By Hartmann, Hauke; Schraad-Tischler, Daniel
Americas Quarterly , Vol. 6, No. 2
When does inequality and economic frustration boil over into political change or instability? The answer lies more in the nature and quality of the political regime than in the levels of social and economic exclusion.
Overcoming widespread poverty and inequality is not just a moral imperative. It is key to political and economic development. Social exclusion acts as a drag on sound and sustainable economic growth by preventing large segments of the population from fully contributing to formal economy. And even if formal political rights exist on paper, social exclusion fundamentally undermines meaningful political participation. Social exclusion leads to de facto disfranchisement, deprives individuals and groups of equal opportunities to voice opinions, organize and campaign, and precludes meaningful political activity for some segments of society.
While the connection between social exclusion and the quality of a political regime is hardly disputable, the correlation between social exclusion and the stability of political regimes is the focus of increasing debate.
Does the increase in social exclusion or its persistence lead to political instability? Two indices published regularly by Bertelsmann Stiftung, a private, independent German foundation and think tank, have started to look at this question. We use a database of the status of political and economic reform and the quality of governance in 128 developing countries (the Transformation Index of the Bertelsmann Foundation-BTI)1 and an evaluation of Organisation for Economic Cooperation and Development (OECD) country reform and challenges (the Sustainable Governance Indicators- SGI)2 that evaluates the governments' ability to respond to current social, political and economic challenges.
Together, both indices cover policy results and management achievements in 151 countries. They are based on the work of nearly 400 country and regional experts who evaluate political and economic governance, with scores ranging from 1 (very weak) to 10 (very good). (For more on these indices and their methodology visit www.americasquarterly.org/hartmann).3
We have combined the data into three variables for our country set, the fi rst two of which apply to developing and transition countries (BTI scores). We defi ne social inclusion as the level of socioeconomic development (reducing poverty and inequality), the extensiveness of social safety nets (government policies to compensate for social risks and alleviate handicaps), and equal opportunity (the absence of discrimination), political stability (which includes the state monopoly on the use of force), state legitimacy (degree to which the legitimacy of the nation-state is accepted), and confl ict intensity (degree of polarization, mass mobilization and political violence). For OECD countries, a slightly different set of SGI scores is introduced under the heading of social justice, which includes poverty prevention, equitable access to education, labor market inclusiveness, social cohesion and nondiscrimination, health, and intergenerational justice.4 (Access the full report at www.sgi-network.org.)
We start by looking at social exclusion. Despite perceptions to the contrary, the world is not signifi cantly less socially inclusive than six years ago. Even in countries where exclusion has increased, many governments have adapted.
During the past two years, poverty and inequality increased in 17 countries but decreased in 10 countries. In other words, in almost four-fi fths of all countries assessed, the socioeconomic conditions remained largely at the same level. Expanding the view to six years shows the same trends: deterioration in 24 countries and improvements in 18 countries. The fl ip side, though, is that while there was no dramatic net increase in poverty and inequality, many of the countries at the lower end of the spectrum tended to stay there.
Including the other two indicators of social inclusion- social safety nets and equal opportunity-in both time spans demonstrated even more positive results. …