Integration of Economic and Social Policies

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Integration of Economic and Social Policies

• General framework
• The role of public spending

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General Framework
Objectives
How to use means to reach objectives
Means
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But...

• Whose objectives?
• Who controls the means/resources?

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Objectives

• Overlap gt harmonisation of policies

Reduce poverty
Respect human rights
Improve social development
Increase output
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Means

• Harmonisation of economic and social polices
• Good practices / recipes
• Complex causalities
• One size does not fit all

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One size does not fit all

• Chile 90s Unemployment reduction and increase in
  minimum wage
• Poverty was reduced because large urban
  population and formal employment
• Increase agricultural prices to reduce rural
  poverty (standard pro-market structural
  adjustment recommendation)
• Depends on land tenure distribution and gender
  division of labour

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Complex causalities

• Fiscal
• Policy

• Income distribution

• Social
• development

• Output /
• employment

• Service
• delivery

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Fiscal Policy What are budgets?

• Document of intended behaviour
• Link between financial resources and objectives
• Set of goals with price tags
• Mechanism to make choices
• Plan of action

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What are budgets?

• Instrument for ensuring efficiency
• Network of communication on desires and resources
• Contract
• Settlement of political conflict
• Precedent

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The role of public spending

• Governance
• Synergy
• Physiocrats Produit Net

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Physiocrats Produit Net?
Private consumption for reproduction
Social services (productive public spending)
Private consumption not for reproduction
Allocation of production today maintains
current situation of despair and inequity
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Increase resources forproductive public spending
Social services (productive public spending)
Private consumption for reproduction
Challenge maintain incentives for
production and political acceptance
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In terms of productive public spending...

• What have been national priorities so far?

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Most countries under-invest in BSS
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BSS and external debt servicing
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How do you allocate 1 million?
Best, only, technical solution leads
to neoclassical trap...
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because...
unclear why not 2 million...
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and obscures dynamic aspects
Immediate problem...
Cohort 2
Cohort 1
Cohort 1
Time
linked to intermediate goal
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What is the reason for observed under-investment?
Resources or priority setting?
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To improve priority setting
Important to highlight...

• Objective
• Human rights/universality
• Political persuasion
• enlightened self-interest
• Synergies

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Investing in BSS is an inexpensive way of
reducing poverty, breaking the poverty cycle, and
laying the foundation for strong and equitable
growth
Girls education is critical
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SynergiesLife cycle of an educated girl
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Can/should markets be used to provide synergies?
Definition A market is a rationing mechanism
S
p
D
q
Excluded
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Productive social spending
Objectives
Synergies Governance (democracy)
Means Produit Net