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views expressed on this listserv are those of the individuals posting the statement
and
do not necessarily reflect the views of the Ohio Employee Ownership Center
or Kent State University. COORDINATOR:
Ravi Naidoo REGISTRATION:
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Discussion to Date.
This working group focuses on ownership strategies that can promote
poverty reduction in developing countries. It has been established -- with the
support of the Capital Ownership Group (COG) hosted at Kent State University with
funding from the Ford Foundation -- to encourage informed debate, exchange of
information and consciousness-raising among scholars and within related academic
disciplines and the wider community.
Poverty reduction remains the biggest
challenge facing "developing" countries. Orthodox structural adjustment
programmes, not surprisingly, have failed to reduce poverty. Indeed in many instances,
poverty and inequality have increased. There is thus renewed interest in making
poverty reduction a central policy goal. Numerous global summits have resulted
in agreement on several Millennium Development Goals (MDGs), focused on poverty.
Even the International Monetary Fund/ World Bank have felt the need to require
the world's poorest countries to develop Poverty Reduction Strategy Papers (PRSPs).
While the qualitative differences that emerge out of these poverty-focused approaches
remain to be seen, poverty has nonetheless returned to the centre-stage.
In this context, what can ownership strategies contribute to poverty reduction
in developing countries?
We know that an unequal distribution of assets
is an important determinant of the economic attributes of poverty because it denies
the poor access to factors of production. Not only does the distribution of assets
deny the excluded access to economic resources, it also facilitates the exploitation
of the excluded by perpetuating unequal economic power relations. A skewed distribution
of asset ownership creates a socially constructed scarcity that increases the
economic power of the asset owners. This scarcity allows the asset holders (for
example, home owners) to generate a higher income (such as rent). The same would
apply to other forms of assets, such as credit and financial assets, where if
people had access to abundant credit, the ability to charge high rates of interest
would be compromised. Therefore contrary to orthodox economic theory, the distribution
of income is not related simply to the productivity of the assets, but also to
its scarcity. Clearly, asset distribution must form part of a broader analysis
of poverty, and policies of asset redistribution must be considered as a core
element of a strategy to reduce poverty.
What
constitutes appropriate ownership distribution strategies for developing countries?
While most COG focus has been on employee ownership, we need to consider strategies
that can work in the context of extensive informal economy activity. This could
include co-operatives, land redistribution, access to affordable credit, and so
on. Nonetheless formal sector strategies (such as employee ownership) remain important
components of a total ownership distribution strategy, depending on the proportion
and structure of formal employment in the economy.
This working group
could start by discussing the broad range of ownership strategies that can be
followed by developing/ poor countries. Some discussion, based on international
experience, on what strategies could work well in what environments would be a
useful start. The same goes for discussions on what hasn't worked, and why? In
short, it would make sense to start the discussion with a fairly wide scope and
identify worthwhile issues for more focused discussion. |