Topic 5: Enhancing Inclusion
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Context and motivation
- Despite strong growth over the past two decades, income inequality remains high in many low-income countries (LICs).
- The ongoing COVID-19 crisis is disproportionally affecting people in already vulnerable situations and has spurred a renewed focus on distributional issues.
- High levels of inequality can impair the sustainability of growth and macroeconomic stability, limiting countries’ ability to achieve smooth recovery and reach the Sustainable Development Goals.
- Reducing gender gaps can have important economic benefits: gender equality can boost productivity, enhance economic resilience, and reduce income inequality.
FCDO-IMF partnership — phases and focus
- Phase 1 (March 2012 to March 2015)
- Aim: build distributional analysis into macroeconomic models and examine the link between fiscal policy and income inequality.
- Achievement example: a high-level conference on Fiscal Policy and Income Inequality in Sub-Saharan Africa.
- Outputs recorded for year 1, year 2, and year 3 of the FCDO-IMF partnership.
- Phase 2 (April 2015 to March 2017)
- Aim: build and apply tools to describe and predict distributional consequences of macroeconomic policies, incorporating distributional factors; place gender more squarely in IMF policy-oriented research.
- Key achievement: development of the macroeconomic and distributional analysis model (MDAM), a framework to evaluate the distributional impacts of various macroeconomic policies, applied to several countries.
- Additional outputs: a paper on Macro-Structural Policies and Income Inequality in Low-income Developing Countries; a series of papers on gender budgeting for Asia, Caribbean and Pacific Islands, Europe, Middle East and Central Asia, Sub-Saharan Africa, and Western Hemisphere; conferences on Macroeconomic Policy and Income Inequality and on Gender and Macroeconomics.
- Outputs recorded for year 4 and year 5 of the FCDO-IMF partnership.
- Phase 3 (April 2017 to March 2020)
- Focus: inequality and gender and their intersection; expanded training courses and dissemination.
- Achievements:
- Applications of the inequality toolkit on Benin and Dominica.
- Applications of the gender budgeting toolkit on Nigeria, Sri Lanka, and Rwanda.
- An SDN on Women in the Labor Force: The Role of Fiscal Policies.
- A paper on the distributional effects of capital account liberalization.
- High-level conferences on gender equality and inclusive growth.
- Outputs recorded for year 6, year 7, and year 8 of the FCDO-IMF partnership.
- Phase 4 (April 2020 to March 2025)
- Focus areas:
- Gender equality and sustainable growth, including how the COVID-19 pandemic has affected gender inequality and the channels and trade-offs between different policies to address country-specific gender gaps.
- Quantifying short-run and long-run welfare implications of revenue mobilizations using different tax instruments.
- Outputs to be recorded for years 9–13 of the FCDO-IMF partnership.
Tools, methods, and dissemination
- Development and application of analytic tools to assess distributional impacts:
- Macroeconomic and Distributional Analysis Model (MDAM).
- Inequality toolkit.
- Gender budgeting toolkit.
- Production of thematic papers and SDNs linking macro-structural policies, fiscal policy, capital account liberalization, and gender to distributional outcomes.
- Delivery of conferences and training courses to foster research discussions and disseminate findings on macroeconomic policy, income inequality, and gender.
Key implications for policy research and practice
- Integrating distributional analysis into macroeconomic modeling is central to understanding the equity implications of fiscal, structural, and external policies in LICs.
- Gender-focused analysis and gender budgeting are important complements to distributional macroeconomic frameworks for promoting inclusive growth.
- Policy evaluation should consider both short-run and long-run welfare implications, particularly when assessing revenue mobilization via different tax instruments and post-COVID recovery strategies.
Content in this bundle
- June 2019
- June 2020
- June 2021
- June 2022
- June 2023
- June 2024
- June 2025
- Call to Donors to Strengthen IMF Research Capacity for Low-Income Countries
- Macroeconomic Research in Low Income Countries — June 2013
- Macroeconomic Research in Low Income Countries — June 2014
- Macroeconomic Research in Low‑Income Countries — Third Year Annual Report to DFID
- Annual Review of the Macroeconomic Research in Low Income Countries project
- June2017
- MRLIC programme review — By March 2018
- List of Outputs: Year 1 to 13 (XLSX)
- Dec 2018, Vol.6
- Dec 2019, Vol.7
- Dec 2020, Vol.8
- Dec 2021, Vol.9
- Dec 2022, Vol.10
- Dec 2023, Vol.11
- Dec 2024, Vol.12
- Dec 2025, Vol.13
- Jun 2018, Vol.6
- Jun 2019, Vol.7
- Jun 2020, Vol.8
- Jun 2021, Vol.9
- Jun 2022, Vol.10
- Jun 2023, Vol.11
- Jun 2024, Vol.12
- Jun 2025, Vol.13 (PDF)
- Mar 2018, Vol.6
- Mar 2019, Vol.7
- Mar 2020, Vol.8
- Mar 2021, Vol.9
- Mar 2022, Vol.10
- Mar 2023, Vol.11
- Mar 2024, Vol.12 (PDF)
- Mar 2025, Vol.13
- Mar 2026, Vol.14
- Sep 2018, Vol.6
- Sep 2019, Vol.7
- Sep 2020, Vol.8
- Sep 2021, Vol.9
- Sep 2022, Vol.10
- Sep 2023, Vol.11
- Sep 2024, Vol.12
- Sep 2025, Vol.13 (PDF)
- Devarajan–O'Connell final report on the MRLIC project
References