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Foreword
- Preface - Acknowledgements - Contents
Combating Poverty and Inequality is an important contribution
to efforts to systematically explain how poverty
reduction depends crucially on the interconnections
among economic development, social policy and politics.
The report reveals how poverty and inequality cannot be
addressed by narrow approaches to social protection, or
faith in the by-now-discredited notion that the benefi ts of
economic growth will suffi ciently trickle down to the poor.
The analysis points instead to the need for new directions
in macroeconomic policy and structural change to generate
decent employment. It also stresses that processes of
policy and institutional change should be democratically
anchored and shaped by active citizenship.
OVERVIEW: Combating Poverty and Inequality: Structural Change,
Social Policy and Politics
SECTION ONE: SOCIALLY INCLUSIVE STRUCTURAL CHANGE
CHAPTER 1: Towards Employment-Centred Structural Change
1. Structural Change in a Globalized World
The traditional pattern of structural change may not apply in
a globalised world
2. Emerging Trends in Employment
Household incomes are affected by the dynamics of global
labour supply
3. How Different Patterns of Development Affect Employment
East Asian states have followed the classic manufacturing
growth path
The dualism of many middle-income countries exacerbates
inequalities
Can service-led development be an alternative to
industrialization?
Low-income countries remain heavily agrarian
Without careful management, mineral wealth can be a mixed
blessing
4. The Links between Employment and Poverty
The working poor poverty rate is one indication of how
employment affects poverty
5. Putting Employment Back on the Agenda: Implications for
Policy
Improve employment opportunities
Transform the structure of employment to make sustained
inroads against poverty
CHAPTER 2:
Income Inequality and Structural Change
1. Income Equality and Poverty Reduction
High levels of inequality inhibit development
2. Global Trends in Inequality
The global income gap remains daunting
Income inequality has increased in the majority of countries
around the world
The gap is growing between wage earners and those who derive
their income from profits
3. Inequality, Structural Change and Global Intersectoral
Terms of Trade
Early development thinking held that inequality rose in the
early stages of development, and then declined
Global intersectoral terms of trade are a key determinant of
inequality
Most low-income agrarian economies are highly unequal
Global forces now shape the movement of inequality within
countries
How structural change and global forces affect inequality:
Country examples
4. Redistributing Wealth and Income: Implications for Policy
Make deliberate policy choices to ensure that growth and
equity reinforce one another
Strengthen the role of the state in fiscal redistribution
Refocus on land reform
Look after the best interests of small farmers
Advocate for reforms in the governance of the global economy
CHAPTER 3: Tackling Ethnic and Regional Inequalities
1. Ethnic and Spatial Inequalities and Development
Many factors contribute to spatial inequalities
Regional inequalities typically increase in early stages of
development, and later even out
Ethnic inequalities are often rooted in historical
circumstances
2. Ethnic and Spatial Inequalities and Structural Change
How inequalities have evolved in agrarian and industrializing
economies
3. Addressing Ethnic and Regional Inequalities: Implications
for Policy
Affirmative action is best pursued as part of a larger
framework
Universal programmes may not be enough
Political and cultural inclusivity is key to action for
disadvantaged groups
CHAPTER 4: Gender Inequalities at Home and in the Market
1. Women’s Work and Income in Advanced Industrialized
Economies
Women’s participation in the labour market is growing, but
gender gaps in wages and work conditions persist
State transfers help narrow the poverty gap between men and
women
Pooling income within households can ease women’s poverty
but create dependency
2. Poverty, Work and Gender in a Development Context
Women are disproportionately affected by the rise in informal
employment
The informal economy is stratified by gender and other social
identities
Social norms and power relations affect women’s access to
paid work and control over earnings
Gender inequality in labour markets is persistent across
diverse development paths
3. Gender, Poverty and the Role of Household Structures
Income pooling is not sufficient to close gender-based
poverty gaps in the Republic of Korea
Income pooling effects in Brazil and South Africa vary
according to household structures
In India, women’s employment is often induced by distress,
in contrast to Kenya
4. The Role of the State in Addressing Gender Inequality and
Poverty: Implications for Policy
Protect informal workers through state regulation
Promote social protection, but not as a substitute for decent
employment
Increase women’s access to land, microcredit and other
productive assets
Institute policies that support women’s long-term economic
security
SECTION TWO: TRANSFORMATIVE SOCIAL POLICY AND POVERTY
REDUCTION
CHAPTER 5: Towards Universal Social Protection
1. The Case for Universal Social Protection
Neoliberal approaches to social protection fail to deliver on
several counts
The benefits of narrowly targeting social assistance are
questionable
Universal social protection demands a strong state role
Universal programmes offer greater benefits
Universal social protection can enhance economic progress
Universal social protection reduces poverty and inequality
2. Changing Patterns of Social Protection
Various routes to universal social protection exist
3. Instituting Universal Social Protection: Implications for
Policy
Where poverty is widespread, social protection programmes
should promote sustainable livelihoods and redistribution
A rights-based approach to social protection should seek to
limit conditionality and
targeting
Social assistance should be complemented by policies that
promote redistribution and decent work
CHAPTER 6: Universal Provision of Social Services
1. The Case for Universal and Public Provision
Universal access to social services promotes growth and social
development
The state plays a critical role in social provision
Recent policy trends have weakened universalist principles
2. Social Services in Developing Countries: Trends and
Outcomes
Social service policies have shifted dramatically over the
last half century
Neoliberal shifts since the 1980s have produced a trend
towards commercialization
Underfunding and commercialization can have negative
consequences for health and education
3. Social Service Provision in Different Development Contexts
Countries vary widely in their systems of social service
provision
4. Providing Universal Social Services: Implications for
Policy
Publicly financed systems can be affordable
Effective commercialization requires regulation
CHAPTER 7: Care and Well-Being in a Development Context
1. Care in Context: Institutional Arrangements and Enabling
Policies
Diverse institutions have a hand in care giving
An enabling environment can ease the burden of care
Specific care policies can also lighten the load
Economic development can squeeze women’s care giving time
2. Unpaid Care in Households, Families and Communities
Women’s time spent on unpaid care is higher than men’s
everywhere
Women spend more time on paid and unpaid care combined than
men
Several factors affect the amount of unpaid care work
performed by both sexes
3. Care Arrangements across Countries
How care policies affect outcomes
4. Putting Care on the Agenda: Implications for Policy
Invest in infrastructure and basic social services
Ensure an adequate and reliable source of income
Create synergies between social transfers and social services
Build on existing programmes to cover care needs
Recognize care workers and guarantee their rights
Make care work more visible
CHAPTER 8: Financing Social Policy
1. Spending on Social Policy
Social spending reflects both national incomes and policy
choices
The global context influences the financing of social policy
2. Revenue Sources and Their Impact on Development
Different financing instruments affect redistribution and
reproduction in different ways
Different financing instruments affect production and
protection in different ways
3. Mobilizing Resources for Social Policy
Designing equitable and efficient tax systems is key to
development
Extension of social insurance schemes is a challenge for
developing countries
A wealth of mineral resources does not necessarily enrich
people
Aid can contribute to social development and international
justice
Remittances are a financing source for development and
household welfare
4. Financing Social Development: Implications for Policy
Create financing mechanisms that are sustainable, equitable
and conducive to economic development
Consider the political and macroeconomic effects of various
types of financing
Anchor a country’s social policy system with domestic
sources of financing
SECTION THREE: THE POLITICS OF POVERTY REDUCTION
CHAPTER 9: Business, Power and Poverty Reduction
1. The Rhetoric and Reality of Corporate Responsibility
The social agenda of business is expanding
Assessments of CSR reveal major shortcomings
CSR varies by region, industry and firm
Attention should refocus on corporate accountability
2. Changes and Variations in State-Business Relations
Globalization and liberalization have profoundly altered power
relations
The influence of business varies by industry and policy
regime
3. How Social Pressure Can Affect Corporate Behavour
Labour movements are showing signs of revival
Activism is becoming more cohesive
The nature of social activism varies by policy regime
4. Business Preferences Relating to Social and Labour Market
Policy
Business preferences have changed under globalization
5. The Potential and Limits of Collaborative Institutions
Social dialogue and bargaining help drive corporate change
Broad-based business associations can be forces for inclusive
development
6. Towards Corporate Accountability: Implications for Policy
Create an enabling environment for collective action
Forge social pacts between business and government
Promote international norms and laws that regulate TNCs
Bring states back into the development equation
CHAPTER 10:
Building State Capacity for Poverty Reduction
1. Dimensions of State Capacity That Promote Development
Political capacity is fundamental to setting and implementing
policy
The capacity to mobilize resources is key to achieving
development goals
The capacity to put resources to effective use is the core of
state power
2. Market-Enhancing Institutional Reforms
The link between good governance and growth is weak
Market-enhancing managerial reforms were part of a second wave
of reforms
Progress in decentralization is uneven
3. Building State Capacity for Structural Change and Poverty
Reduction: Implications for Policy
Forge political settlements for redistribution
Improve domestic resource mobilization and encourage citizen
involvement in the
allocation and monitoring of resources
Tackle the three dimensions of state capacity directly rather
than rely on good governance reforms to improve delivery of services
Create the foundations of a Weberian bureaucracy to improve
service delivery for the poor
Improve the quality of decentralization by involving
low-income groups in local
decision-making processes
CHAPTER 11:
Democracy and the Politics of Poverty Reduction
1. Democracy and Redistribution
Democracy tends to produce redistributive outcomes, but is
subject to group influences
2. External Constraints to Pursuing Redistributive Policies
Government capture by technocrats insulates decisions from the
will of the people
Aid conditionality limits the policy options of governments
3. Domestic Constraints to Pursuing Redistributive Policies
4. When Democracies Deliver Outcomes That Are Beneficial to
the Poor
In high-income democracies, organized interest groups spurred
redistribution
In welfare democracies in the South, subaltern groups were the
main catalysts for change
In dualist countries leaning towards welfare democracy, social
pacts have been key
Gains are possible, even if interest groups lack ties to power
In countries with weak civil societies, electoral competition
can bring leaders to account
5. The Politics of Poverty Reduction: Implications for Policy
Abandon technocratic styles of policy making
Go beyond NGO–centred PRSP forums and more actively engage
associations and social movements
Institutionalize rights to encourage effective group
participation in policy making
Support organizations that represent the views of diverse
groups that include the participation of formal and informal workers
Recognize the fact that not all groups can be incorporated
into bargaining regimes
Empower the general population to exercise influence on how
polices are made
CONCLUDING REMARKS
and Background Papers: Coordinating Social, Economic and
Political Forces to Deliver for the Poor
Reducing poverty and inequality is not just about having
the right economic policies; it is also about pursuing appropriate
social policies and types of politics that elevate the
interests of the poor in public policy. The analysis in the
various chapters of this report points to the importance
of understanding the ways in which institutions and policies
are interconnected in different spheres of the political
economy. It suggests that efforts to tackle poverty through
discrete and standardized policies unrelated to a country’s
production and macroeconomic systems, social policies
and politics, are of limited impact, and may even be counterproductive.
Policies and institutions in the economic,
social and political spheres need to be consciously coordinated
to achieve maximum impact.
References
and Acronyms - List of Boxes, Figures and Tables
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