4.1 Institutions, markets and development: Working Out of Poverty
4.1 Institutions, markets and development: Working Out of Poverty
rules to making markets work for development, Nobel laureate Professor
Douglass North, has explained that societies evolve institutions to “reduce
uncertainty by providing a structure to everyday life”. He argues that this is
essential to organizing the productive division of labour and that “institutions
affect the performance of the economy by their effect on the costs of
exchange and production”. He also stresses that many of the rules guiding
daily behaviour are informal and that effective institutions for governing
markets are a blend of socially accepted norms and laws underpinned by
shared values.
The debate about how to generate and maintain pro-poor growth is increasingly
focusing on how to construct a framework of public and private
institutions that improves the functioning of the decentralized decisionmaking
that characterizes markets as well as the mechanisms available to
governments and communities for coordinating action for economic and
social goals.
The role of communities, or “social capital”, and the conditions
under which various forms of association contribute to improving the
situation of particular groups, notably the poor, and economic and social
performance in general have also attracted renewed interest.
In these debates
the term “governance” is used to mean the regulating influence of the
set of institutions, norms and policies that determine the functioning of an
economy and society. It is a wider concept than that of the structure of political
authority and government, and includes the role of a variety of public,
private and voluntary economic and social institutions.
The continued existence of poverty on a large scale shows that institutions,
including those that govern labour markets, are not performing well
for large numbers of people in many countries. Often worthwhile micro actions
targeted on the poor and macro strategies aimed at financial stability
are disconnected and fail to generate an overall pattern of steady growth that
helps the poorest most and reduces inequality. The challenge is to create formal
rules that mesh with the widely accepted values and evolving informal
norms to reduce uncertainty and mistrust, thus improving the functioning of
markets. The quality of the institutions that constitute the governance
framework for labour markets is central to strategies to promote productivity,
growth and sustainable development and ensure that poverty is reduced
and eventually eradicated.
The ILO’s decent work strategy offers an integrated framework for
promoting institutional change, founded on universal values, that can help
countries shape the governance of the labour market to promote opportunities
for women and men to obtain productive work in conditions of freedom,
equity, security and human dignity. This is a complex process, not least because
the institutions to solve today’s problems are built on those established
in the past. Since many institutions are deeply embedded in society, serve the
interests of powerful groups, and take time to change even if the circumstances in which they were originally formed have altered, formulating and
implementing new approaches are unlikely to proceed smoothly. There is no
single model applicable to all countries. Nevertheless, for most families the
main route out of poverty, and the key to reducing the risk of falling into
poverty, is decent and productive work for women and men. This focus provides
an agenda for building up a broad agreement on priorities for action.
A major challenge for the ILO is to help its constituents address the often
neglected issue of the governance of the labour market. As many as 4 billion
people, two-thirds of the world’s population, live largely outside formal
legal systems, mainly in developing and transition economies where poverty
is most severe. The most fundamental elements of a market economy, such
as respect for contracts and recognition of title to property, are often not
available to wage workers, self-employed workers or micro and small businesses
in the huge and growing informal economy.
Furthermore, employment
growth in the formal economy is sluggish in many countries, failing to
offer enough jobs to match the expansion of the labour force and the shakeout
of jobs in larger firms, especially state-owned and newly privatized enterprises.
41 Institutions markets and development Working Out of Poverty - To learn more about this author, visit International Labour Organization's Website.
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One of the leading thinkers about the importance of institutions and
rules to making markets work for development, Nobel laureate Professor
Douglass North, has explained that societies evolve institutions to “reduce
uncertainty by providing a structure to everyday life”. He argues that this is
essential to organizing the productive division of labour and that “institutions
affect the performance of the economy by their effect on the costs of
exchange and production”. He also stresses that many of the rules guiding
daily behaviour are informal and that effective institutions for governing
markets are a blend of socially accepted norms and laws underpinned by
shared values.
The debate about how to generate and maintain pro-poor growth is increasingly
focusing on how to construct a framework of public and private
institutions that improves the functioning of the decentralized decisionmaking
that characterizes markets as well as the mechanisms available to
governments and communities for coordinating action for economic and
social goals.
The role of communities, or “social capital”, and the conditions
under which various forms of association contribute to improving the
situation of particular groups, notably the poor, and economic and social
performance in general have also attracted renewed interest.
In these debates
the term “governance” is used to mean the regulating influence of the
set of institutions, norms and policies that determine the functioning of an
economy and society. It is a wider concept than that of the structure of political
authority and government, and includes the role of a variety of public,
private and voluntary economic and social institutions.
The continued existence of poverty on a large scale shows that institutions,
including those that govern labour markets, are not performing well
for large numbers of people in many countries. Often worthwhile micro actions
targeted on the poor and macro strategies aimed at financial stability
are disconnected and fail to generate an overall pattern of steady growth that
helps the poorest most and reduces inequality. The challenge is to create formal
rules that mesh with the widely accepted values and evolving informal
norms to reduce uncertainty and mistrust, thus improving the functioning of
markets. The quality of the institutions that constitute the governance
framework for labour markets is central to strategies to promote productivity,
growth and sustainable development and ensure that poverty is reduced
and eventually eradicated.
The ILO’s decent work strategy offers an integrated framework for
promoting institutional change, founded on universal values, that can help
countries shape the governance of the labour market to promote opportunities
for women and men to obtain productive work in conditions of freedom,
equity, security and human dignity. This is a complex process, not least because
the institutions to solve today’s problems are built on those established
in the past. Since many institutions are deeply embedded in society, serve the
interests of powerful groups, and take time to change even if the circumstances in which they were originally formed have altered, formulating and
implementing new approaches are unlikely to proceed smoothly. There is no
single model applicable to all countries. Nevertheless, for most families the
main route out of poverty, and the key to reducing the risk of falling into
poverty, is decent and productive work for women and men. This focus provides
an agenda for building up a broad agreement on priorities for action.
A major challenge for the ILO is to help its constituents address the often
neglected issue of the governance of the labour market. As many as 4 billion
people, two-thirds of the world’s population, live largely outside formal
legal systems, mainly in developing and transition economies where poverty
is most severe. The most fundamental elements of a market economy, such
as respect for contracts and recognition of title to property, are often not
available to wage workers, self-employed workers or micro and small businesses
in the huge and growing informal economy.
Furthermore, employment
growth in the formal economy is sluggish in many countries, failing to
offer enough jobs to match the expansion of the labour force and the shakeout
of jobs in larger firms, especially state-owned and newly privatized enterprises.
41 Institutions markets and development Working Out of Poverty - To learn more about this author, visit International Labour Organization's Website.
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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