The potential for economic growth and poverty reduction is heavily influenced by state and social institutions. Action to improve the functioning of state and social institutions improves both growth and equity by reducing bureaucratic and social constraints to economic action and upward mobility.
Governance - laying the political and legal basis for inclusive development
State institutions need to be open and accountable to all. This means having transparent institutions, with democratic and participatory mechanisms for making decisions and monitoring their implementation, backed up by legal systems that foster economic growth and promote legal equity. Since poor people lack the resources and the information to access the legal system, measures such as legal aid and dissemination of information on legal procedures are especially powerful instruments for creating more inclusive and accountable legal systems.
Creating public administrations that foster growth and equity
Public administrations that implement policies efficiently and without corruption or harassment improve service delivery by the public sector and facilitate growth of the private sector. Appropriate performance incentives are needed to make public administrations accountable and responsive to users.
Promoting inclusive decentralization and community development
Decentralization can bring service agencies closer to poor communities and poor people, potentially enhancing people’s control of the services to which they are entitled. Decentralization needs to be combined with effective mechanisms for popular participation and citizen monitoring of government agencies.
- A tale of two economies
- Legal service organisations help poor people gain access to the protections of the legal system
- Community monitoring can reduce environmental pollution
- Taking law to Tongan Villages
- Students for good governance
- Criminal Justice in Cambodia
Grameen Bank http://www.rdc.com.au/grameen
Promoting gender equity
Unequal gender relations are part of the broader issue of social inequities based on societal norms and values. But gender equality is of such pervasive significance that it deserves extra emphasis. While patterns of gender inequity vary greatly across societies, in almost all countries a majority of women and girls are disadvantaged in terms of their relative power and control over material resources (in most countries land titles are vested in men), and they often face more severe insecurities (for example, after the death of their husband). Poor women are thus doubly disadvantaged. Moreover, the lack of autonomy of women has significant negative consequences for the education and health of children.
Greater gender equity is desirable in its own right and for its instrumental social and economic benefits for poverty reduction. There has been progress - for example, in education and health - but much more needs to be done.
Tackling social barriers
Social structures and institutions form the framework for economic and political relations and shape many of the dynamics that create and sustain poverty - or alleviate it. Social structures that are exclusionary and inequitable, such as class
stratification or gender divisions, are major obstacles to the upward mobility of poor people. Governments can help by fostering debate over exclusionary practices or areas of stigma and by supporting the engagement and participation of groups rep-resenting the socially excluded. Groups facing active discrimination can be helped by selective affirmative action policies. Social fragmentation can be mitigated by bringing groups together in formal and informal forums and channeling their energies into political processes in-stead of open conflict. Other actions could include removing ethnic, racial, and gender bias in legislation and the operation of legal systems and encouraging the representation and voice of women and disadvantaged ethnic and racial groups in community and national organizations.
Supporting poor people’s social capital
Social norms and networks are a key form of capital that people can use to move out of poverty. Thus it is important to work with and support networks of poor people and to enhance their potential by linking them to intermediary organisations, broader markets and public institutions. Doing this also requires improving the legal, regulatory, and institutional environments for groups representing poor people. Since poor people usually organise at the local level, actions will also be needed to strengthen their capacity to influence policy at the state and national levels, such as by linking local organisations to wider organisations.