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Shaping policy for development

An overview of Lagoro IDP camp in Kitgum District, northern Uganda, 20 May 2007. Manoocher Deghati/IRIN
Thu, 07/25/2013 - 16:32 -- Anonymous (not verified)

Building a fair future: why equity matters

24 November 2009
Kate Bird
Equity is a universal concern. The UK media has articulated a widely felt rage about bankers' bonuses and MPs expenses as recession increases hardship and unemployment. Child poverty, social exclusion and growing income inequality and other examples of inequity may also grab the headlines.

But how important is addressing inequity, compared to other pressing development issues: climate change, economic crisis, achieving the Millennium Development Goals (MDGs), supporting fragile states, improving governance, protecting human rights and so on? There are many policy priorities and governments do not have the capacity or resources to do everything at once. However, a recent meeting at ODI explained why building equity should be a priority and recent work by ODI has laid out the arguments for equity, both intrinsic and instrumental.

The intrinsic argument in favour of equity says that equity or fairness is important in and of itself. The idea of equity comes from theories of distributive justice or ‘social justice'. This looks at what things people get, and why they get them. It suggests that people share a common human dignity, and as such should be treated as equals, with equal concern and respect. This matters for policy because citizens can hold the state responsible for ensuring that all citizens are treated as equals and for influencing how things are distributed.

Genuine equity would mean that everyone would have equal life chances, and they would be rewarded on the basis of merit. Your gender, where you are born or the colour of your skin would not affect your quality of life or your access to opportunities. Goods and resources (e.g. access to health care) would be allocated according to need, rather than power.

Instrumental arguments for equity highlight the importance of equity for the social contract between citizens and state. Inequity has a negative effect on every part of society. It erodes trust and community life and is linked to poorly functioning institutions (including markets and the institutions of governance and law and order), and to higher levels of violence, insecurity and conflict, drug abuse and crime. It is linked to polarisation – with some very rich people, lots of poor people but few people in the middle. Having a functioning middle class is important – it is associated with a higher tax base, sustained economic growth – but also with more education, better health, better infrastructure, better economic policies, and less political instability, civil war and ethnic tension .

Inequality distorts political decision-making, budgetary allocations and patterns of public investment, as powerful vested interests are less likely to be held to account. Analysis also suggests that inequality helped to create the conditions that triggered the global financial crisis.

Inequity leads to a poor investment climate, low labour productivity and lower levels of economic growth than might be seen in a more equitable society. So, fairness is good for growth! 

Policy implications

To deliver policies that support equity, policy makers need to be convinced that inequality, poverty and inequity are big problems, that tackling them cannot be delayed, that there are proven policy instruments and that funds are available. This is a big ask, but it is possible because we know enough about what works to be able to tackle inequities now.

Policy makers want to be convinced that they are spending money wisely. What policies and programmes work? The truth is that there is evidence of success from around the world but change is often slow and, without concerted effort, there can be set-backs. The structures of economies and societies and the institutions that link us economically, politically and socially tend to favour the rich and powerful, so in the absence of ‘countervailing measures', inequality and unfairness will grow.

Very often in discussions on how to build greater equity, the only policy instruments and interventions on the table are different forms of social protection. Interestingly for me, all suggestions that inequality can be reduced by building better institutions, improving market integration, improving the equity of inheritance practice, building the asset holdings of poor people and increasing their agency through improved human capital formation and migration opportunities tend to be discounted – highlighting perhaps a schism between development professionals focusing on social and economic development. I am sometimes in a small minority arguing that social protection will only be effective in creating a long-term and sustained exit from poverty if coupled with the kinds of investments (beyond social protection and the social sector) which provide people with realistic opportunities and livelihood options. This is sometimes seen as ‘too complicated' and too much like ‘all development' to create the basis for effective lobbying.

In my view, a push for progressive change requires the building of a constituency:

  • To level the playing field so that everyone has access to the same opportunities
  • To provide a basic minimum of income/ goods/ services to everyone
  • To increase funds and commitment for redistribution

That will require a coming together of social and economic development thinkers. Could you contribute to this constituency?

This post features the author's personal view and does not represent the view of ODI.

Growth, Poverty and Inequality