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Poverty and income distribution during adjustment: Issues and evidence from the OECD project

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  • Bourguignon, Francois
  • de Melo, Jaime
  • Morrisson, Christian

Abstract

Drawing lessons from country studies, the authors examine the effects of adjustment policies on the distribution of income in Chile, Cote d'Ivoire, Ecuador, Indonesia, Malaysia, and Morocco. After analyzing the issues that must be confronted in designing adjustment programs with a focus on poverty, they synthesize the main conclusions of the different country studies. With simulation exercises they explore the effects of the design of the adjustment packages on poverty and on the sustainability of the measures undertaken in these countries. These exercises show considerable diversity in the evolution of income distribution during adjustment. They also expose the fatal flaws of narrowly designed adjustment programs. Adjustment programs - whether focused on efficiency or on welfare - will fail when they do not recognize the interdependence of the three criteria of efficiency, welfare, and political feasibility. Adjustment programs must be carefully packaged to fit country circumstances, taking into account both the political and economic environments.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 19 (1991)
Issue (Month): 11 (November)
Pages: 1485-1508

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Handle: RePEc:eee:wdevel:v:19:y:1991:i:11:p:1485-1508

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References

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  1. Corden, W Max, 1989. "Macroeconomic Adjustment in Developing Countries," World Bank Research Observer, World Bank Group, vol. 4(1), pages 51-64, January.
  2. Bourguignon, Francois, 1991. "Optimal Poverty Reduction, Adjustment, and Growth," World Bank Economic Review, World Bank Group, vol. 5(2), pages 315-38, May.
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Citations

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Cited by:
  1. Christophe Muller, 2004. "Poverty And Inequality Under Income And Price Dispersions," Working Papers. Serie AD 2004-35, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Hertel, Thomas W. & Reimer, Jeffrey J., 2004. "Predicting the poverty impacts of trade reform," Policy Research Working Paper Series 3444, The World Bank.
  3. Dercon, Stefan, 2006. "Economic reform, growth and the poor: Evidence from rural Ethiopia," Journal of Development Economics, Elsevier, vol. 81(1), pages 1-24, October.
  4. Pastor, Manuel Jr. & Conroy, Michael E., 1995. "Distributional implications of macroeconomic policy: Theory and applications to El Salvador," World Development, Elsevier, vol. 23(12), pages 2117-2131, December.
  5. Ferreira, Francisco & Prennushi, Giovanna & Ravallion, Martin, 1999. "Protecting the poor from macroeconomic shocks," Policy Research Working Paper Series 2160, The World Bank.
  6. O'Faircheallaigh, Ciaran, 1998. "Resource development and inequality in indigenous societies," World Development, Elsevier, vol. 26(3), pages 381-394, March.
  7. Celso Nunes, 2008. "Poverty Measurement: The Development of Different Approaches and Its Techniques," Working Papers 93, ECINEQ, Society for the Study of Economic Inequality.
  8. Christophe Muller, 2006. "Poverty Simulation And Price Changes," Working Papers. Serie AD 2006-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  9. Devarajan, Shantayanan & Robinson, Sherman, 2002. "The influence of computable general equilibrium models on policy," TMD discussion papers 98, International Food Policy Research Institute (IFPRI).
  10. Arnim Langer and Frances Stewart (QEH), . "Macro Adjustment Policies and Horizontal Inequalities," QEH Working Papers qehwps158, Queen Elizabeth House, University of Oxford.
  11. Ehrhart, Christophe, 2006. "Croissance, redistribution et lutte contre la pauvreté : l’évolution non linéaire de l’approche de la Banque mondiale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(4), pages 597-641, décembre.
  12. Christopher Grigoriou & Patrick Guillaumont, 2011. "Child Mortality Reacts to Relative Prices," Working Papers halshs-00556800, HAL.
  13. Copenhagen Economics, 2008. "Reduced VAT for environmentally friendly products," Taxation Studies 0025, Directorate General Taxation and Customs Union, European Commission.
  14. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
  15. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "Poverty effects of Russia's WTO accession : modeling"real"households and endogenous productivity effects," Policy Research Working Paper Series 3473, The World Bank.

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