Immiserizing growth: Growth varies across country contexts, immiserization prevails

Growth generally provides opportunity and reduces poverty. But there are episodes where it does not – these can be a substantial proportion (10-25%) of situations, at an aggregate level. Immiserizing growth excludes or leaves people behind, or impoverishes people. [see Kunal paper for figures] This often gets lost in discussions about how important growth is for poverty reduction. At a more micro-level (communities, districts, regions), it is unclear how much immiserizing growth there is. This was the theme of a workshop I and colleagues attended at the University of Toronto last week as part of the preparation for writing the fourth Chronic Poverty Report on Growth.

Growth varies across country contexts, immiserization prevails

Some people can get poorer amid growth, even rapid growth, others can be impoverished (become poor) or be downwardly mobile, or have other dramatically negative experiences – malnutrition, unhappiness, or a loss of community. The workshop focused more on the material negatives. It highlighted the following experiences:
•    The extreme case of Nigeria where oil based growth has been characterised by apparently little poverty reduction since the early 2000s (though the data is shaky), the number of poor people appears to have grown astronomically, where there has been widespread institutional failure over a long period, and by conflict – Boko Haram in the very poor north and in the oil fields in the Niger Delta (2002-2015).
•    India where rapid growth in the 21st century has been uneven, with the poorest people in some states experiencing loss of income, and in others the rate of impoverishment exceeding the rate of escaping poverty; the former tend to have been conflict affected and mineral producers, and not to have had lower caste/class representation in the state political leadership (2004-11). [1]
•    Mexico where the indigenous populations of small farmers in Chiapas have been systematically discriminated against in favour of largescale agriculture (and later, with NAFTA, US corn farmers), and with a persistent ethno-cultural ideology to justify the (unacknowledged) discrimination.
•    Indonesia where most positive growth happened in cities (2002-12).
•    And even China where rapid growth has been accompanied by increasing unhappiness, both of which were intriguingly attributed to the unbalanced sex ratio which makes young men and their families have to work very hard to accumulate the capital to construct a house with which to woo a scarce wife, so hard that mortality and stress among males between 40 and 60 is growing!

What is responsible for immiserizing growth?

Growth somehow ‘leaves some people behind’ – this may be a function of the nature of the growth process, or of the institutions and social norms within which growth takes place. Some are groups of people to whom stigmatising labels are attached; some are occupational groups – small farmers, casual labourers not favoured by the operation of markets. Indigenous populations can face heavy economic discrimination, or be deliberately engaged in market processes – these are politically directed differences. China has included its indigenous people much more deliberately than India has done, for example. Similar socially constructed processes can affect other regionally or culturally (ethnically, religiously) defined groups, or persons with disabilities. Or they can be deliberately included.

Downward mobility and impoverishment can be due to war, natural hazards, the costs of ill-health, or much more closely related to patterns or effects of growth. Examples of the latter include: negative price shifts – farm input prices rising while output prices fall; changing international terms of trade, food price inflation; and land dispossession.

The workshop spent a lot of time discussing how politics (and ‘political settlements’) shapes the character of growth and the above outcomes – how politicians can govern in favour of particular interests and not others, how they can find room for manoeuvre (state autonomy) to challenge inequality, but not enough attention was given to seeing the issue in the context of whole, evolving economic and political systems. It also spent some time discussion the role of particular policies – India’s public food distribution system, social protection programmes, policy support for small farmers – in countering exclusion and persistent poverty, though little was presented in detail on these (with the exception of India’s PDS). Even less yet was presented on the role of gender inequalities, though it is not hard to imagine that these may play a large role in carrying forward specific country trends of immiserizing growth.

What next? (Re)-introducing the Chronic Poverty Report

This leaves a big role for the Chronic Poverty Report – what are the policies (as well as the supporting politics) which will shape growth and enable it to contribute to tackling chronic poverty, as well as prevent impoverishment? We have a team in place, we’re discussing these issues – watch this space!

[1] CPAN produced a working paper for the workshop on this topic, which will be available on our website in the near future.