Linking Social and Productive Development Policies for Inclusive Growth: A Program of Research and Capacity Building

Peru is one of the fastest growing economies in Latin America, but Peruvians continue to face large disparities in incomes, opportunities, and access to public services. While poverty has declined sharply, more than half of rural Peruvians remain poor. Peru has a highly heterogeneous economy, with Andean peasants working on tiny plots using archaic techniques, while export-oriented firms use modern technologies. The vast differences imply that productivity and incomes differ dramatically. Further economic growth in Peru is unlikely to significantly reduce these disparities. The new Peruvian Ministry of Development and Social Inclusion's (MIDIS) mandate is to achieve "economic growth with social inclusion." The ministry is tasked with pursuing pro-poor policies. It is also trying to enhance the effectiveness of social protection programs. Linking social protection with other federal, regional, and private sector productive development programs could enhance sustainability and reduce dependency on social grants. The region is testing different policies and programs to: -improve coordination of public social and productive development investments; -ensure that public spending improves people's welfare; and, -reduce dependence on social grants. There is little evidence to show what works in this context. This research project will address that knowledge and policy gap. The Consortium for Economic and Social Research (CIES - Consorcio de Investigación Económica y Social), a network of 48 research institutions across Peru, will lead the project. CIES will fund social and economic research with a focus on the linkages between social protection and productive development programs. The overall objective is to improve existing approaches in order to positively influence the livelihoods of Peru's most vulnerable. The funding will support the CIES annual research competition which responds to policy priorities related to small- and medium-sized enterprises, rural development, access to employment, and social protection. The project will strengthen research centres' capacity outside of Lima, specifically in Piura (coast) and Arequipa (Andes), by fostering partnerships among researchers located in these regions. This project combines research, policy outreach, and capacity building activities. It also promotes raising funds from other sources to ensure long-term sustainability for these types of initiatives. The project team will share its research outputs with MIDIS, the Ministry of Agriculture, regional governments, and other key stakeholders as a way of strengthening the linkages between knowledge and policy.