Abstract
Inclusive economic growth challenges governments to achieve a high, sustainable rate of economic growth and to share opportunity equitably across society. It brings with it an operational challenge of finding an approach to performance measurement that captures the richness of the concept. This study applies one approach to assess the growth experience of 22 developing economies in Asia and the Pacific region. Special attention is paid to 11 economies — Armenia, Bangladesh, Cambodia, India, Indonesia, Kazakhstan, Nepal, Pakistan, the Philippines, Timor-Leste, and Viet Nam. It is found that growth in these 11 economies, which collectively account for about half of the region’s population, has become more inclusive. Access to opportunity is generally on the rise and inequality in opportunity is generally in decline. There is nonetheless considerable room for further gains, particularly in the South and Southeast Asian economies studied, where inequality in opportunity is high. Inequality in opportunity is generally lower in the Central Asian and Pacific economies studied. In the Pacific Island economies studied, the key challenge is to achieve a high, sustainable rate of economic growth.
Highlights
The Asian Development Bank’s (ADB) Strategy 2020 identifies the achievement of inclusive economic growth as one of three development agendas for the Asia and Pacific region (ADB, 2008)
Because inclusive economic growth has two aims—expanding aggregate opportunity and improving the distribution of opportunity—assessing whether it has been achieved requires a view on the relative importance of the two aims
This study focuses on variables that can be considered proxies for opportunity—i.e., opportunity indicators—that are determined by circumstance and policy
Summary
The Asian Development Bank’s (ADB) Strategy 2020 identifies the achievement of inclusive economic growth as one of three development agendas for the Asia and Pacific region (ADB, 2008). Because inclusive economic growth has two aims—expanding aggregate opportunity and improving the distribution of opportunity—assessing whether it has been achieved requires a view on the relative importance of the two aims It requires a view on the weighting attached to different members of society, such as an egalitarian weighting or one that gives more weight to the disadvantaged. This study assesses whether growth has been inclusive in Asia and the Pacific by preparing a distribution weighted measure of opportunity. This is the simple average of an opportunity indicator adjusted for the inequality in its distribution.
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