Asset-Centred Redistributive Policies for Sustainable Development

The objective of this discussion paper is to propose an asset-centred analytical framework for (i) mapping the most important redistributive policy tools that shape the distribution of income and income-generating assets (such as human capital and wealth, including land, industrial or financial capital) across individuals as well as between the private and the public sector and (ii) outlining key linkages between redistributive policies, equity and sustainable development by looking at how they can shape a socio-economic context and incentives that are conducive to financial stability and economic development, political inclusion, gender equality and social mobility, as well as environmental sustainability. The paper further aims at (iii) contrasting the potential scope of redistributive policies with the more narrow set of policies that have been implemented in most countries/regions over the last 30 years in order to (iv) derive recommendations for redistributive policies in support of greater equity and sustainable development in the post-2015 context. Conceptualizing redistributive policies from a stock-flow perspective reveals an artificial blind spot of the prevailing approach to redistribution and development: wealth redistribution. The prevailing approach generally covers income redistribution and the provision of public goods as a means to foster human capital accumulation (e.g., the MDGs approach), but it ignores wealth redistribution. This omission impoverishes the understanding of redistribution and hampers the design of redistributive policies in pursuit of development objectives (e.g., efficient taxation, progressive and increased revenue mobilization, poverty reduction, equality of opportunity, etc.). Furthermore, conceptualizing redistributive policies in light of their linkages to equity and sustainable development is increasingly needed given the upcoming transition from the MDGs to SDGs in a context characterised by sustainability challenges, such as rising income inequality, wealth concentration and growing carbon emissions. In this regard, an asset-centred model allows thinking beyond redistributive policy options affecting production and consumption incentives (e.g., progressive environmental taxes) in order to consider possible asset transfers between the private and public sector (e.g., socialization of natural resource ownership, etc.). Based on these premises, this paper suggests a number of steps for developing a more comprehensive approach to redistribution and moving towards a framework enabling asset-centred redistributive policies for greater equity, economic democracy and sustainable development.