Development must be inclusive and led by strong institutions


Desarrollo Inclusivo

Development of a country is a process, not just an end. To be successful this process must involve economic as well as political, social and environmental dimensions, combining State, market and society. In this respect Professor José Antonio Ocampo (2012) shares the following: “Trying to move forward without the State leads to unstable or unfair results. Trying to suppress markets leads to serious inefficiencies and loss of momentum. And trying to ignore social actors that play an essential role in national and local levels, impede the necessary legitimacy for successful policy formulation.” Similarly, this process must be regulated and led by strong and inclusive political and economic institutions.

The goal of development should be to improve quality of life and welfare of members of society to a level where everyone can enjoy and exercise their human rights and freedoms, sustainably. In this sense, I share the vision of development as freedom of Amartya Sen (2000), who says that “expanding the freedoms that we have reason to value not only makes our lives richer and more unfettered, but also allows us to be fuller social personas, exercising our own will and interacting with – and influencing – the world in which we live.” In this view, freedom involves both the processes that allow freedom of actions and decisions, and the real opportunities that people have. Sen argues that success of society should be evaluated primarily by the freedoms that its members enjoy and suggests working on five areas: social opportunities (e.g. education, health), protective security (e.g. insurance against starvation and death, social safety net), economic facilities, political freedoms, and transparency guarantees. (Sen, op. cit.)

Thus an “inclusive” development  is one which makes that fruits of this process and institutions that regulate it are translated into rights guaranteed and liberties exercised by all members of society, including minorities and the most vulnerable, and not only by political elites, economic elites or dominant ethnicities.

Inclusive institutions for inclusive development

Naciones Unidas

Strong and inclusive institutions are key to a development that benefits all. The reasons are widely exposed by Professors Acemoglu and Robinson in their latest book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty” (2012). I recommend it!

Institutions are the set of mechanisms and rules (e.g.: constitution, codes, laws, presidential decrees and local ordinances), entities (private, public,  national, sub-national or international) and customs considered important for a society and that give order to the behavior of its members (Wikipedia, 2013). These can be classified into political and economic institutions, among others.

On the one hand, political institutions determine who has power in society, for what purposes and how it can be used. If share of power is restricted to a few and is unlimited, this means political institutions are absolutist and similar to those of states governed by kings and military dictators. If political institutions are inclusive, they allow different people, with different interests and objectives, to influence and make decisions on how to structure society. (Acemoglu and Robinson, 2012)

On the other hand, inclusive economic institutions provide and ensure that economic opportunities and property rights not only reach the elite, but the majority. The opposite of these are extractive economic institutions. They are called that way because they “aim to extract income and wealth of a subset of society to benefit a different subset.” (Acemoglu and Robinson, op. Cit.)

As you may guess, different types of institutions are interrelated. Generally when absolutist political institutions dominate, those in power often set up extractive economic institutions to enrich themselves and increase their power at the expense of society.

Therefore, it is key to work towards strengthening inclusive institutions that share power widely, that limit its arbitrary exercise, and that involve the majority in economic progress. In general, which foster a development process that is comprehensive and inclusive.

Equality of income versus equality of access to public goods, oportunities, and rights

Desigualdad

The debate and indicators on inequality and exclusion have traditionally focused on inequality of income distribution among members of society. One indicator of inequality, widely referenced, is the Gini index. This index has a range from 0 to 100 that measures the extent to which distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. Thus a Gini index of zero represents perfect equality, while an index of 100 indicates perfect inequality (World Bank, 2013). Colombia registered a Gini of 0.56 in 2010 (DANE, 2012). When compared with other countries, this is a high Gini that represents a very unequal society (about this topic check my post “The fundamental challenge of ending poverty.”)

However, to improve people’s quality of life it is more effective to depart from an agreement on human rights and freedoms that must be guaranteed and focus goals, resources and actions on improving coverage and quality of public goods to do so. Public goods include services such as education, health, justice, security, transportation, unemployment, and retirement social insurance, and public physical infrastructure like roads, parks and bike paths, among others.

Aspiring to all people earning the same may be unrealistic given that not all people have the same values, skills or desires of profession, enterprise or time commitment to work; or that not all sectors of the economy have the same structure, competitive rivalry and profitability. Therefore, instead of aspiring to everyone having the same revenue level or that society reaches a Gini index close to zero, it is better to strive for everyone being able to pay with the fruits of their work or being able to have free access to goods and services provided by the State to guarantee their rights.

In other words, instead of aspiring to all of us earning several million a month, it is preferable to aim at all people (regardless of who earns a minimum salary or not) can walk safely down the street; have access to justice quickly when having conflicts with others; are cared by skilled health personnel when needed in a way that is warm, timely, and high quality; can be transported to where they want conveniently; have access to adequate housing; have access to primary, secondary and higher education of high quality for them and their children; can relax and enjoy their free time in nearby parks; or may have insurance or subsidy in situations where they lose their revenue generation or subsistence means such as in unemployment, old age or during the first months of parenthood.

Bernardo Toro from the Colombian foundation “Avina” expressed this point well in a recent interview with the Colombian magazine Semana (2013): “Equity does not depend on money, but on the amount and quality of public goods that society has, and one of our problems is that there are not enough public goods in Colombia. Most of them are in hands of corporations.” Likewise, Secretary General of the United Nations, Ban Ki-moon, during the Day of Social Justice in 2011 reminded us all that the multilateral system should work in the same line of policy – called the “Social Protection Floor”- to promote a very clear goal: “no one should live below a certain income level, and everyone should have access to essential public services such as water and sanitation, health and education.” (ILO, 2011)

Although programs targeting the poor and vulnerable may be useful complements to universal policies (i.e. those reaching 100% of the population), these should never be their substitutes. It is clear that resources are scarce and we must agree on the scope and begin with a “Social Protection Floor.” The report of the Advisory Group chaired by former Chilean President Michelle Bachelet and convened by the International Labor Organization (ILO) in collaboration with the World Health Organization – WHO (2011, op. Cit. ) provides a good starting point and description of the scope of this “Social Protection Floor.”  However, the goal should be to move towards universal guarantee of rights and human liberties.

The rights and liberties we should strive to guarantee

And what are the main conventions on rights of people that must be guaranteed? Among others, there are two key ones: the Universal Declaration of Human Rights (1948) and, at a national level, the Constitution of Colombia (1991). Here is a summary of the main rights that they establish, discriminating their respective articles if you want to read them:

Rights category The Universal Declaration of Human Rights (1948) Colombia’s National Constitution (1991)
Equality in dignity and rights. No discrimination. Art 1, 2 Art 13
Life, liberty, security, and peace Art 3 Art 11, 12, 22, 28
No slavery, no torture, and no cruel trietment Art 4, 5 Art 17, 12
Equality before the law and access to justice Art 7, 8 Art 13, 116
No arbitrary detention Art 9 Art 30
Public and just hearing. Presumption of innocence. Art 10, 11 Art 29
No interference or attacks to privacy Art 12 Art 15
Freedom of movement and residence Art 13 Art 24
Asylum from persecution Art 14 Art 36
Nationality Art 15 Art 96
Family and fully consented marriage Art 16 Art 42
Property Art 17 Art 58, 60, 63, 64
Social security in case of loss of means of revenue or subsistence Art 22, 25 Art 46, 47 48
Labor and equality at work Art 23 Art 25, 53, 55, 56,
Special care during maternity and infancy Art 25 Art 44, 42, 45, 50
Health, welfare and medical assistance Art 25 Art 49, 50,
Food and feeding Art 25 Art 44
Clothing, shelter and housing Art 25 Art 51
Education and training Art 26 Art 27, 54, 67
Freedom of profession Art 26
Rest and leisure Art 24 Art 52,
Access to culture, the arts and scientific progress Art 27 Art 70, 71
Freedom of thought, conscience, religion, opinion and expression Art 18, 19 Art 16, 18, 19
Peaceful assembly and association Art 20 Art 38, 39
Community involvement and participation Art 29 Art 37
Political: request Art 23
Participation in Government Art 21 Art 40
Recognition as a person before the law Art 6 Art 14
Healthy environment Art 79, 80
Social order to guarantee human rights Art 28 Art 189

In conclusion, a robust development strategy should be based on human needs, focusing on protection of human rights and freedoms. In relation to goods and services that seek to guarantee them, it should propose goals and actions aimed at increasing coverage until achieving universality, the continuous improvement of their quality, and constant innovation. All this based on clear quality standards based on international best practices adapted to the national context.

In the same vein, development plans of Nations, their provinces or states, and their municipalities should propose goals and actions that reflect the construction of a social protection floor and gradual progress in the coverage and quality of public goods to achieve universal coverage. This means, towards the guarantee of rights and freedoms of everyone.

References

1. Ocampo, José Antonio (2012). “Candidate for World Bank president talks about the challenges of the position.” Colombian newspaper EL TIEMPO. Colombia, April 6, 2012. [http://www.eltiempo.com/economia/negocios/jose-antonio-ocampo-dice-hac_11513821-4]

2. Sen, Amartya (2000). “Development as Freedom.” Editorial Planeta.

3. Wikipedia (2013). “Institution.” [http://es.wikipedia.org/wiki/Instituci% C3% B3n]

4. Daron Acemoglu and James A. Robinson (2012). “Why do countries fail: the origins of power, prosperity and poverty.” Deusto, Grupo Planeta.

5. World Bank. World Development Indicators. “GINI index.” [http://data.worldbank.org/indicator/SI.POV.GINI]

6. Colombian Administrative Department of Statistics – DANE (2012). Technical seminar on new methodology for measuring monetary poverty in Colombia. “Recent Results: Monetary Poverty in Colombia from 2002 to 2010.” Bogota, March 14, 2012.

7. Toro, Bernardo (2013). Interview “The Sins of the Business Elite.” Colombian magazine SEMANA. [http://www.semana.com/100-empresas/articulo/los-pecados-elite-empresarial/342799-3]

8. International Labour Organization, ILO (2011). “Social protection floor for a fair and inclusive globalization.” Report of the Advisory Group chaired by Michelle Bachelet convened by the ILO in collaboration with WHO. Geneva – Switzerland, 2011.

9. United Nations (1948). “Universal Declaration of Human Rights.” [http://www.un.org/es/documents/udhr/]

10. Secretary of the Senate of the Republic of Colombia (1991). “Constitution of Colombia.” [http://www.secretariasenado.gov.co/senado/basedoc/cp/constitucion_politica_1991.html]

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