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Growth Is Dead, Long Live Growth the Quality of Economic Growth and Why It Matters

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The Quality of Economic Growth and Why it Matters it Why and Growth Economic of Quality The Growth Live Long Dead, is Growth JICA Research Institute January 2015 Nicolas Meisel Nicolas Kato Hiroshi Haddad Lawrence Growth is Dead, Long Live Growth The Quality of Economic Growth and Why it Matters JICA Research Institute Edited by Lawrence Haddad Hiroshi Kato Nicolas Meisel JICA Research Institute Growth is Dead, Long Live Growth The Quality of Economic Growth and Why it Matters Edited by Lawrence Haddad Hiroshi Kato Nicolas Meisel January 2015 Agence Française de Développement (AFD) Institute of Development Studies (IDS) Japan International Cooperation Agency (JICA) The views and opinions expressed in the articles contained in this volume do not necessarily represent the official views or positions of the organizations the authors work for or are affiliated with. Agence Française de Développement (AFD) http://www.afd.fr/lang/en/home Institute of Development Studies (IDS) http://www.ids.ac.uk/ Japan International Cooperation Agency (JICA) http://www.jica.go.jp/english/index.html Haddad, Lawrence, Hiroshi Kato and Nicolas Meisel. 2015. Growth is Dead, Long Live Growth: The Quality of Growth and Why it Matters. Tokyo: JICA Research Institute. Produced by JICA Research Institute http://jica-ri.jica.go.jp/index.html 10-5 Ichigaya Honmura-cho Shinjuku-ku Tokyo 162-8433, JAPAN TEL: +81-3-3269-3374 FAX: +81-3-3269-2054 Email: [email protected] Copyright ©2015 Agence Française de Développement (AFD), Institute of Development Studies (IDS), Japan International Cooperation Agency (JICA) All rights reserved. Growth is Dead, Long Live Growth The Quality of Economic Growth and Why it Matters Contents Foreword �������������������������������������������������������������������������������������������������������������������������������������������������������iii Preface �������������������������������������������������������������������������������������������������������������������������������������������������������������iv List of Contributors ������������������������������������������������������������������������������������������������������������������������������ v Introduction Growth is Dead, Long Live Growth The Quality of Economic Growth and Why It Matters ��������1 Lawrence Haddad, Hiroshi Kato and Nicolas Meisel Part I Growth: A Path towards Abundance or Depletion? Chapter 1 What is the Quality of Growth? Sustainability and Inclusiveness ������������������������������������������������������ 19 Michel Aglietta Part II The 20th Century Concept of Growth and Its Deliverables Chapter 2 Poor Trends: The Pace of Poverty Reduction after the Millennium Development Agenda �������������������������� 57 Richard Bluhm, Denis de Crombrugghe and Adam Szirmai Chapter 3 Chronic Poverty in Rural Cambodia: Quality of Growth for Whom? ��������������������������������������������������������������� 85 Ippei Tsuruga Chapter 4 Does the Quality of Income Growth Affect Child Nutrition Status? Lawrence Haddad, Edoardo Masset and Lisa Smith ���������������� 121 i Chapter 5 Disability and Growth Elasticity of Poverty in a Developing Country ����������������������������������������������������������������������� 137 Kamal Lamichhane and Damaru Ballabha Paudel Part III Different Growth, Different Outcomes in Sustainability, Inclusiveness, and Resilience Chapter 6 Reflections on the Prospects for Pro-Poor Low-Carbon Growth ���������������������������������������������������������������������������������������������������������������� 159 Dirk Willenbockel Chapter 7 Structural Transformation, the Quality of Growth and Employment Outcomes ������������������������������������������������������������������ 187 Xavier Cirera Chapter 8 The Elusive Quest for Inclusive Growth in Sub-Saharan Africa: Regional Challenges and Policy Options Bruno Losch ������������������������������������������������������������������������������������������������������� 217 Chapter 9 What are the Macroeconomic Impacts of Natural Disasters? - The Impacts of Natural Disasters on the Growth Rate of Gross Prefectural Domestic Product in Japan ����������������������������������������������������������������������������������������������������������������������� 243 Go Shimada Part IV Multiple Paths towards Quality Growth Chapter 10 Industrial Transformation and Quality of Growth ��������� 267 Akio Hosono Chapter 11 The Governance of Natural Resource Wealth: Some Political Economy Considerations on Enhancing Social Investment ���������������������������������������������������������������������������������������������������������� 301 Andrés Mejía Acosta Index �������������������������������������������������������������������������������������������������������������������������������������������������������������� 331 ii Foreword The three organisations behind this book—AFD, IDS, and JICA—have different roles and responsibilities when it comes to global development, but each has long advocated for a more nuanced debate on growth, emphasising, for example, its distributional consequences, its human development impacts, and its environmental effects. As we enter into the post 2015 development era, all of these features of growth are becoming ever more integrated, and gaining importance as decisive factors for realising sustainable development. We are delighted that the authors of this book have come together, supported by our respective institutions, to make a significant contribution to inform our debate on this subject. In the 21st century our decisions and policies will perhaps be judged less on the quantity of growth they help to achieve, but on its quality—what it does for the things that we, as citizens of this planet, really care about. This book will offer some guidance on what we have come to know about the quality of growth, and it will help to identify the research gaps that most urgently need to be filled. Anne Paugam Melissa Leach Akihiko Tanaka CEO Director President Agence Institute of Japan International Française Development Studies Cooperation Agency de Développement (IDS) (JICA) (AFD) iii Preface This book was written because the editors felt that insufficient attention is being given to the quality of growth. As the signs of negative impact of global climate change are becoming evident, and especially in the aftermath of the global economic turndown, societies had a choice—either reframe their definition of growth, or try to pursue it— growth as we have known it for many decades—via business as usual routes, using metrics rooted in the 20th century. True, there are emerging signs of change. For example, the debate on the post-2015 development agenda is slowly moving towards a greater consensus on the need to focus on growth that generates jobs, reduces inequality, is consistent with a sustainable use of natural resources and generates manageable amounts of greenhouse gases. By and large, however, despite such debate in international arena, politicians both in developed and developing countries alike seem to be choosing the latter routes, pursuing growth as we have known it via business as usual approaches and metrics. What does the academic world have to say on these issues? Among the various academic disciplines, economists in particular seem to have focused insufficiently on these issues: What are the dimensions of growth quality we should most care about? How to measure such qualities? And what are the tradeoffs between them in the context of different policy regimes and governance structures? And the list of such important research questions goes on. This collection of papers represents an effort of the researchers of the three institutions—AFD, IDS, and JICA—to contribute to the deepening and widening of international debate on such issues. We hope it provokes policy- makers to think twice about the blind pursuit of “growth at all costs,” and our development community to think seriously about how their day-to-day decisions and activities can contribute, both positively and negatively, to realizing a higher quality of growth. For the AFD Team For the IDS Team For the JICA Team Nicolas Meisel Lawrence Haddad Hiroshi Kato iv List of Contributors Acosta, Andrés Mejía Senior Lecturer of Polical Economy, International Development Institute, Kings College London Aglietta, Michel Emeritus Professor of Economic Sciences, University of Paris X Nanterre and Advisor to Centre d’Etudes Prospectives et d’Informations Internationales (CEPII) Bluhm, Richard Assistant Professor, Leibniz University Hannover, Institute of Macroeconomics Cirera, Xavier Research Fellow, Globalisation Team, Institute of Development Studies and Research Associate at the Centre for the Analysis of Regional Integration (CARIS) at the University of Sussex, UK de Crombrugghe, Denis Associate Professor, Maastricht University School of Business and Economics Haddad, Lawrence Senior Research Fellow, International Food Policy Research Institute (IFPRI) Hosono, Akio Senior Research Advisor, Japan International Cooperation Agency Research Institute (JICA-RI) Kato, Hiroshi Vice President, JICA Lamichhane, Kamal Associate Professor, University of Tsukuba, and Former Research Fellow, JICA-RI Losch, Bruno Research Director, Centre de Coopération Internationale en Recherche Agronomique pour le Développement (CIRAD), UMR Art-Dev Masset, Edoardo Research Fellow, Institute of Development Studies (IDS) v Meisel, Nicolas Senior Economist, Research Directorate, Agence Française de Développement (AFD) Paudel, Damaru
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