Determinants of Inclusive Growth in ASEAN

IMF Working Papers, July 3, 2020

Source details

Authors: Victoriia Alekhina, Giovanni Ganelli
Date: July 3, 2020
Objective: Identify factors that could contribute to more equally distributed growth in ASEAN.
Measurement: Inclusive growth is measured using a variable integrating per capita income growth and an equity index.
Method: Cross-country panel analysis of the impact of macro-structural factors on inclusive growth and its two components.

Factors that significantly drive inclusive growth:
- Fiscal redistribution
- Female labor force participation
- Productivity growth
- FDI inflows
- Digitalization
- Savings
Historical context: Over the past decades ASEAN countries experienced rapid economic growth accompanied by a dramatic fall in poverty rates, but income inequality has not retreated.

Scenario analysis based on econometric results:
- The implementation of fiscal redistribution and labor market-oriented structural reforms could help significantly accelerate inclusive growth in ASEAN.
Policy areas highlighted:
- Fiscal policy (redistribution)
- Labor market policies to raise female labor force participation and enhance inclusiveness
- Policies to boost productivity, FDI inflows, digitalization, and savings

Subject: Economic growth, Fiscal redistribution, Inclusive growth, Income distribution, Income inequality, National accounts, Personal income
Keywords: ASEAN country, Asia and Pacific, distribution data, East Asia, economic growth, Equity, Fiscal redistribution, GDP, Inclusive growth, income, income distribution, Income distribution, income inequality, Income inequality, income share, Inequality, inflation rate, per capita income, Personal income, simulation result, WP