In our economy, inclusive institutions are those that make the world go around. Without inclusivity, the bulk of our population is left out of the opportunity to pursue economic prosperity.
Non-inclusive institutions are those that limit the opportunities of those that work within them. For example, in the past, slave-based institutions were major examples of non-inclusive institutions.
The owners put slaves to work, and as a result, they got richer and richer. But the slaves themselves weren’t not achieving any degree of prosperity. They weren’t advancing in their fields, earning more money, or getting any freedoms, rights, or privileges as a result of their hard work.
Today, while we are free of this terrible system, we still see the effects of extractive institutions in society. Keep reading to learn the difference between inclusive vs extractive institutions, and what helps the economy to actually grow.
Why Poverty Exists
Countries in the West, such as Europe and the US, are much, much richer than many in the Caribbean, Africa, and Asia. While there are many factors that contribute to this, one of the biggest issues is the lack of inclusive institutions.
In many of these nations, there simply isn’t enough opportunity to pursue economic prosperity. There aren’t as many incentives for innovating, investing, and educating.
In the West, those who receive the most education can pave the way to a brighter future. Those who take risks on their own, or within existing organizations, can be rewarded financially, with influence, and with the opportunity to help others achieve more as well.
But it’s not like that everywhere. And even many organizations in the West fail to provide true opportunities and incentives to the masses.
What are Inclusive Institutions?
Inclusive institutions are those that seek to do the best, for the largest amount of the population. They are the key to lowering and eventually eliminating poverty.
They provide equal opportunity to anyone, regardless of their socioeconomic status. This means that almost anyone, however rich or poor, educated or noneducated, can get a job here and start earning an income.
But it doesn’t end with equal opportunity hiring practices. The key to inclusive institutions is the opportunity to grow and the incentive to work hard. They give people the opportunity to advance and go as far as they want to go.
Within these organizations, there aren’t limits placed on people. There is simply an opportunity available for those who would choose to grab hold of it.
How to Promote Equality and Opportunity With Inclusive Institutions
Promoting the rights and opportunities for the masses happens every day. It depends on how we vote, how we shop, and where we work.
Organizations in the west, traditionally dominated by elitism, are slowly becoming more and more open. They are breaking down the barriers of entry and oppression and encouraging a greater level of participation.
We need to continue to hold these larger institutions accountable, particularly those that employ the greatest number of the population.
Build Bridges, Not Walls
As you can see, inclusive institutions seek to help the greater population. A nation will fail if the majority of the population is stuck in poverty without opportunity.
As the line between the rich and the poor in many nations gets bigger, we need to be building bridges in our organizations, not walls.
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