An analysis of the nexus between social cohesion and inclusive development

Abstract

Since the 1980s, remarkable economic development has taken place almost world-wide. Economic growth in developing countries has lifted millions of people out of poverty and has reduced global inequality. More recently, the concern has been to make growth more inclusive. Since the global financial crisis, economic growth has slowed and there has been an increase in within country inequality. Skills-biased growth has created social tensions, and has facilitated the rise of populist leaders. To examine this challenge more closely, the World Economic Forum has published an Inclusive Development Index (IDI). The IDI focuses on economic indicators of inclusivity, such as income, employment, productivity, health and inequalities of wealth. This misses the social aspects of inclusiveness. In response, this dissertation sets out to determine the relationship between the IDI and social cohesion for a cross section of countries. The social cohesion measure was built using responses to the World Values Survey. A simple OLS regression model was used to examine the determinants of social cohesion, finding, among other things, a positive relationship with inclusive development.