The Inclusive Development Index 2018 Summary and Data Highlights Slow progress in living standards and widening inequality
stability policies is a key reason for many governments’ failure
have contributed to political polarization and erosion of
in recent decades to mobilize a more effective response to
social cohesion in many advanced and emerging economies.
widening inequality and stagnating median income as
This has led to the emergence of a worldwide consensus
technological change and globalization have gathered force.
on the need for a more inclusive and sustainable model of growth and development that promotes high living standards for all.
This policy imbalance is reinforced by the prevailing metric of national economic performance, the gross domestic product (GDP), which measures the aggregate amount of goods and
To help narrow the gap between aspiration and action,
services produced in an economy. Most citizens evaluate their
the World Economic Forum System Initiative on Shaping
respective countries’ economic progress not by published
the Future of Economic Progress last year introduced a new
GDP growth statistics but by changes in their households’
economic policy framework and performance metric in its
standard of living — a multidimensional phenomenon that
Inclusive Growth and Development Report 2017. The
encompasses income, employment opportunity, economic
framework identifies 15 areas of structural economic policy
security, and quality of life. And yet, GDP growth remains the
and institutional strength that have the potential to contribute
primary focus of both policymakers and the media, and is still
simultaneously to higher growth and wider social participation
the standard measure of economic success.
in the process and benefits of such growth.
What gets measured gets managed, and the primacy of GDP
The structural policies and institutions in these domains
statistics tends to reinforce the amount of attention paid by
collectively represent the system through which modern
political and business leaders to macroeconomic and financial
market economies diffuse gains in living standards.
stability policies, which influence the overall level of economic
Governments often fail to appreciate the potential of policy
activity, relative to that paid to the strength and equity of
in these areas to increase the rate of growth and spread its
institutions and policy incentives in such areas as skills
benefits more widely, particularly in demand-constrained
development, labor markets, competition and rents, investor
and low-productivity contexts. Underemphasis of these
and corporate governance, social protection, infrastructure,
policies relative to macroeconomic, trade, and financial
and basic services. These play an important role in shaping