Why is Macroeconomics Neglected in Equity and Inclusion Strategies for Sustainable Development? An Exploration of Four Systemic Barriers

Abstract

The literatures on Macroeconomics and Human development and capabilities have been described as constituting “two different worlds” that never intersect despite the importance of macroeconomics for human development (Nayyar [2012]. “Macroeconomics and Human Development.” Journal of Human Development and Capabilities 13 (1): 7–30.). This paper explores the barriers that keep the two worlds apart in policy making. It considers the case of national strategies for one is implementing UN Agenda 2030 (better known as the SDGs) with a commitment to equity and inclusion; the majority of which rely on social protection and neglect macroeconomic policies. This paper proposes four systemic barriers in the policy making processes: institutional silos and gaps, informational deficits, ideology, and interests. We highlight how these barriers play out in mutually reinforcing ways to construct resilient barriers: narrowly defined mandates of central banks and other economic agencies are reinforced by ideological commitments and the influence of vested interests to neglect inclusion, equity and sustainable development as policy objectives, and in policy research agendas. This in turn creates a vicious circle of information deficits with respect to policy alternatives. The paper discusses how these barriers play out differently in different policy making contexts for different stakeholders.