Quality of Economic Growth

8/9/2019 Quality of Economic Growth

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Growth is Dead. Long Live Growth! The quality of growth and why it matters

Key messagesLawrence Haddad

AfD- "A- D#


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Growth

Growth is Dead as an end in itself

Long Live Growth that drives develo$ment outcomes wecare a%out


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&e need growth that.. Lessens environmental tradeo's (romotes equity and inclusiveness

Does the $rior two things and is lesssusce$ti%le to shoc)s


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Key messages *+, Growth as measured

%y G ( $er ca$ita im$roves some things

we care a%out %utcould do much more

*e.g. $overtymalnutrition, Has mi/ed e'ects on

other things *e.g.em$loyment,

Has many negativee'ects on some thingswe care a%out *e.g.climate change,


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Key messages *0,

1easuring develo$ment %y G (2ca$ita willnot %e easy to re$lace &e are used to ignoring G (2ca$ita3s $ro%lems There are strong vested interests in $reserving it

t is easily understood %y $u%lic There is no consensus alternative yet


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6ut does G (2ca$ita actually need

re$lacing7 8es. 9ocusing on it will

mean:

we will not reduce $overtyquic)ly enough we will not reduce

undernutrition quic)lyenough

some ty$es of em$loymentare %y$assed

the growth in environmental;%ads< will not slow


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(overty$ro=ections and

growth

Highinequality

Lowinequality

Headcount$overtyratio

(oor trends: The $ace of $overty reduction after the 1illennium Develo$mentAgenda.


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1alnutrition 5eduction1ore res$onsive to increases in

nclusive wealth inde/ * & , than GD(

Haddad 1asset and #mith 0?+@


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m$loyment: growth drives quantity%ut not necessarily quality

9i/ed e'ectsestimates s economicgrowthassociated

with7Bnem$loyment*n countriesC++4,

m$loyment innformal sector

*n countriesC4@,

not sig.

ulnera%ility ofBnem$loymentE*n countriesCF ,

not sig.

E self em$loyment withoutem$loyees and those contri%utingto family la%our#tructural Transformation and the uality of Growth and

m$loyment.Iavier "irera.


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Growth "ar%on and (overty*&illen%oc)el review $a$er,

;Grow now decar%onise later.< ot the wayto go.

1itigation is chea$er in low income countries Avoid loc) in of high car%on growth 5emove worry of future im$ort %arriers on high

" $roducts 6BT requires investment from high income

countries in ca$ital s)ills and governance in lowincome countries

"an low car%on growth %e$overty reducing7

(ossi%le although notinevita%le A modeling: ?.J increase

in " 0 emissions of universal%asic energy access %y 0?4?over %aseline of of +.0 %illion


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(olicy m$lications *+, (olicyma)ers need to %ecome

more discerning a%out growth. Allcountries need to lead the way

Growth is not an end. Growth is not a means to an end. Growth is sometimes a mean to some

ends.

m$roving the quality of growth

means increasing the li)elihood thatgrowth $romotes more of the thingswe care a%out.


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(olicy m$lications *0, "hoices can %e made to ma)e

it more li)ely we get thegrowth we want e.g.

5educe inequality and strengthenenvironmental resilience via$roductive social $rotection

nvest in the Mrst +??? days oflife to %rea) the cycle ofintergenerational $overty

9or highly agricultural economicsinvest in agriculture to hasten thedemogra$hic transition neededto rea$ a demogra$hic dividend

Ta)e the governance of growth

seriously


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(olicy m$lications *4, "hoices can %e made to ma)e

it more li)ely we get thegrowth we want e.g.

ntroduce ta/ and investmentincentives to $romote innovationsthat minimise environmentaltradeo's

nvest in ca$ital s)illsgovernance in areas that can

ta)e advantage of solar andhydro $ower Develo$ new measures of growth

ones that includes quality as wellas quantity: the #DGs are )eyhere


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Quality of Economic Growth