Inclusive, sustainable economic transformation: an analysis of trends and trade-offs

Abstract

This article presents a typology to capture varying degrees of inclusive, sustainable economic transformation in low- and middle-income countries. We perform a cluster analysis of these pillars – poverty and inequality, environmental sustainability, and economic transformation – proxied by a set of quantitative indicators with data pooled between 2000 and 2018. This is supported by descriptive analysis of correlations in change over time between indicators as well as an exploration of the contextual risk and governance profiles underpinning these changes. From this analysis, we identify five clusters of countries with a range of outcomes across the three pillars. Countries consistently performing well across the three dimensions are not readily evident, though some countries are able to achieve moderate outcomes. Policy implications point to the need to get the basics right around pro-poor infrastructure development and making certain sectors greener in an effort to advance tripartite gains.