5. Tackling Inequality and Social Justice: A Global Imperative

A second major weakness of traditional economic policy is the continuing lack of effective programs to make income distribution within and between countries fairer. Many distinguished economists and philosophers have strongly advocated action to target inequitable distribution, but their recommendations have made little headway against the resistance of political and practical status quo. Chapter 5 reviews the recently renewed concerns with inequality within and among nations, particularly focusing on the plight of developing countries. For advanced countries, rising inequality in recent decades has become more apparent and is problematic for all OECD countries. Some have implemented effective social welfare policies to counter these effects, but all must recognize and adapt to the global and national impact of technological change and globalization. The recent work of Thomas Piketty and Joseph Stiglitz arguing for this direction of effort is particularly important. Developing countries, particularly in sub-Saharan Africa, face much graver problems than OECD countries and have much less capacity to tackle them. The chapter makes the case that the driving aim of aid for less developed countries, regions and populations should be to promote PFM capacity and responsibility of national government as a basis for sustainable development and fulfillment of the UN Sustainable Development Goals, aimed among other things at alleviating poverty. But so far, aid under these initiatives has been relatively ineffective, Modern technology combined with application of international standards of PFM practice can do much to empower developing and emerging market countries. Ghanaian experience over two decades is used to illustrate both the severe problems and the possibilities of success within a national PFM reform strategic framework. Project and program failure in this area will have major consequences not only for the least developed countries but for global security and prosperity.