Inclusive growth is economic growth that raises standards of livings for broad swaths of a population. 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 (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy An economy is an area of the production, distributio ...

and

microeconomic Microeconomics is a branch of mainstream economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics foc ...

determinants of the economy and economic growth. The microeconomic dimension captures the importance of

structural transformation A structure is an arrangement and organization of interrelated elements in a material object or system, or the object or system so organized. Material structures include man-made objects such as buildings and machines and natural objects such as ...

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, ind ...

, while the macro dimension refers to changes in economic aggregates such as the country’s gross national product (GNP) or

gross domestic product Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...

(GDP), total factor productivity, and

aggregate Aggregate or aggregates may refer to: Computing and mathematics * collection of objects that are bound together by a root entity, otherwise known as an aggregate root. The aggregate root guarantees the consistency of changes being made within the ...

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 which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...

, which is a major problem in

developing countries A developing country is a sovereign state with a lesser developed Industrial sector, industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is al ...

. Nonetheless, an emphasis on inclusiveness—especially on equality of opportunity 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.Elena Ianchovichina and Susanna Lundstrom, 2009
"Inclusive growth analytics: Framework and application"
Policy Research Working Paper Series 4851, The World Bank.

References

{{Reflist Economic growth

See also

References