E/CN.4/2006/43 page 9 different levels of the economy. An increase in income will make implementation of such policies easier. But even without that, in many situations appropriate policies alone, with the reallocation of resources when necessary, can attain the target. 22. The human development approach to economic development not only relegates income growth to its instrumental role as supporting the improvement of different elements constituting human development, but it also highlights and emphasizes the role of economic policies and the concomitant role of policy-making institutions, such as the State and other corporate and non-corporate authorities. This is quite contrary to the paradigm of development built around the maximization of income growth as a development objective. In that paradigm, a complete liberalization and deregulation of market forces, both nationally and internationally, was considered both necessary and sufficient for achieving the objective through competition and increased efficiency of resource market allocation in accordance with comparative advantage. 23. The human development approach, on the other hand, looked mainly at the market’s instrumental role. In most cases, a free play of market forces achieved efficiency and maximum production. But there are cases of market failure, when external intervention through appropriate policies may be necessary to correct those failures and then allow the markets to play their role as freely as possible. The success of these policies has to be judged not according to how free those markets are, but by the actual achievement of the objective of human development - not by the extent of the increase in the value of production or income, but to what extent increased income has facilitated the realization of human development. 24. The difference in the perspectives of the two approaches becomes even sharper when the removal of poverty is explicitly introduced as an objective of economic development. Poverty is the result of severe inequality of distribution, of income and human development. The poor are, in most countries, not only denied of a level of income barely sufficient to subsist with a minimum of essential needs for living but are also deprived of education, nutrition, life expectancy, health, shelter, sanitation and similar other elements of human development. The removal of poverty implies changing the pattern of this distribution, which would always require intervening in the market and reallocating resources contrary to simple policies of maximizing income growth. 25. Although several countries have experienced a reduction in poverty levels with a rapid increase in GDP growth, the policies required to achieve these objectives differ substantially and may sometimes conflict with each other. If income distribution did not worsen, any GDP growth would reduce the number of people living in poverty gradually, over a period time. But if GDP growth is accompanied by an increase in inequality, which is often the case with market-based acceleration of income growth, then poverty may actually increase. In such cases, a well-designed income redistribution programme would have to be adopted which would involve interventions in markets either in the increased production in sectors that raise the real income of the poor or in the provision of goods and services, food, health, sanitation or shelter that raises the real consumption of the poor. Taxes, subsidies and controls of production and distribution channels may be used for this purpose, targeting the poor. Clearly, a process of economic development that makes poverty reduction a principal objective would have to build on a development policy that would be much more than a policy to accelerate economic growth by incorporating policies of redistribution of income and restructuring of production.