Participatory Equity, Identity, and Productivity: Policy Implications for Promoting Development

CAE Working Paper No. 06-06

34 Pages Posted: 17 Jan 2007

See all articles by Kaushik Basu

Kaushik Basu

Cornell University - Department of Economics; IZA Institute of Labor Economics; Brookings Institution

Date Written: May 2006


The role of a person's identity and sense of integration into society as instruments of economic development has been vastly underestimated in the literature in economics. We talk of policies to subsidize the poor and give direct support to alleviate poverty. But in the long run, what is critical is that we instill in people a sense of belonging and having certain basic rights as citizens. What the poor and the marginalized in society lack is a sense of participatory equity. This paper tries to advance this perspective by building a new model where a person's community identity matters, ex post, in determining if he or she will be poor, even though (unlike in the Spence model) all persons are identical ex ante. The paper also draws on data collected from an NGO-run school in Calcutta to illustrate the role of a school child's sense of 'belonging' in determining how the child performs academically. The theory and the empirical work are inputs into the larger and more general idea that when people feel marginalized in a society, they tend to 'give up'. A substantial part of the paper is devoted to the policy implications of these analytical ideas and the empirical results in the context of national policies and globalization.

Keywords: social integration, poverty, participatory equity, community identity

JEL Classification: D20, D30, O12, D60, Z10

Suggested Citation

Basu, Kaushik, Participatory Equity, Identity, and Productivity: Policy Implications for Promoting Development (May 2006). CAE Working Paper No. 06-06. Available at SSRN: or

Kaushik Basu (Contact Author)

Cornell University - Department of Economics ( email )

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IZA Institute of Labor Economics

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Brookings Institution ( email )

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