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Does inequality constrain poverty reduction programs? Evidence from Africa

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  • Fosu, Augustin Kwasi

Abstract

Examined in the present study is the extent to which inequality influences the effectiveness of income growth in poverty reduction, based on 1990s data for a sample of African economies. An analysis-of-covariance model is derived and estimated, with the headcount, gap, and squared gap poverty ratios serving as the respective dependent variables, and the Gini coefficient and PPP-adjusted income as explanatory variables. The study finds that the responsiveness of poverty to income is a decreasing function of inequality. The results imply a large variation across African countries in the amount of growth required to meet a unit of poverty reduction, as in the case of the MDG1, depending on the level of inequality. For efficient policymaking, therefore, a country-specific strategy with varying emphases on inequality relative to growth is warranted.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 32 (2010)
Issue (Month): 6 (November)
Pages: 818-827

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Handle: RePEc:eee:jpolmo:v:32:y::i:6:p:818-827

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Web page: http://www.elsevier.com/locate/inca/505735

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Keywords: Inequality Income growth Poverty reduction Policy African economies;

References

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  12. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Policy Research Working Paper Series 1775, The World Bank.
  13. Milanovic, Branko, 2003. "Is inequality in Africa really different ?," Policy Research Working Paper Series 3169, The World Bank.
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Cited by:
  1. Herzer, Dierk & Vollmer, Sebastian, 2013. "Rising top incomes do not raise the tide," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 504-519.
  2. Augustin Kwasi Fosu, 2011. "Growth, Inequality, and Poverty Reduction in Developing Countries: Recent Global Evidence," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  3. Tausch, Arno, 2011. "Costa Rica, superstar? some reflections on the global drivers and bottlenecks of the happy planet index," MPRA Paper 33226, University Library of Munich, Germany.
  4. Tausch, Arno & Heshmati, Almas, 2011. "Migration, Openness and the Global Preconditions of 'Smart Development'," IZA Discussion Papers 6169, Institute for the Study of Labor (IZA).

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