Rethinking Economic Policy for Social Justice

The radical potential of human rights

Radhika Balakrishnan, James Heintz, Diane Elson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317572114
• Edition: 1
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

The dominant approach to economic policy has so far failed to adequately address the pressing challenges the world faces today: extreme poverty, widespread joblessness and precarious employment, burgeoning inequality, and large-scale environmental threats. This message was brought home forcibly by the 2008 global economic crisis.

Rethinking Economic Policy for Social Justice shows how human rights have the potential to transform economic thinking and policy-making with far-reaching consequences for social justice. The authors make the case for a new normative and analytical framework, based on a broader range of objectives which have the potential to increase the substantive freedoms and choices people enjoy in the course of their lives and not on not upon narrow goals such as the growth of gross domestic product. The book covers a range of issues including inequality, fiscal and monetary policy, international development assistance, financial markets, globalization, and economic instability. This new approach allows for a complex interaction between individual rights, collective rights and collective action, as well as encompassing a legal framework which offers formal mechanisms through which unjust policy can be protested.

This highly original and accessible book will be essential reading for human rights advocates, economists, policy-makers and those working on questions of social justice.

1 The radical potential of human rights

Extreme poverty, widespread joblessness, burgeoning inequality, and large-scale environmental threats—addressing these pressing problems requires rethinking economics and economic policy. Yet current approaches to economic policy are not up to this task. Almost everywhere, macroeconomic policy focuses on a handful of narrow goals, such as the growth of gross domestic product or keeping inflation excessively low. A human rights focus provides an alternative normative and evaluative framework that stresses a broader range of objectives that increase the substantive freedoms and choices people enjoy in their lives. These rights include the right to food, the right to work, the right to an adequate standard of living, the right to housing, and the right to education, among others. States have obligations to realize these rights.

Mainstream economics relies on markets to solve the world’s problems. It argues that if people and businesses interact in competitive markets, then the most efficient outcome will be achieved. It does not claim that competition will achieve equitable outcomes or a fair distribution of income, but proposes that, by maximizing efficiency, there will be enough gains for winners to compensate losers, should society decide to do so. According to this view, the main purpose of government policy should be to create conditions that allow markets to function efficiently.

But not all economists are the same. Some economists remain skeptical about markets’ ability to use resources efficiently. They argue that markets often fail and, in the face of these failures, require corrective action by government. For example, discussions over the causes of the financial and economic crises have centered on the weaknesses of poorly regulated financial markets, and the consequences for society when markets systematically fail (Cassidy 2010). Other economists go beyond money metrics to focus on achievements in capabilities—what people are able to be and do in their lives, such as the capability to be healthy and the capability to read and write.¹ Still others are concerned about the distributive outcomes of economic policies, including the impact on the concentration of income and wealth, gender inequalities, and the vulnerabilities people face.

This book argues that the human rights approach constitutes an alternative evaluative and ethical framework for assessing economic policies and outcomes. The goals of social justice are expressed in terms of the realization of rights—both civil and political rights and also economic, social, and cultural rights. The human rights approach allows for a complex interaction between individual rights, collective rights, and collective action. It sees policy as a social and political process that should conform to human rights standards, not as a purely technocratic exercise. It incorporates an understanding of the paradoxical character of the state, recognizing that states can both enable and deny social justice and that individuals need protection against misuse of state power, as well as requiring the power of the state to be harnessed to realize individual rights. It encompasses a legal framework and provides formal mechanisms through which unjust policy can be contested.

The human rights framework is an evolving one, open-ended rather than closed, and facilitates ongoing discussion and deliberation to address underdeveloped areas and potential deficiencies. The application of human rights treaties to specific contexts and new issues is continually developed by UN human rights treaty bodies, independent experts, academics, and human rights activists. Many human rights principles have potentially important implications for economic governance, yet these possibilities have been underexplored. This book contributes to the process of further developing the human rights framework by exploring the potential it has for transforming the social and economic order within which we live.

Human rights as a framework for social justice

Beginning with the 1948 Universal Declaration of Human Rights (UDHR), followed by the treaties, declarations, and reports stemming from it, human rights have developed through international processes of public reasoning, involving people from all parts of the world. They include not only civil and political rights but also economic, social, and cultural rights. These rights are universal in the sense that they are for everyone—for instance they are for immigrants as well as citizens. These rights are indivisible and interdependent in the sense that civil and political rights cannot be fully secured without guaranteeing the fulfillment of economic, social, and cultural rights, and vice versa. It does not make sense to consider a single right, such as the right to freedom of expression,² in isolation. How can freedom of expression be fully realized when some people are denied their right to education?³ Civil and political rights are essential if governments are to be held to account for their responsibilities to realize economic, social, and cultural rights.

Human rights emphasizes the principle of non-discrimination and equality, addressing specific disadvantages and vulnerabilities based on race, color, sex, language, religion, political or other opinion, national or social origin, property, birth, or other status. The concern with equality extends beyond formal legal equality. A powerful dimension of the human rights framework is that it recognizes the need for substantive equality and that all aspects of people’s lives need to be taken into consideration when ensuring that everyone in practice enjoys the same rights and freedoms.

This book focuses primarily on economic and social rights, while recognizing their interdependence with civil and political rights. Economic and social rights are a key part of international law, and they have a strong institutional foundation in the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Convention on the Elimination of All Forms of Racial Discrimination (CERD), and the UN Declaration on the Right to Development (UNDRD), among others. Some countries—for instance, South Africa—have incorporated these rights into their national constitutions. The majority of the world’s countries also have national human rights institutions.⁴ Some regions, such as Latin America, have set up regional human rights bodies that include protection of economic and social rights as part of their mandate.

The human rights framework allows us to move beyond a narrow focus on GDP or income when evaluating economic outcomes. Instead, the human rights framework stresses the progressive realization of economic and social rights over time. The idea of progressive realization replaces GDP growth as the measure of social progress. Advances in social justice are achieved when the enjoyment of the rights to an adequate standard of living, education, health, work, and social security improves over time.

Governments can use markets to advance human rights as long as the functioning of markets does not undermine the state’s human rights obligations. In mainstream economics, markets are the star players. In the human rights approach, they play a supporting role. To a large extent, this reflects different social objectives and normative frameworks used to evaluate economic policies and institutions. Human rights focuses on progressive improvements in a range of social outcomes, with efficiency being important only insofar as it leads to the greater enjoyment of rights.

Although the human rights framework gives us an alternative to GDP for evaluating outcomes, it does not provide a full prioritization of policy alternatives. Instead, the human rights approach offers guidance in the process of prioritizing alternatives. For example, rights should be progressively realized and steps should be taken to prevent any movement backward in the enjoyment of any particular right. Similarly, the principles of non-discrimination and equality guard against policies that have biased outcomes. However, even when the full array of human rights principles are observed, choices between alternatives must be made. Suppose a government is fully complying with its human rights obligations and suddenly experiences an increase in revenues. Should these resources be spent improving education or health outcomes? Should they be used to reduce debt?

In these cases, the human rights framework does not tell governments which choices are the best. Instead, the state is required to set priorities through a democratically accountable process, while ensuring that its core human rights obligations are met. Securing and protecting civil and political rights are essential for democratic processes to work.

In evaluating economic policy choices, most economists have not engaged with the valuable contribution that the human rights framework can make to the achievement of social justice. An exception is the economist Amartya Sen who has argued that human rights can be seen as ethical criteria for evaluating economic outcomes (Sen 2004; 2009). Sen argues that a human rights approach goes beyond a focus on capabilities alone. It identifies, through a process of public reasoning, which capabilities are to have priority, posing them as rights. It emphasizes that there are obligations to realize these rights, both on the part of individuals and states; and it emphasizes that the procedures adopted to realize the rights must meet certain criteria, such as being equitable (Ibid.).

Therefore, the human rights approach not only provides a normative framework but also procedures for contesting unjust policies that fail to realize rights. These procedures go well beyond juridical processes, although where human rights have been included in constitutions and enacted in national laws, juridical procedures can be used, and an increasing number of cases which pertain to economic and social rights and fiscal policy are being brought to national courts. For instance, in South Africa a case was taken to the Constitutional Court relating to the allocation of resources for housing poor people. The lead plaintiff was Irene Grootboom, who, like many other extremely poor people in Western Cape Province, had nowhere to live. It was claimed that the municipality was failing to provide adequate access to housing. The case was based on two provisions of South Africa’s constitution: Section 26, which states that “everyone has right of access to adequate housing” and that the state “must take reasonable legislative and other measures, within its available resources, to achieve progressive realization of this right,” and Section 28 (1)(c), which says that children have a right to shelter (Elson 2006).

The case was heard by the South African Constitutional Court, which found that the state’s housing program could not be considered reasonable if it did not address the needs of those in extreme conditions of poverty and homelessness. The Court noted that “effective implementation requires at least adequate budgetary support by national government” within the state’s available resources. The Court clarified that all three levels of government—national, provincial and local—have obligations to realize the rights to housing. The response of the national government was to develop policy guidelines for the provision of emergency housing and to require the provincial governments to reserve between 0.5 and 0.75 percent of their housing budgets as a contingency fund to meet emergency housing needs (Elson 2006).

In addition, there are many other mechanisms available to hold governments accountable to their human rights obligations. Countries that have ratified a human rights convention are reviewed periodically by international committees of independent experts, who encourage signatories to uphold their international obligations. The Universal Periodic Review (UPR), a peer-review process among members of the United Nations Human Rights Council, examines human rights records across the globe—including countries like the United States who have not ratified many human rights treaties.

The human rights infrastructure can be a powerful advocacy tool with great potential to change policy-making, but only if governments’ responsibilities are taken seriously. To realize a vision of an economic system whose purpose is to meet human rights obligations, there is a need to rethink the ways we formulate and evaluate economic policy.

The paradox of the state: duty bearer and arena for struggle

The human rights approach recognizes the complexity of the relation between the state and the people: human rights protect individuals against state action that would violate rights, but state action is also required to fully realize rights. In the human rights framework, the state has the primary responsibility for respecting, promoting, and fulfilling rights. This does not mean that the state is responsible for direct provisioning of all the goods and services that support the realization of rights. The realization of the right to housing does not imply that the state is obligated to supply housing directly, but rather to ensure that public and private institutions work together towards fulfilling the right to housing. The fact that the state is the primary duty bearer does not preclude other institutions—including markets—from playing a central role. However, the state is obligated to take the necessary steps, through policy, legislation, and the judiciary, to support the realization of rights.

These obligations are best discharged by states that are strong, independent of vested interests, well-functioning, and accountable. In practice, of course, there are weak states with limited capacity to secure and protect the enjoyment of rights. Smaller, more dependent economies often lack the policy space to support the realization of rights. Global institutions—like the International Monetary Fund (IMF)—have imposed conditionalities on governments that limit their autonomy and their capacity to meet their obligations.⁵ Other states may be strong but have limited democratic accountability. Governments may not make independent decisions, but rather are subject to capture by specific interest groups.

Economic elites and corporate interests can influence government policy and undermine the ability of states to take independent decisions and to be democratically accountable. This can be exa...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• Acknowledgements
• List of abbreviations
• 1 The radical potential of human rights
• 2 The human rights framework and economic policy
• 3 What does inequality have to do with human rights?
• 4 A human rights approach to government spending and taxation
• 5 Mobilizing resources to realize rights: debt, aid, and monetary policy
• 6 Financialization, credit markets, and human rights
• 7 Extraterritorial obligations, human rights, and economic governance
• 8 Economic crises and human rights
• Conclusion
• Index