Can growth and equity go hand in hand?

Includes bibliography

This article presents the issue in the context of the theoretical and empirical debate, started by Kuznets, on the possibility of achieving growth with equity. The conclusion is that there is no inevitable conflict between these two goals, provided that economic policy promotes the areas of complementarity between growth and equity. It therefore rejects the approaches which assume that there is an insoluble conflict between these objectives, such as the "trickle-down" theory (which stoically accepts that such a conflict exists and proposes that those affected should wait as long as is necessary for their situation to improve); and the contrasting "parallel" approach (which suggests that growth should be sacrificed in favour of equity, with social policy being entrusted with the correction of the worst distributive effects of economic policy);. Instead, it advocates an "integrated" approach in which economic policy incorporates considerations of income distribution and social policy pays due attention to efficiency, while both attach great importance to the areas of complementarity between growth and equity. In this respect, it mentions four major areas of complementarity between these two goals, three of which are the subject of fairly general agreement (keeping the macroeconomic balances within acceptable margins; investment in human resources, and a policy of full employment in productive activities);, while the fourth is less generally agreed but is strongly supported by ECLAC: the need for the rapid, large-scale spread of technology. Finally, the article notes the instrumental differences between the ECLAC and neo-liberal approaches in seven specific areas of economic policy. For example, the neo-liberal approach gives priority to the deregulation and liberalization of markets, the neutrality of the instruments used, and some degree of passivity on the part of the State. The ECLAC approach, in contrast, calls for selective action by the State to make up for the most serious flaws and shortcomings in the factor markets, without which it is considered unlikely that the region can attain the high economic growth rates which past history has shown to be within the reach of late-industrializing countries, while it is even more unlikely that such growth can be attained with equity.