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Economic marginalization of minorities: Do laws provide the needed protections?

Elaine R.E. Panter's picture

Never in recent history has anti-minorities rhetoric — anti-immigrants, anti-religious-minorities, anti-LGBTI — been so pronounced in so many countries around the world. Those groups, we are told, are the cause of our current economic crisis because they steal our jobs, fuel criminality and threaten our traditional way of living. And yet, the causes of our economic crisis are probably more nuanced, and initial research seems to suggest that more and not less social inclusion will help us overcome the instability of our times.

The exclusion of minorities from the labor force is becoming politically and economically unsustainable for many states that are struggling to retain their legitimacy and strengthen their competitive potential in an increasingly global marketplace. As a consequence, governments, international development agencies and academic institutions are now looking seriously at ways to develop policies that guarantee a more equal and sustainable form of economic development — development that addresses both short- and  long-term economic goals.

The World Bank’s Equality Project attempts to address this problem. The idea driving the project is that institutional measures that hamper the access of ethnic, religious and sexual minorities to the labor market and financial systems (such as legal and policy restrictions, or the absence of appropriate, positive nondiscrimination actions) directly affect their economic performance and, as a consequence, represent a cost for the economy: If a sizeable percentage of the population is not given the opportunity to acquire a high-quality education, a good job, secure housing, access to services, equal representation in decision-making institutions and protection from violence, human capital will be wasted, income inequality will grow and social unrest will ensue. The World Bank’s widely cited Inclusion Matters report puts it succinctly: “Social inclusion matters because exclusion is too costly. These costs are social, economic and political, and are often interrelated.”

The project collected and validated data on the legal framework of six pilot countries: Bulgaria, Mexico, Morocco, the Netherlands, Tanzania and Vietnam. The methodological approach of collecting cross-country comparable data according to key indicators yielded some general but interesting results, published in a research working paper in March 2017.

First, given the importance of the issue, there is surprisingly little research in the field of nondiscrimination legislation disaggregated by ethnicity, religion and sexual orientation and gender identity. We need more research to understand the problem, calculate the economic costs of marginalization, and conduct comparable cross-country analysis.

Second, in the six pilot countries, laws that protect minorities from discrimination in the labor market seem to be quite detailed and comprehensive in their approach, regardless of each country's judicial tradition. However, anti-discrimination laws in the property and social-protection fields in the surveyed countries are often weak and, at times, in direct contradiction with the national nondiscrimination legislation — suggesting there is still little appreciation of the interdependence of sectors like labor and property and public services.

Third, of the three groups looked at in the study — ethnic, religious and sexual minorities — the least protected under the law are sexual minorities, who, if they are not persecuted by the state (as they are in Tanzania and Morocco, where homosexuality is a crime), are granted little to no protection under the law against economic marginalization and hate crimes.
 
Now that the methodology has been tested, the next step of the project would be to scale up the study to a global level and to observe, over time, if well-designed and targeted laws and policies that promote the economic inclusion of minorities have a positive effect on the productivity of these groups and on the country as a whole. Admittedly, integration is difficult, and many other factors can contribute to the growth or stagnation of an economy. Most likely, we will never reach a conclusive answer.

What is clear, however, is that people around the world are systematically discriminated against for reasons beyond their control. Perhaps what is needed is a more constructive approach that highlights the opportunities and not the challenges of integration, with the underlying premise that human dignity is not negotiable and that everyone deserves equal opportunities, irrespective of ethnicity, religion, sexual orientation or gender identity.
 

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