The Political Economy of Inclusive Growth

Much research has focused in the past on the question of what economic and social policies are needed to generate inclusive growth, i.e. growth that raises average per-capita income and reduces poverty at the same time. German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) has formed a cross-departmental research team that takes a more political economy perspective on the issues. It focuses on the effect of political factors on inclusive growth and analyses how they also impact (as intervening variables) the effectiveness of 'inclusive growth policies', i.e. economic and social policies that have been identified as helpful in the promotion of growth and poverty reduction.

Project Lead:
Jörg Faust
Markus Loewe

Project description

What motivates this project is that, while democracies are generally believed to perform better than autocracies at bringing about development, there is substantial variation in performance both within regime types and within countries. Moreover, there is also a need for research that specifically analyses the political factors that can lead to more inclusive growth. The research project tackles these issues by conducting cross-country studies using macro-level data and within-country studies using meso-level and micro-level data. The cross-country studies analyse the relationship between political regimes, on the one hand, and development outcomes and policy performance, on the other hand, while the within-country studies examine the ways in which political institutions shape the adoption and effectiveness of policies at the subnational level. The selection of countries for within-country studies is to a large extent shaped by the availability of data and variance in both the independent variables (policy, shape of political institutions) as well as the dependent variable (inclusive development) at a sub-national level. Meeting these necessary preconditions well, India as well as Peru both qualified as case studies so far.



Demokratie, inklusive Entwicklung und die Mittelallokation in der deutschen und europäischen Entwicklungszusammenarbeit