SUPPORT DIALOGUE BETWEEN HETERODOX ACADEMICS AND THE APPLIED ECONOMISTS
SATISFACTION

BASIC NEEDS MAJORITY OF POPULATION;
EQUITABLE
DISTRIBUTION
: INCOME, WEALTH AND POWER;
PRESERVATION OF MACROECONOMIC
STABILITY
.
Macroeconomic debates over time:
Late 1950s - early 1970s (
Kuznets - Solow
) Capitalist Economies as a solution to poverty issue.
Mid 1970s (
Keynesians - Monetarists
) Debate on STATE INTERVENTION and FREE MARKET.
Mid 1970s - late 1980s (
Washington Consensus, 1989 Williamson
)
TRICKLE-DOWN proposition.
1990s - early 2000s (
commitment to Millennium Development Goals
)
Failure of trickle-down strategy and emergence of PRO-POOR ALTERNATIVES.
Late 2000s (
Inclusive Growth
)
Mainstream propositions exploit the RHETORIC OF PPG DEBATES.
Policy principles and constraints
Policy Instruments
Growth and Investments

Policy Instruments
Employment and productivity
PRODUCTIVITY OF DEVELOPING COUNTRIES
1) MASS PRODUCTION FACILITIES
2) HIGH ROAD


ADVANTAGES OF HIGH ROAD
• New export
opportunities
in growth sectors
• Expand growth and
employment
in other areas of economy
• High standards of workplace
safety
and security

PRODUCTIVITY GROWTH AND BETTER WORKING CONDITIONS promoted by
LEGISLATION

Raising
the minimum
wage

Supporting
trade union
activity


Incentives
for firms

RAISING OF DOMESTIC LABOUR MARKET
PROMOTE
NON-TRADABLES SECTORS
(as small-scale agriculture, construction industry, repair workshops).

PUBLIC WORK PROGRAMMES
NEED TO EXPANDED IN MOST COUNTRIES

The external sector
STRATEGIES

PROMOTION OF EXPORTS
• Competitive and stable real exchange rate
• Expansion of the production of tradables and non-tradables sector

MANAGEMENT OF THE COUNTRY'S IMPORT RESTRICTIONS
"Open trade is more a result of development rather than a prerequisite for it"

(Vandemoortle , 2004)

REGULATION ON TRADE LIBERALIZATION
• Severe social and economic dislocations
• Construction of new growth industries



Trade liberalization could have
an especially
severe impact on the poor
The external sector
REGULATION OF THE CAPITAL AND FINANCIAL ACCOUNTS
have several consequences
accumulation of foreign debt;
facilities capital flight;

Country’s vulnerability to
balance of payments crisis
MONETARY POLICY AUTONOMY
PRO-POOR STRATEGIES REQUIRE THE STATE TO PROMOTE DIRECT INVESTMENTS AND OTHER RESOURCES FLOWS TO GROWTH-PROMOTING AND POVERTY-REDUCING OBJECTIVES.
CAPITAL CONTROLS AND FISCAL POLICIES


Fixed exchange rates
Adjustable pegs
Managed floating
Economic growth is insufficient for Pro-poor strategies

Growth
creates
wealth
as well as
poverty
Benefits
Dispossession, technological and environmental changes

Mainstream strategies failed to address inequality

Development strategies:
bolder and more expansionary
Sectors that directly benefit the poor
Promote investments

Virtuous circle of growth
State should identify the
key sectors to rapid growth
and poverty reduction
Targeted industrial policies
Public investments
Focused incentives
for the expansion of capacity and output



Fiscal policies and Public investment
Focus on
public sector
and
public investment

Pro-poor strategies should be funded by domestic sources
Tax revenues
Tax progressive system

The fiscal policy should be expansionary and not restrictive
Larger tax base
Higher tax rates
Modernized tax system

But
fiscal policies
should be
calibrated carefully
because
fully expansionary policies
(fiscal, monetary and exchange rate) could
cause
Unsustainable booms
Destabilization of economical and political system



Introduction
Social programs
Pro-poor strategies require
Specific policies and programmes
Protection of poor
Improve social welfare

Mainstream proposals
Trickle down
Targeted social programmes

POVERTY MANAGEMENT

What is needed is
POVERTY ELIMINATION
Targeted social programmes

Expensive
to run
Hidden costs of
eligibility
Miss
the target
Prone to
corruption
Arbitrary
allocation
Captured by "near-poor"
Social
stigma
UNIVERSAL PROGRAMMES

Provision of
public goods and services

Social wage
Education and training
Health
Water and sanitation
Food security
Transportation
Environment preservation
Affordable clothing
Food security
Parks and amenities
Universal programmes improve the standard of living of the poor directly

Meet
basic needs
Contribution to
equalization
of income distribution
Immediate
benefits
Contribution to people
productivity
Foundation of
long-term
economic expansion
Employment

Development
of deprived areas

Budget limitations

Use of
taxation
Domestic
funded
Foreign aid only exceptionally
Smart-targeting
Gradual provision of services or in selected regions

Contribution to the achievement of other pro-poor goals
Conclusions
Pro-poor rhetoric is hidden in Post-Washington Consensus and Inclusive Growth

Close
coordination
between
public
and
private
institution
Regulation
,
distribution
and allocation of resources
The State is a tool of collective action
Coordinating role of State
(no take over economy)

Arguments against
Countries are too poor to redistribute
Redistribution is always positive
Trade-off between growth and equity
Address growth with smart policies
Pro-poor strategies are difficult to implement
The main constraint is not economic but political
Matteo Moretti, Marirosa Rina, Paola Bocchino, Maria Ricigliano, Anita Zizzari
Three principles

1 -
Mass poverty
is the most important problem facing the developing countries, and its
elimination
should be their governments’ main
priority

2 -
Pro-poor growth must benefit the poor more than the rich
; growth is pro-poor when it
reduces relative as well as absolute poverty

3 - Improvements in
distribution
and
social welfare
should be pursued directly.
Mainstream

poverty is created by social exclusion
, it is the inability to reach the expenditure line of 1$ or 2$ a day.
market
posited as an
unproblematical
creator of wealth


This view is
misleading
because:
decontextualises poverty
obscures reproduction over time and across countries

Exclusion from market is not the cause but a consequence of poverty

Highly exploitative labour regimes
Markets can create poverty as well as wealth

Elimination of poverty requires structural social and economic reforms

The solution to problems of poverty and inequality is more political than economic

Traditionally, growth and equity are negatively correlated

Pro-Poor Strategies:
The
type of growth
is at least as important as the
rate of
economic
growth
,
Conventional parameters
(GDP growth, inflation control, high investment, low public debt…) as
instruments
for the elimination of mass poverty and improvement of human development.

Improvements:
Should
not
be marginal or conditional on
trickle-down
processes
Must be unambiguous across measures of welfare and distribution


Intervention of Public Policy

CONSTRAINTS
Macroeconomic
stability
includes
Rapid growth
Redistribution
Structural transformation of economy

How should the government achieve it?
CASE BY CASE

Mainstream
policies
FAILED

to trigger rapid economic growth
or sustained poverty reduction
12 African countries per capita GDP <1960s
(Milanovic, 2003)

Heavily Indebted Poor Countries Initiative (HIPC)
(HIPCS-1 and HIPCS-2)
Wedded to the same
failed
macroeconomic strategies attempted in the past
Insufficient
to address the severe problems associated with mass poverty
Poverty dimensions network
No cash transfers

Form of targeting inefficient and expensive
Idea that social welfare is purchased as private goods rather than an availability to all
Commodification of social life
Conflict with social solidarity
Source: Rodrik, 2006 - UNDESA working paper n. 100, 2010, p. 14
Source:
Promoting pro-poor growth. Key policy messages
, in
Promoting pro-poor growth: policy guidance for donors
, Organization for Economic Co-operation and Development (OECD), 2006.
Heavily indebted poor countries
Full transcript