Exclusion and Initiatives to ‘Include’: Revisiting Basic Economics to Guide Development Practice

Exclusion and Initiatives to ‘Include’: Revisiting Basic Economics to Guide Development Practice
Chapter 3

Sajjad Zohir

Literature on the ‘economics of exclusion’ typically addresses competition and the anti-trust laws of developed economies, not the ‘exclusion’ that development practitioners are concerned about. When economists do engage in the discourse on exclusion in development, they typically deal with poverty and deprivation without always applying the basic analytical tools available in economics (Sen 2000; Osmani 2003). In this chapter I make an effort to reconstruct the definition of exclusion and its various facets by applying a set of principles that underlie economic analyses. Though poverty is not directly dealt with in this paper, it is hoped that a concept of exclusion defined within the allegedly ‘narrow’ construct of economics can be ‘broad’ enough to encompass real deprivation, and provide additional insight into our understanding of the marginality that underlies the poverty observed in society.

This chapter focuses on exclusion. It reconstructs the definition of exclusion and its various facets by applying a set of principles that underlie economic analyses. The analysis reveals that many initiatives to reduce exclusion under the umbrella of safety nets often lead to the introduction of differentiated products in segmented markets that may actually contribute to the perpetuation of differentiations within a population. The relations between contracts, goods and services, and exclusions are highlighted.

A typology of exclusion is described by the author with the help of a supply and demand analysis of services, including: voluntary exclusion, exclusion due to a lack of awareness, exclusion for survival, exclusion due to a lack of demand, and exclusion caused by “distance” such as social exclusion or poor connectivity.

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