How to Operationalize Inequality Issues in Country Work

Source details

Economic inclusion is defined as the broad sharing of the benefits of, and the opportunities to participate in, economic growth, encompassing equitable outcomes related to financial well-being, opportunities in access to markets and resources, and protection of the vulnerable.
The note provides an overview of good practices and resources available to staff for integrating inequality-related issues into country work.
The note is consistent with the 2015 Guidance Note for Surveillance Under Article IV Consultations and draws on the 2013 Guidance Note on Jobs and Growth Issues in Surveillance and Program Work.
A pilot initiative on inequality was launched in 2015, with the third wave of countries currently participating; staff proposes to incorporate the analysis of inequality-related issues into broader country work where relevant once this wave is concluded.

High inequality is negatively associated with macroeconomic stability and sustainable growth — core to the Fund’s mandate in promoting systemic, balance of payments, and domestic stability.
Some macroeconomic policies and reforms may have adverse distributional implications, which can undermine public support for reforms.
Interest in distributional issues and inequality has grown among the membership, increasing demand for the Fund to work in these areas.

Coverage of inequality issues in staff reports should be selective and calibrated to the degree of macroeconomic significance.
All teams should consider whether inequality issues are relevant, taking into account the authorities’ priorities.
There is no presumption that inequality will be covered everywhere or every year; in-depth coverage is anticipated in only a limited number of cases any year.
Staff should:
- Point to macroeconomic significance where it exists.
- Focus analysis on aspects with economic implications.
- Limit specific policy advice to areas where there is Fund expertise.

The note lays out resources available to country teams, including existing analytical work and availability of data and tools (resources are described in the note; teams should consult the note for details).
The note provides examples of good practices with respect to coverage of inequality-related issues in country reports.

How to Operationalize Inequality Issues in Country Work, June 13, 2018