These are the most inclusive economies in the world

A WEF report says people and living standards must be placed at the centre of national and international economic policies.

Picture: Pixabay.com.

Slow growth and rising inequality have reached a tipping point in many of the world’s advanced economies.

The World Economic Forum's Inclusive Growth and Development Report 2017 lays out strategies for cutting the current vicious cycle of stagnation and polarisation of income and opportunities. It aims to answer the question - how can this be turned into a virtuous cycle of greater social inclusion and stronger, more sustainable growth?

BREAKING THE VICIOUS CYCLE

In other words, how can we increase not just GDP but the extent to which this top-line performance of a country cascades down to benefit society as a whole? The answer, according to the report, is placing people and living standards at the centre of national and international economic policies.

Education, infrastructure, ethics, investment, entrepreneurship and social protection are just some of the factors playing into creating this new economic policy – and the mix will be different for each country.

The World Economic Forum’s Inclusive Development Index (IDI) ranks the world’s advanced and developing economies based on their performance against key performance indicators ranging from poverty, inequality to public debt and environmental factors.

LEARNING FROM THE LEADERS

Norway tops the IDI, with high and rising living standards, effective social protection and low inequality. There is a high degree of social mobility, low unemployment and a large share of women participate in the labour force, helped by sound parental leave policies and affordable childcare.

Luxembourg and Switzerland come in second and third place in a top 10 dominated by Northern Europe. This is driven by robust growth and employment, high median living standards, strong environmental stewardship and low public debt.

In fourth place, Iceland had also shown the greatest improvement over the past five years, together with New Zealand and Israel.

Denmark, Sweden and the Netherlands follow, buoyed by high living standards and good social protection.

New Zealand and Australia, in eighth and ninth place respectively, ranked particularly highly for aspects such as fostering an entrepreneurial culture.

Austria completes the top 10.

ROOM FOR IMPROVEMENT

Room for improvement for these top performing countries frequently surrounds reducing wealth inequality, which has risen in 77% of economies globally, and intergenerational equity.

Among developing economies, Lithuania, Azerbaijan and Hungary lead the IDI, with Lesotho, Nepal and Georgia having improved the most since 2011.

This article was republished courtesy of the World Economic Forum.

Written by Gemma Corrigan, Economist, World Economic Forum.

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