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All on Board: Making Inclusive Growth Happen puts forth a new approach to economic growth that goes beyond traditional monetary indicators and includes dimensions that reflect people's well-being. It introduces an analytical framework to assess economic growth based on a measurement of multidimensional living standards. The report also presents win-win policies that can deliver stronger growth and greater inclusiveness in areas such as: macroeconomic policies, labour market policies, education and skills, infrastructure and public services and development and urban policies. It underscores the need to assess and weigh trade-offs and complementarities between and among policies, and the crucial role of good governance in implementing an Inclusive Growth agenda.

This report could not have come at a more crucial moment. A hesitant recovery from the financial and economic crisis, widening income gaps between rich and poor, and high unemployment in the mature economies have raised awareness about the need to restore growth and at the same time make sure that the dividends of greater prosperity are shared more evenly across society. In many emerging-market economies and developing countries, robust growth and the increased affluence that comes with it often have not delivered inclusive prosperity, economic opportunity, and better social indicators for all.

To what extent has inequality grown in the advanced economies over the last thirty years? How has the picture changed in emerging economies and developing countries? This chapter answers those questions by exploring trends in income inequality, and examining how individuals at different segments of the income distribution fare across a number of non-income measures related to well-being, including: education, health, employment, and exposure to environmental degradation. The picture that emerges is far from uniform, but there is a clear trend towards increased inequalities in OECD countries, as well as persistently high inequalities in emerging and developing countries, despite some improvements in many cases. The chapter goes on to consider the spatial distribution of both income and non-income outcomes, charting the geographic divides and concentrations of poverty that occur within countries, regions and cities.

What are the political-institutional obstacles to implementing Inclusive Growth policies? How can reform of governance structures and practices help to ensure that administrative barriers to inclusiveness are overcome? This chapter delves into the question of how governing and administrative bodies can be adapted to support the promotion of Inclusive Growth. In particular, the chapter considers how inclusiveness can be embedded in the policy process, examining a number of proposals: from efforts to improve voter participation, to tools for evidence-based policy making, and public consultations. The chapter also appraises strategies for building more inclusive institutions, considering the likely impact of technological change and reform on efforts to make inclusive institutions happen.

What is Inclusive Growth? How can policies be designed and implemented to address rising inequalities and spur stronger economic performance? This chapter responds by providing an overview of the analysis and policy recommendations developed throughout the remainder of the report. In particular, the chapter illustrates the case for Inclusive Growth, reviewing trends of widening inequalities, and recognising that economic growth is not an end in itself, but a means to promote societal well-being. This leads to an outline of the OECD’s approach to Inclusive Growth, premised on the importance of addressing multidimensional inequalities, and on recognising that they impact different groups in different ways. The implications for policy design are then examined, engendering the central insight that all economic and social policy choices should have the twin objective of promoting equity and enhancing growth. The ramifications for policy implementation are also considered, with emphasis placed on the importance of appropriate governing institutions and stakeholder participation.

What is behind the increase in inequalities? How have rising inequalities affected growth in living standards? Building on the OECD’s work on well-being, this chapter introduces an innovative analytical policy framework to examine the main drivers behind the rise of inequalities discussed in the preceding chapter. Proposing a novel measure of multidimensional living standards (comprising household disposable income, employment status, and longevity) the chapter identifies their growth for different segments of the population, and considers the impact of individual policies. The analysis shows that over the period immediately prior to the crisis, from 1995 to 2007, growth in multidimensional living standards across the OECD area was somewhat lower for the median household and the poor (those in the lowest decile) than for the “average” household.

What can be done about rising inequalities? How can policy programmes be combined to promote more Inclusive Growth that enhances well-being and raises living standards for all citizens? This chapter explores structural policies geared towards both raising the long-term growth potential of economies and making that growth more inclusive. The recommendations laid out pay particular attention to instruments in the following areas: fiscal and monetary policies, labour markets, education, competition and regulation, innovation and entrepreneurship, finance, infrastructure and public services, urbanisation, and development. The chapter sets out to consider how particular policies can be combined to foster synergies, and deal with trade-offs, between growth and equity objectives.

Inclusive Growth is about identifying policies that can deliver improvements in the population’s living standards with a more even sharing of the benefits of increased prosperity among social groups. In a context of widening worldwide inequalities – in the distribution of income and social outcomes that matter for people’s well-being – policy makers in advanced and emerging market economies, alongside their counterparts in developing countries, are examining the potential of Inclusive Growth policies to kick-start growth by turning equity into a driver of economic performance.