What is the meaning of inclusion, when looking at it from the perspective of the World Development Report (WDR) 2017 on governance and law?
This figure of the WDR 2017 framework says it all, really. The report takes us into the political arena. It discusses the dynamics of drivers of effectiveness, levers for change and drivers of change that explains why we should rethink governance for development. As I think this is really worth doing, I am discussing the implications of the report in three updates.
The conceptual elasticity of “Inclusion” is a characteristic of many of the popular terms in development. What to think of: Resilience, Sustainability and Gender equality? Their strength is that we can all have our own perception of what the term refers to exactly, and then adopt it to fight for our own particular issues.
Let’s talk about the meaning of a distinct kind of inclusion: Financial Inclusion, in a distinct location: Indonesia. .
Financial inclusion for Indonesia has been defined as
“The right of every individual to have access to a full range of quality financial services in a timely, convenient, informed manner and at affordable cost in full respect of his/her personal dignity. Financial services are provided to all segments of society, with a particular attention to low-income poor, productive poor, migrant workers and people living in remote areas.” (Booklet Financial Inclusion, Bank Indonesia)
Its aim seems even more straight-forward
“To achieve a financial system that is accessible by all layers of the community to promote economic growth, poverty reduction and income equality in Indonesia”
This ambition has been worked out quite a few years ago now. It is based on the Global Partnership for Financial Inclusion that came together in 2010.
So what? You ask. In these past five years or so, the Indonesia government probably reached many of its goals in financial inclusion, hasn’t it?
The answer is negative, unfortunately, and illustrates the dynamics that power asymmetries and lack of commitment, coordination and cooperation can bring to the policy arena.
The role of the material and cultural foundations of institutions, their historical contingencies and the competition between different institutions at multiple levels in society is central to the Institutional Logics approach to social structures. In many ways, the WDR is not telling us anything new, it is just emphasizing the importance of structures and the role power asymmetries, coordination, commitment and collaboration play in achieving sustainable development outcomes.
When it comes to financial inclusion, the Institutional Logics approach would predict that change has to come from:
- a distinct mechanism of action
- that is triggered
- by the friction between society (institutions), organizations and individual agents.
And this friction between competing belief systems may lead to change by their effects on the cognition and behavior of actors (institutions, organizations and individual agents).
Now what about the Indonesian ambitions working on Financial Inclusion?
More on that in next part of the World Development 2017 comments.