Equitable economic growth does little to combat poverty: WDR

The latest World Development Report (WDR) has argued that the most effective policies for promoting long-term growth are more about facilitating geographical concentration and economic concentration, both within and across countries.

The WDR 2009: Reshaping Economic Geography, which was released on Monday, also negated the logic that economic growth should be equitable within countries.

“Trying to spread economic growth does little to combat poverty. So, for rapid shared growth, governments must promote economic integration which, at its core, is about the mobility of people, products, and ideas,” states the report.

It is governments that should appreciate that market forces promote economic concentration and social governance, according to the report.

“The world’s most geographically disadvantaged people know all too well that growth does not come to every place at once,” said Indermit S Gill, Director of the World Development Report (WDR) and World Bank Chief Economist, Europe and Central Asia.

“Throughout history, mobility has helped people escape the tyranny of poor geography or poor governance, further said Gill.

Integration should be the pivotal concept in policy discussions involving the location of production, people and poverty—in particular, the debates on urbanization, regional development and globalization, said the report and added that instead, all three overemphasize place-based interventions.

“The ideas that the report bring to the table are highly relevant to the transitions that Nepal is currently undertaking,” said Susan Goldmark, the World Bank Country Director for Nepal.

The WDR reframes the policy debates to include all the instruments of integration—common institutions, connective infrastructure and targeted interventions. By common institutions, the report means regulations affecting land, labor and commerce, and social services such as education and health financed through taxes and transfers.

”Infrastructure refers to roads, railways, ports, airports and communications systems. Interventions include slum clearance programs, special tax incentives to firms, and preferential trade access for poor countries,” said Rameshwor Prasad Khanal, secretary at the finance ministry.

The report launching was co-hosted by the World Bank Nepal Office and Management Association of Nepal (MAN). nepalnews Mar 17 09