Equity or equality?
On 28 November, the Broker attended an exclusive meeting of the Prince Claus Chair in Development and Equity, chaired by Her Royal Highness Princess Máxima of the Netherlands. The meeting took place at Noordeinde Palace in The Hague. On this day, the Prince Claus Chair celebrated its tenth anniversary. The Prince Claus Chair aims to continue the work of Prince Claus (1926 – 2002) on equity and development.
Development and equity: two words that were always central to the thinking of the late Prince Claus (1926-2002). These concepts have therefore been chosen as the motto of the rotating academic Prince Claus Chair that was established in 2002. They indicate two areas of thinking that have guided the academic work of the ten professors from Africa, Asia, Latin America, the Caribbean and the Pacific who have held this chair so far.
For Prince Claus, equity was always a crucial element of development. Only recently, however, has it once again become central to development discussions. Equity and equality, two words that were used during the discussions and presentations at this tenth anniversary seminar, appear at first sight to be interchangeable. However, there is a difference. The difference lies in the more ‘political’ connotation of the word equality (or inequality). Unlike poverty, inequality can only be solved by fundamentally altering power relations, while the mainstream approach to poverty reduction tends to be more technical: if we just try hard enough, poverty can be reduced without harming the rich and those in power. Whatever perspective is right, it was clear that such a political debate had to be approached carefully at the Palace. As a member of the royal family and especially as the wife of the future King of the Netherlands, Princess Máxima always has to be understandably very cautious in making political statements. In her speech therefore, she did not burn her fingers by attempting to define equity, let alone inequality. She could, however, have done so by citing her late father-in-law, who argued that economic growth must benefit social equality.
Prince Claus, for example, made the following sharp statement on cash flows and development in the speech he wrote to ‘celebrate’ fifty years years of development cooperation, in 1999. In the end, Claus was not allowed to express this speech, but the text was quoted in the book De wereld volgens prins Claus 1: ‘There are more poor and disadvantaged people in the world than ever […] Fifty years of development aid has created a situation in which there is a net transfer of resources from poor to rich countries. That is the antithesis of what development aid is about, and it serves as a very useful indicator of the efficiency and effectiveness of what we call development aid […] After 50 years of development cooperation the world is more unequal than ever.’ The Prince was also highly aware of the relevance of posing the right questions: ‘We are desperately in need of new conceptual and analytical paradigms which demonstrate much more sensitiveness to issues relating to the distribution of poverty and possibilities, both between and within nations’, Claus said at the opening of the SID World conference in Amsterdam in 1991. 2 In his Amsterdam 1991 speech, he strongly criticized the current role of economics in development theory: ‘I believe that part of the problem is due to the place of economics in development theory. My conviction is that there is more to it: if we take a look at the development of economic theory in the past 200 years, we can conclude with acceptable exaggeration that it has mainly been committed to the question of how those who are rich can increase their wealth. Economists are paying almost no attention to the question of distribution. I believe indeed that mainstream economics represents an orthodox consensus in many respects, which is demonstrably conservative.’ (See ‘Stalling growth and development‘ for a discussion of the role of mainstream economics in development policies).
Tenth anniversary of the Prince Claus Chair
The Broker was present at the tenth anniversary of the Prince Claus Chair, which was celebrated in Noordeinde Palace in the presence of Queen Beatrix and Princess Máxima of the Netherlands. A selected and diverse audience of 100 invitees listened to speeches by Princess Máxima, who is chair of the Curatorium of the Prince Claus Chair, and the Minister for Foreign Trade and Development Cooperation Lilianne Ploumen, followed by presentations by the ten holders of the Prince Claus Chair since 2003. The ten chairholders briefly introduced their papers, which will be published in 2013.The discussion was led by Leo de Haan, rector of ISS (part of the Erasmus University Rotterdam). Towards the end, ASC Director Ton Dietz, who is a member of the Curatorium of the Prince Claus Chair), summarized the discussion.
Minister Ploumen, who had only been in office only for a short time when making her speech at Noordeinde and had just returned from a trade mission to Brazil, spoke of both equity and equality. She outlined some initial elements of ‘inclusive development’ or inclusive growth policies, building on the views of her predecessor Bert Koenders. In brief, her message was that although ‘economic growth is essential for poverty reduction’, this growth ‘has no consistent effect on inequality’. ‘Both extreme egalitarianism and extreme inequality can be bad for economic growth’. ‘Unequal opportunities are economically inefficient and redistribution can potentially stimulate both growth and equity’.The debate among the chairholders and the symposium guests did touch upon a number of those more sensitive aspects. According to Bob van der Bijl (NABC), the ‘core of the matter is a very small elite refusing to share the wealth in almost all African countries’. Amima Mama replied: ‘It Is not about wrong leaders, but about wrong processes, wrong systems and wrong institutions that are not democratic and participative.’ She pointed to the fact that African elites act differently from Western elites, who usually invest their wealth in their own countries. Financial globalization makes it possible for African and other elites to move their capital and avoid paying taxes.
Ploumen also elaborated a little on how countries can achieve greater equality, citing research on how Asian countries had found their way out of poverty: ‘As it turned out, the Asian miracle was merely due to policy choices; a result of the Tracking Development research project, funded by her Ministry. Sound macro-economic management. Economic freedom for farmers and small entrepreneurs. And, last but not least, pro-rural and pro-poor public spending.’
The Prince Claus Chair
The Prince Claus Chair was founded in 2003, with the aim of continuing the work of Prince Claus on equity and development. Utrecht University and the International Institute of Social Studies of Erasmus University Rotterdam alternately appoint an outstanding young academic from Africa, Asia, Latin America, the Caribbean or the Pacific to the Prince Claus Chair, which rotates annually with an overlap. The first ten chairholders were:
Some chairholders in the debate underlined the need for a more structural approach to equity. ‘Equity is not only about redistribution, but even more so about the process to reach this’, said Stella Quimbo, the chairholder for 2011-2013. Patricia Almeida Ashley added that an analytical framework is needed for political and economic factors that can feed into more social policies. ‘We need not only goals like the MDGs, which are merely wishes, but also indicators for the processes to get there.’ As Ton Dietz remarked in his summarizing speech at the meeting, in reference to the MDGs: ‘It can be expected that in the next few years many discussions will be focused on how to formulate measurable targets for reducing inequality and reaching better equity conditions for all.’
Speaking to a partly academic audience, Ploumen underlined the necessity of ongoing research, referring to one of the five ‘knowledge platforms’ at her Ministry, focusing on development strategies, with a focus on inclusive development. However, she continued, ‘research is nothing without policy […] and growth is nothing without equity. For equity, we need coherence. That is why my portfolio covers trade, investment and finance, industry, social policy and rural development. That is why coherence is at the heart of my development policy.’Some chairholders in the debate underlined the need for a more structural approach to equity. ‘Equity is not only about redistribution, but even more so about the process to reach this’, said Stella Quimbo, the chairholder for 2011-2013. Patricia Almeida Ashley added that an analytical framework is needed for political and economic factors that can feed into more social policies. ‘We need not only goals like the MDGs, which are merely wishes, but also indicators for the processes to get there.’ As Ton Dietz remarked in his summarizing speech at the meeting, in reference to the MDGs: ‘It can be expected that in the next few years many discussions will be focused on how to formulate measurable targets for reducing inequality and reaching better equity conditions for all.’
‘So economic growth alone cannot be the whole answer’, the minister continued. ‘We need inclusive growth; we need equity to fight poverty successfully. This is not a new concept. It has been used to fight poverty in Western Europe for a long time. Think of progressive taxation, social services and safety nets. Or take government subsidies for the underserved. Some people still believe that these initiatives are synonymous for killing economic growth. But history proves them wrong.’ Ploumen ended her speech with an urgent plea: ‘All the more reason to step up the fight against inequality […] I hope inclusive development will not turn out to be just another development buzz word. I hope we can truly place equity at the heart of our development efforts.’
Ton Dietz also addressed both equity and equality in his speech. He emphasized that it can be expected that reducing inequality and providing better equity conditions for all will be high on the political agenda. He stressed that the United Nations Task Team on the post-2015 United Nations Development Agenda has suggested in its recent report to the UN Secretary General Realizing the Future We Want for All that ‘reducing inequalities’ should become one of thirteen new goals for a post-2015 development agenda.
The discussions at the seminar were not only about income inequality, which The Broker chose to focus on in its Inequality Dossier, but about a multitude of inequalities. This broad range of inequalities was accorded its full weight in the wide-ranging issues the ten chairholders addressed in their presentations. And indeed, looking at only material differences is a much too narrow and one-dimensional view. However, this broadness also entails a risk: if all problems can be addressed under the umbrella of ‘inequality’, as used to be the case with terms like ‘poverty’ or ‘development’, in what sense is the concept helpful? An overly strong generalization of inequality, prompted by the renewed attention paid to it, might miss its purpose. The risk is that the development sector will walk into old traps: new terminology and new hypes conceal the fact that it is a question of ‘same meat, different gravy.’
So what is precisely the new, distinctive feature of the focus on inequality? Unfortunately, this question was not explicitly on the agenda of the seminar. But perhaps an answer lies in the words of Professor Rema Hammami: ‘Would you like equal rights or equitable rights? The latter is vague, it depends on what someone wishes to appropriate to you. Equality, on the contrary, is a political tool […] We need to put development back into the real world of politics and inequality.’
- Bieckmann, F. (2004) De wereld volgens Prins Claus, p. 260. Metz & Schilt
- Bieckmann, F. (2004) De wereld volgens Prins Claus, p. 257. Metz & Schilt