A French economist has said that the inequalities created by globalisation could be controlled by reducing market distortions, redistribution of wealth and framing domestic policies that do not impair growth.
“Global experience shows that while globalisation and growth can lead to inequality, it need not necessarily be so. Domestic policies can reduce inequality without impairing growth,” Francois Bourguignon, director of the Paris School of Economics said at a dialogue here on Wednesday.
According to a press release, the development dialogue on “Poverty and inequality” was organised by the Pakistan Institute of Development Economics (PIDE) in collaboration with the World Bank as part of an effort to bring leading experts to Pakistan to exchange global knowledge and experiences on key policy and development challenges.
Dr Bourguignon, who served as chief economist for the World Bank for four years, is an international expert on the micro-determinants of poverty and inequality, and their relation to labour market issues. In a detailed presentation, he said reduction of absolute poverty has to be the main goal of development.
He added that inequality slows down poverty reduction and is bad for growth beyond a certain level.
He said that preventing inequality from growing beyond a set limit is an important objective and can be achieved by speeding up growth through correcting inequality, redistribution through the accumulation of productive assets such as education, health care, and access to credit and infrastructure among the poor, rather than the redistribution of current income.
Published in The Express Tribune, July 26th, 2012.