Inclusive Infrastructure / Overview
Many countries are looking for ways to ensure that every member of society has the chance to benefit from economic growth. As part of this, they are examining the role that infrastructure has in achieving that goal.
Inclusivity in infrastructure is quickly becoming a key consideration for many governments of both developed and developing nations. This is supported by the international community through the Sustainable Development Goals (SDGs), as well as international conventions. The G20 has had a long-standing focus on infrastructure, and social inclusion is considered to be a key component in the definition of Quality Infrastructure, a priority of the Government of Japan which has the Presidency of the G20 in 2019.
Benefits generated by inclusive infrastructure include reduced inequalities and disparities, which provide the stability to not only boost but also sustain economic growth and social equity in the long-term. However, these benefits can only be achieved if the concept of inclusive infrastructure is implemented in an effective manner.
There is a clear need for a concerted effort to advance the understanding of how best to achieve inclusive infrastructure, in both developed and emerging markets. The initiative by the GI Hub to develop a Reference Tool responds to this need to define and raise awareness of inclusive infrastructure, as well as share best practices to ensure faster and improved implementation of the concept.
The overall aim of the Inclusive Infrastructure Reference Tool is to provide practical guidance for governments to help them maximise the inclusivity benefits of their large-scale infrastructure projects. It is intended to be used when developing policy, and planning, designing and implementing such projects, so that the projects help to reduce inequality and promote shared prosperity.
The GI Hub set the following objectives for this project:
The Reference Tool is primarily designed for use by government representatives who have an interest in, or mandate to, maximise inclusivity in large-scale infrastructure projects. It is also available to other entities interested in inclusive infrastructure, such as the multilateral and bilateral development banks, the private sector, civil society organisations, academic institutions and the wider public.
The Reference Tool is meant to serve as a practical tool to help governments and other stakeholders understand and implement the critical success factors that deliver inclusive infrastructure. Accordingly, it provides an actionable framework and practical recommendations based on relevant literature, as well as live project examples and case studies.
The framework and recommendations are deliberately broad, so that the principles and insights can be applied widely in both developed countries and emerging markets, and across different sectors of economic and social infrastructure. Similarly, the Reference Tool has been designed to provide guidance applicable both to projects that are traditionally procured (i.e. ‘public works’ projects) and those that have a greater degree of private sector participation (such as public-private partnerships).
It should also be noted that some practices featured in the tool may not be specific to inclusivity but are mentioned because they form the necessary building blocks to ensure the successful implementation of inclusive infrastructure projects.
The infrastructure sectors covered in this tool are the following:
As a final comment in regard to the scope of the Reference Tool, it is important to emphasise that it deliberately does not focus on the various measures that are used to minimise the negative environmental and social aspects of infrastructure projects, including measures such as the environmental and social ‘safeguard’ policies established by multilateral development banks. Instead, this tool is concerned with the positive steps that can be taken to enhance the benefits of such projects, by adopting and effectively implementing principles of inclusivity.
The Reference Tool document is structured in four main sections:
As a first step towards greater acceptance of the concept and the benefits of inclusive infrastructure, there is a need to establish a clear definition to be used by practitioners. In this tool, inclusive infrastructure is defined as follows:
The Framework for Inclusive Infrastructure summarises the following six Actions Areas and related practices that ought to be considered for the systematic implementation of inclusivity in infrastructure at the policy and project levels:
The following descriptions summarise each Action Area.
All Action Areas need to be carefully considered and implemented to maximise the benefits of the project, on the basis that some of them will be more relevant to particular sectors and economies. Their application will vary depending on geographical context, project circumstances, profile of the stakeholders, level of capacity, governance arrangements, available standards, participation of the private sector and the stage in the project lifecycle.
The analysis and guidance presented in this Reference Tool aim to help governments accelerate the development and implementation of inclusive infrastructure policies and projects.
The Framework for Inclusive Infrastructure presented in this Reference Tool identifies six key pillars driving inclusive growth. The six key pillars, i.e. the Action Areas”, are then discussed in detail, in a manner that allows governments to identify potential initiatives at policy, program and project levels.
Critical success factors include:
The eight case studies presented of this Reference Tool illustrate the challenges faced by many groups in society in regard to access to infrastructure services, and successful efforts in addressing those challenges, such as the initiatives taken in connection with Peru’s El Metropolitano BRT system to deal with the problem of harassment faced by women using public transport. As outlined in the report, inclusive infrastructure is a concept that is evolving, and that will likely continue to do so. The following paragraphs present some of the areas for further development, to promote learning on maximising the benefits from inclusive infrastructure. The GI Hub hopes that this Reference Tool will be a stimulus to further discussion of this topic, and very much welcomes any reader feedback and suggestions.
Defining the relationship between inclusivity and sustainability
Much of the current literature refers to “inclusive and sustainable” infrastructure in one breath. The two terms are, of course, closely linked, but there is a need to better distinguish and define the relationship between inclusivity and sustainability. Sustainability deals with challenges such as environmental impacts, climate change and disaster resilience, which, in many instances, disproportionately affect vulnerable groups of people. Accordingly, addressing these issues as part of the wider inclusivity agenda can help to ensure that vulnerable segments of the population are identified, and appropriate mitigation measures are put in place.
In June 2019, the G20 Leaders endorsed the Principles of Quality Infrastructure Investment, one of which is 'Integrating social considerations in infrastructure investment', providing the opportunity to more clearly define this relationship and reference relevant supporting resources.
Accordingly, the QII Database was developed in collaboration with the GI Hub, the OECD and the World Bank and includes resources and facilities relevant to Quality Infrastructure Investment under the Principles for Quality Infrastructure Investment - sustainable growth and development, economic efficiency, environmental considerations, building resilience, social considerations and infrastructure governance.
Establish new success measurement and monitoring for inclusive development
While economic growth has been an important driver in reducing poverty, governments are identifying a need to go beyond a definition of socioeconomic development that reflects only the systematic use of GDP growth. In response to concerns about increasing income gaps, distrust in public institutions, disruption of political stability and civil unrest, some governments and international financial institutions have begun to explore the use of inclusive infrastructure to help address these broader concerns.
To measure inclusive development, some new metrics have been proposed, but these new metrics still need to be further evaluated and quantified. An example is the recent Inclusive Development Index (IDI) developed by the World Economic Forum. The IDI conveys a more integrated sense of the relative state of economic development and performance than the conventional indicators based on GDP per capita. It ranks countries based on their performance of making their growth more inclusive.
Additional inclusive development indicators could help provide the evidence base for monitoring the wider impacts of infrastructure programs and projects.
In addition, new indicators could help to assess the ability of such programs and projects to contribute towards the achievement of the UN Sustainable Development Goals.
Further define inclusivity KPIs at infrastructure project level, and monitor inclusivity benefits
The alignment of private sector incentives with objectives around inclusion is discussed in Action Area 5 of the Reference Tool. To achieve this alignment in the case of public-private partnership transactions, careful consideration needs to be given to the output specifications and measurable KPIs that governments develop for each infrastructure project. Additional guidance on this topic will be provided in the forthcoming GI Hub guidance note on Output Specifications for Quality Infrastructure PPPs.
Improvements in monitoring the benefits of inclusive infrastructure would also strengthen the understanding of their value, thereby enabling better quantification of benefits in the business cases of future infrastructure projects. Currently, the lack of reliable data quantifying the benefits of inclusivity is a common issue across virtually all infrastructure sectors.
Making inclusive infrastructure attractive to social impact investors
The potential role of social impact investment in infrastructure has not been fully examined, since many social impact investment programs have, to date, focused on smaller community initiatives rather than large infrastructure projects. Increasingly, however, infrastructure investors are becoming concerned with economic, social and governance (ESG) issues, and this may lead to more social impact investing in infrastructure. In the business case for inclusive infrastructure projects, a social dimension complements the economic and financial dimensions and this complementarity may be particularly attractive to social impact investors.
The Inclusive Growth and Development Report (World Economic Forum, 2017)
The consultative version of this tool is available on the GI Hub website, as will be the case for the final version of the tool (https://www.gihub.org).
Social impact investment, also known as sustainable, socially conscious, socially responsible, ‘green’ or ethical investing, is an investment strategy which seeks to maximise social benefits while also considering financial returns.