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Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa

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Author Info
Augustin Kwasi Fosu

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Abstract

This study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub-Saharan Africa (SSA) compared to non-SSA, based on an unbalanced panel of 86 countries over 1977-2004. For all three measures of poverty - headcount, gap, and squared gap - the impact of GDP growth on poverty reduction is a decreasing function of initial inequality. The impacts are similar in direction for SSA and non-SSA, so that within both regions there are considerable disparities in the responsiveness of poverty to income growth, depending on inequality. Nevertheless, the income-growth elasticity is substantially less for SSA, implying relatively small poverty-reduction response to growth.

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Article provided by Taylor and Francis Journals in its journal Journal of Development Studies.

Volume (Year): 45 (2009)
Issue (Month): 5 ()
Pages: 726-745
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Handle: RePEc:taf:jdevst:v:45:y:2009:i:5:p:726-745

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  2. Kalwij, Adriaan & Verschoor, Arjan, 2007. "Not by growth alone: The role of the distribution of income in regional diversity in poverty reduction," European Economic Review, Elsevier, vol. 51(4), pages 805-829, May. [Downloadable!] (restricted)
  3. Goldstein, Joshua S., 1985. "Basic human needs: The plateau curve," World Development, Elsevier, vol. 13(5), pages 595-609, May. [Downloadable!] (restricted)
  4. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September. [Downloadable!] (restricted)
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  5. Hicks, Norman & Streeten, Paul, 1979. "Indicators of development: The search for a basic needs yardstick," World Development, Elsevier, vol. 7(6), pages 567-580, June. [Downloadable!] (restricted)
  6. Fosu, A. K., 2001. "Political instability and economic growth in developing economies: some specification empirics," Economics Letters, Elsevier, vol. 70(2), pages 289-294, February. [Downloadable!] (restricted)
  7. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, Blackwell Publishing, vol. 39(2), pages 121-39, June.
  8. Augustin Kwasi Fosu, 2008. "Inequality and the growth-poverty nexus: specification empirics using African data," Applied Economics Letters, Taylor and Francis Journals, vol. 15(7), pages 563-566. [Downloadable!] (restricted)
  9. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  10. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, Oxford University Press, vol. 11(2), pages 357-82, May.
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  11. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December. [Downloadable!] (restricted)
  12. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
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