The Unassuming Economist

In recent years, the IMF has put on its plate several issues that appear to go beyond its ‘bread and butter’ focus on fiscal and monetary policies. These issues include: employment & migration; gender; inequality; corruption; financial inclusion; climate change. Why has the institution done so? The answer is simple: they have become critical to the IMF’s mission. These issues directly affect economic performance and stability in many countries, and thus fall under the IMF’s mandate.

Is there a unifying framework for all these new issues? There is and it can be summarized in two words: Inclusive Growth. Both words are important. We do want growth. Understanding the sources of productivity and long-run growth, and which structural policies will deliver them, thus remains an important part of the IMF’s agenda. So when we talk about inclusive growth, we are not advocating as role models either the former Soviet Union or present day North Korea—those are examples of ‘inclusive misery,’ not inclusive growth.

We want growth but we also want to make sure:

•   that people have jobs – this is the basis for people to feel included in society and to have a sense of dignity. (IMF Management set up a “Jobs & Growth” working group to emphasize the importance of this work.)
•   that women and men have equal opportunities to participate in the economy—hence our focus on gender;
•   that the poor and the middle class share in the prosperity of a country—hence the work on inequality and shared prosperity;
•   that, as happens for instance when countries discover natural resources, wealth is not captured by a few—this is why we worry about corruption and governance
•   that there is financial inclusion—which makes a difference in investment, food security and health outcomes;
•   that growth is shared just not among this generation but with future generations— hence our work on building resilience to climate change and natural disasters.

In short, a common thread through all our initiatives is that they seek to promote inclusion. What we are after is strong growth but one that is broadly shared, where major segments of society feel they have had an opportunity to make a better life for themselves.