“Economic Growth, Poverty, Populism, and Democracy”

“Can The Poor Afford Democracy? : A Presidential Perspective.”(Final Lecture)

STUDY/BOOK PROJECT

Alejandro Toledo Ph.D.President of Peru, 2001-2006President, Global Center for Development and Democracy (GCDD)Payne Distinguished Visiting Lecturer (CDDRL) Freeman Spogli Institute forInternational Studies, Stanford UniversityDistinguished Fellow, Center for Advanced Studies in the Behavioral Sciences(CASBS), Stanford University

The Freeman Spogli Institute for International Studies / CDDRL Stanford University

Frank E. and Arthur W. Payne Distinguished Lecture Series2008

Election Day

Elected Presidents

Political Democracy

With power in their hands.

APEC Chile 2004

South American Interoceanic Highway

Export Agro Industry

Economic Growth

Faces Of Poverty

Early Malnutrition

Lack Of Drinkable Water

Child Labor

Social Unrest: Counterproductive For Growth

Authoritarian Populism

DemocraticGovernability

Economic Growth

DemocraticInstitutions

Poverty and ExclusionReduction

Poverty and Democracy

1. We cannot redistribute poverty: The final objective is not that everyone is equally poor.2. Economic growth is an indispensable (but insufficient) component for any poverty and

exclusion reduction strategy.3. Economic, social, political and legal stability are indispensable to attract national and

foreign capital investment.4. Within a market economy, there is a need for deliberate social policies and specific

projects targeted to the extremely poor.5. There is a high need for accountability on the part of governments at different levels.

Premises:

The conventional wisdom among most development economists and policy makers is that economic growth and increases in income levels are the key, and at times the only crucial, components for any poverty reduction strategy. The literature on this is abundant in Latin America as well as in USA, And Europe.

Less examined is the reverse proposition: That high levels of poverty and social exclusion may in fact constitute real impediments to achieve the needed social, economic, political, and legal stability for sustained economic growth and democratic governability in the region. This development process perspective recognizes the existence of “vicious circles” in which low economic growth accentuates poverty and high poverty, in turn, results in a low economic growth and fragile governability.

This study/book seeks to examine the ways and means to convert this “vicious circle” into “virtuous circle” in which poverty, exclusion/inequality reduction, and sustained economic growth could support each other and strengthen democracy, thus preventing the surge of irresponsible populism and destabilizing forces which undermine sustainable development.

Conceptual FrameworkConventional Wisdom

Economic GrowthPoverty & Inequality Reduction

Income Levels

Other Manifestations of Poverty

• Unemployment

• Infant Mortality

• Malnutrition

• Lack of access to quality health and education

• Vulnerability to economic crisis

• Ethnic social exclusion

Indigenous People: NewChallenges for the 21st Century

Democracies

1. Increase in access to quality health and education2. Assure effective social inclusion (particularly the indigenous population)3. Indigenous people of Latin America emerge with old inequalities diverse realities and new obligations for 21st century democracies.4. Regions impatient with the democracy5. High inequalities 6. Lack of availability of jobs,7. Rural, urban contrasts.8. Inclusion with mutual respect for cultural diversities.

From the Analysis and the Lectures

To the

Actions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Total Population By

Gender                    

Population By Age & Gender                    

Population By Urban & Rural

Areas By Gender                    

Childbirth Survival Rate                    

Global Rate Of Fecundity                    

Gross Birthrate                    

Gross Mortality Rate                    

Social Indicators [Demographics]

Sources: World Bank, UN, IDB, Academic Institutions

Social Agenda for Democracy in Lat. America

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Literacy Rate Age 15+ By

Gender                    

School Registration

Rate By Gender                    

Average Student/Teach

er Ratio                    

Public Expenditure In

Education                    

% Of Students Starting 1st

Grade & Finishing 5th                    

School Assistance In Urban Areas

Per Capita Per Income                    

Social Indicators [Education]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Mortality Rate Children Under 5 (UNICEF)                    

Child Mortality Rate                    

Maternal Mortality Rate                    

Underweight Rates Children Under 5 By

Gender                    

% Children Measles Vaccination (UNICEF-

OMS)                    

Childbirths Employing Specialized Sanitary

Personnel                    

HIV Prevalence For Mothers Age 15-24                    

Contraceptive Use By Married Women 15-49                    

Malaria Mortality Rate                    

Tuberculosis Mortality Rate                    

Inhabitants Per Doctor                    

Hospital Beds Per Inhabitants                    

Social Indicators [Health]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Occupied Housing According To Type Of

Possession By Urban & Rural Areas                    

Homes With Basic Services By Urban &

Rural Areas                    

Population With Sustainable Access To

Drinking Water Resources By Urban &

Rural Areas                    

Population With Access To Proper Drainage

Service By Urban Rural Areas                    

Social Indicators [Housing]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Rate Of Urban Unemployment (CEPAL)                    

Rate Of Youth Unemployment                    

Economically Active Population (EAP) By

Gender (CELADE-ILO)                    

EAP Growth Rate By Economic Activity

Sectors By Gender                    

Social Indicators [Employment]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Real Average Salaries                    

Wage-Earners Salaries As GDP                    

Real Minimum Wage                    

Monthly Nominal Minimum Wage In

National Currency To Current Prices                    

Social Indicators [Salaries]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Poverty & Indigency Coefficient Gap (CEPAL)                    

Coefficient Of Poverty Gap (WB)                    

Income Distribution By Quintiles By Geographic

Area (CEPAL)                    

Population In Poverty & Ingency Conditions By

Geographic Area                    

Population Living Under 1 Dollar and Under 2

Dollars Per Day (WB)                    

GINI Concentration Rate (CEPAL)                    

% Of Population Below Minimum Nutrition (FAO)                    

Daily Kilocalorie Consumption By Person                    

Social Indicators [Poverty/Income Distribution]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

GDP Per Inhabitant To Market Constant Prices

Of Market, Annual Variation Rates                    

CPI-Consumer Price Index                    

Social Public Expenditure Per Inhabitant                    

Social Public Expenditure As % Total Public

Expenditure                    

Social Indicators [Economy]

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Internet Users                    

Personal Computers In Use                    

Social Indicators [Technology]

Sources: World Bank, UN, IDB, Academic Institutions

2007 2008 2009 2010 2011 2012 … 2026 2027 2028

Population Growth Rate                    

GNI Per Capita                    

Adult Literacy                    

Life Expectancy At Birth                    

Child Mortality Rate                    

Fertility Rate                    

Adult HIV Prevlaence                    

Social Indicators [Health/Nutrition/Population]

Sources: World Bank, UN, IDB, Academic Institutions