The perception that there is contradiction between economic growth policies and policies geared towards equity is misguided. This was one of the key messages of the World Bank’s World Development Report 2006 on Equity and Development, that came out in a public debate that launched the Report on 16 September in Brussels.
Mr. Francisco H.G. Ferreira, Lead Economist at the World Bank, in his presentation pointed out that inequalities in wealth and power combined with imperfect markets (credit, insurance, land, human capital) create large inefficiencies in development. Rather good policies for poverty reduction very often involve redistribution of influence or government expenditures away from dominant groups.
To this end the Report puts forward a number of proposals including:
- Investment in the capacities of those sections of the population lacking opportunities
- Promoting fairness in markets and the macro-economy.
- Leveling the international playing field through, inter alia, less trade distortion from richer countries,  greater scope for labor mobility, and greater volume and effective of aid.
Commenting on the report Mr. Simon Stocker of European NGO network - Eurostep argued that the report should have given greater emphasis to how decision making in international cooperation could be made more equitable. He also warned that the harmonization of aid being championed by the World Bank could lead to the Bank to impose its will on others.
Mr. Ferreira in response stated that the report could not have been more prescriptive on decision making in developing countries, pointing out that the World Bank does not have a mandate to do that.
For more information of the report click here.
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