The new chief economist at the World Bank

It is Francois Bourguignon. His work on inequality is highly regarded, but how is his policy sense? He recently noted the following:

It’s true that the Bank has focused on poverty and did not insist so much and as explicitly on inequality. I believe we must give more space to the problem of inequality and income distribution in general.

When it comes to growth he gives a “yes but” answer:

Of course, growth is critical to poverty reduction, but we need to analyze more closely who actually benefits from growth, and from the policies, programs and projects undertaken to reduce poverty. Will one or another group, or class, benefit more than others? Are our strategies reducing or increasing inequality? Are they pro-poor, benefiting everybody in the same proportion or benefiting relatively more those who are already better off?

Here is an interview with Bourguignon, including a brief biography, courtesy of www.politicaltheory.info.

My take: Go for growth, and worry about short-term inequalities only insofar as they pose political constraints. Getting growth is hard enough, and concern about inequality often gets twisted to favor special interests and block reforms. We should never care if a policy is “benefiting everybody in the same proportion”, and of course it never will do so, no matter how good an idea.