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Ethnic inequality and poverty in Malaysia since May 1969. Part 2: Poverty

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  • Ravallion, Martin

Abstract

Over the last 50 years, Malaysia has seen one of the fastest rates of income-poverty reduction in the world. This came alongside falling overall income inequality, due in large part to a national policy effort to address ethnic inequalities, in the wake of tragic race riots in 1969. The first paper in the two-part series examined various measures of ethnic inequality. This second paper assesses the role that changes in between-group inequality played in Malaysia’s success against poverty. To address this question, a new decomposition method is applied to survey data spanning 50 years. The results indicate that ethnic redistribution helped reduce poverty, but it was not as important as within-group redistribution or mean-income growth. A pure ethnic redistribution effect is defined and isolated empirically. Sizable potential gains to the country’s poor from ethnic redistribution are revealed in the 1970s, suggesting that the early policy effort made sense. The absolute gains have faded over time and are now small, though the elasticity of national poverty to ethnic redistribution remains quite high.

Suggested Citation

  • Ravallion, Martin, 2020. "Ethnic inequality and poverty in Malaysia since May 1969. Part 2: Poverty," World Development, Elsevier, vol. 134(C).
    • Handle: RePEc:eee:wdevel:v:134:y:2020:i:c:s0305750x20301650
    DOI: 10.1016/j.worlddev.2020.105039
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    References listed on IDEAS

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    1. Martin Ravallion, 2013. "How Long Will It Take to Lift One Billion People Out of Poverty?," The World Bank Research Observer, World Bank, vol. 28(2), pages 139-158, August.
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    6. Manfred Lenzen & Arne Geschke & Muhammad Daaniyall Abd Rahman & Yanyan Xiao & Jacob Fry & Rachel Reyes & Erik Dietzenbacher & Satoshi Inomata & Keiichiro Kanemoto & Bart Los & Daniel Moran & Hagen Sch, 2017. "The Global MRIO Lab – charting the world economy," Economic Systems Research, Taylor & Francis Journals, vol. 29(2), pages 158-186, April.
    7. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
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    Cited by:

    1. Cuesta, Lizeth & Ruiz, Yomara, 2021. "Efecto de la globalización sobre la desigualdad. Un estudio global para 104 países usando regresiones cuantílicas [Effect of globalization on inequality. A global study for 104 countries using quan," MPRA Paper 111022, University Library of Munich, Germany.
    2. Becker, Sascha O. & Mukand, Sharun & Yotzov, Ivan, 2022. "Persecution, pogroms and genocide: A conceptual framework and new evidence," Explorations in Economic History, Elsevier, vol. 86(C).
    3. Bolch, Kimberly B. & Ceriani, Lidia & López-Calva, Luis F., 2022. "The arithmetics and politics of domestic resource mobilization for poverty eradication," World Development, Elsevier, vol. 149(C).
    4. Khalid, Muhammed Abdul & Yang, Li, 2021. "Income inequality and ethnic cleavages in Malaysia: Evidence from distributional national accounts (1984–2014)," Journal of Asian Economics, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Ethnic inequality; Poverty; Growth; Malaysia;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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