The United Nations Department of Economic and Social Affairs (DESA) has issued a policy brief on steps to redistribute income to support progress on SDG 1 (no poverty). Using modeling evidence, the brief recommends a strategy known as “economic growth with equity” while ensuring that the growth is environmentally sustainable.
In September 2021, DESA released the 2021 edition of “Perspectives on Sustainable Development,” which indicates that governments can achieve positive results on several SDGs by pursuing structural transformation aimed at growth, equity and protection of the environment. ‘environment. Additionally, in the midst of the pandemic and recovery period, countries have the opportunity to “consider solutions previously considered too difficult to implement.”
The policy brief titled “The Essential Role of Income Redistribution for Poverty Reduction: Alternative Scenarios”, published in October 2021, argues that the specific approach to income distribution “counts for poverty outcomes. Because the same rate of economic growth can lead to varying levels of poverty reduction, depending on levels of inequality.
The thesis presents six scenarios combining economic growth and reduction of income inequalities. DESA’s Global Economic Surveillance Directorate produced the forecast using its forecasting model for the global economy. The results show that reducing inequalities can lead to poverty reduction and works best when combined with robust growth.
The authors stress the need for growth to be environmentally sustainable, which will require better management of water and other natural resources, as well as a shift towards low-carbon technologies. They also say that achieving better results on SDG target 1.1 will require progress on both SDG 8 (decent work and economic growth) and SDG 10 (reduced inequalities).
In short, the brief proposes a strategy known as “economic growth with equity”. Through this approach, poverty reduction efforts are “anchored both in strong economic growth and in income redistribution”. This will vary by country depending on the context, but must take into account both equitable distribution and environmental protection.
The strategy emphasizes policies focused on:
- Job creation, progressive taxation and more comprehensive public service delivery;
- In largely agricultural countries, increase the productivity of the agricultural sector, while encouraging smallholder farmers and rural households to increase their off-farm income, for example through agricultural extension services;
- Establish social protection floors, strengthen them against shocks and use digital technologies to overcome resource constraints in order to achieve universal protection;
- Prioritize school quality in national human capital development strategies; and
- Incorporate other areas of the SDGs, such as good health and well-being (SDG 3), safe water and sanitation (SDG 6), to empower people to lift themselves out of poverty and achieve higher income and productivity.
[Publication: DESA Policy Brief 119: The critical role of income redistribution for poverty reduction: Alternative scenarios]