Economics 101: What Are Inclusive Institutions?

Jeff Bezos is worth around $177 billion, mostly in hard assets like stocks and bonds. With that wealth, he can impact the world in so many ways. There is one problem — he isn’t part of an inclusive institution.

Since he got his wealth in institutions made for profit, he doesn’t share. Wealth is not distributed be people who aren’t a part of inclusive institutions, it does not trickle down by people who exploit others. If there were more inclusive institutions though, more people in the world may have brighter futures.

If he made his money in an economic institution that values community wellbeing, people would likely be able to share in that wealth. They would be able to pursue their dreams knowing they would have a place to sleep at night. And because of that, the economy would thrive.

Keep reading below to learn more about how inclusive institutions help the economy, and why they are so important.

What Are Inclusive Institutions?

An inclusive institution is any large-scale institution that actively tries to distribute wealth across an economy. These kinds of institutions affect everyone regardless of race, gender, socioeconomic status, and sometimes even their nation. Academics have started to be interested in them.

It’s important to realize that inclusive institutions are rarely single organizations. Instead, they are usually made up of many different groups working towards similar goals. Take the institution of media, for example.

In a nutshell, media landscapes are made up of many different kinds of companies and reporters. Every person who picks up a pen as a journalist can affect that landscape and help their company. At the same time, they are participating in the institution of media and furthering its overall communication goals.

Within the overall media institution, there are inclusive institutions. These are usually companies focused on reporting about economic development. Through their reporting, they help ensure wealth is distributed across a country, instead of staying in rich people’s hands.

Inclusive Economic Institutions Drive Economic Growth

These kinds of institutions are actually responsible for ensuring economies continue growing. For an economy to be successful, everyone in it needs to make money. They need to be able to grow wealth and pass that money down to the next generation.

Average people can’t do it in most capitalist countries, with policies that allow markets to run free. In these kinds of economies, like the United States’ economy, poor people stay poor. It hinders economic growth, hurting everyone in the end.

But inclusive institutions in the U.S. economy help ensure a little wealth is distributed. For example, nonprofits help ensure that, on rare occasions, workers who pay most of their incomes towards rent can one day own a house. And that kind of economic progress improves the nation’s economy as a whole.

Experts Say Inclusive Institutions Help the Economy

Some people who spend their whole careers studying economics, like James Robinson, actually advocate for inclusive institutions. He argues that inclusive institutions help extend life expectancy and make economies more sustainable. He also argues they can resolve political conflicts.

Since most political conflicts are economic at their core, inclusive institutions can prevent them from developing into extreme issues. They can make sure militaristic political groups don’t form out of desperation among communities. These institutions help make sure people see some glimmer of a future, helping nations continue living.

Advocate For Inclusive Institutions

If you want to support your community and transform your economy, you should advocate for inclusive institutions. These kinds of large-scale movements can bring about enormous change. They have the power to inspire people, giving them a vision for a better future.

But it’s not easy to create inclusive institutions. You can’t just file for it online, or change your social media description. You need to organize and work for it, changing people’s values so they want wealth to be distributed.

Luckily, everyone can help with that. Regardless of your profession or your identity, you can help ensure the future is brighter for the ones you love. And to learn more about how to make institutions more inclusive, just keep reading our website.