IDEAS home Printed from https://ideas.repec.org/a/wly/povpop/v15y2023i2p251-278.html
   My bibliography  Save this article

Economic growth and poverty reduction: Evidence from Sub‐Saharan African (SSA) countries

Author

Listed:
  • Yohannes Kefale Mogess
  • Zerayehu Sime Eshete
  • Abadi Teferi Alemaw

Abstract

Sub‐Saharan African (SSA) countries have registered outstanding economic growth in recent decades. However, poverty is still pervasive, deep, and severe in the region. This paper aims to analyze the impact of the recent economic growth on poverty reduction in 27 SSA countries using a new dynamic panel data set. Adopting System GMM estimation, this study found that economic growth has been associated with poverty reduction. Also, the previous level of poverty had an intense impact on the prevalent poverty status in the region. Moreover, although nonmonetary measures and income measures of poverty produce similar results (showing a reduction in poverty), nonincome poverty, especially destitution data, suggest that SSA countries are poorer even than previously understood. We suggest that SSA countries should promote a policy of income‐enhancing (i.e., economic growth) to ramp up poverty reduction. 近几十年，撒哈拉以南非洲(SSA)国家取得了显著的经济增长。不过，该地区的贫困现象依然普遍、深入且严重。本文旨在使用一项新的动态面板数据集，分析近年来经济增长对27个SSA国家减贫的影响。通过采用系统广义矩估计(System GMM)，本研究发现，经济增长与减贫存在联系。此外，以往的贫困程度对该地区普遍的贫困状况产生了强烈影响。尽管非货币贫困衡量指标和收入贫困衡量指标产生了相似的结果（即都显示贫困有所减少），但非收入贫困（尤其是赤贫数据）表明，SSA国家甚至比以前认为的还要穷。我们建议，SSA国家应推动一项增加收入（即经济增长）的政策，以加快减贫步伐。 Los países del África Subsahariana (SSA) han registrado un crecimiento económico sobresaliente en las últimas décadas. Sin embargo, la pobreza sigue siendo generalizada, profunda y grave en la región. Este documento tiene como objetivo analizar el impacto del crecimiento económico reciente en la reducción de la pobreza en 27 países del SSA utilizando un nuevo conjunto de datos de panel dinámico. Adoptando la estimación del Sistema GMM, este estudio encontró que el crecimiento económico se ha asociado con la reducción de la pobreza. Además, el nivel de pobreza anterior tuvo un impacto intenso en el estado de pobreza prevaleciente en la región. Además, aunque las medidas no monetarias y las medidas de ingresos de la pobreza producen resultados similares (mostrando una reducción de la pobreza), la pobreza no relacionada con los ingresos, especialmente los datos de indigencia, sugieren que los países del África subsahariana son incluso más pobres de lo que se pensaba anteriormente. Sugerimos que los países del África subsahariana promuevan una política de mejora de los ingresos (es decir, crecimiento económico) para acelerar la reducción de la pobreza.

Suggested Citation

  • Yohannes Kefale Mogess & Zerayehu Sime Eshete & Abadi Teferi Alemaw, 2023. "Economic growth and poverty reduction: Evidence from Sub‐Saharan African (SSA) countries," Poverty & Public Policy, John Wiley & Sons, vol. 15(2), pages 251-278, June.
    • Handle: RePEc:wly:povpop:v:15:y:2023:i:2:p:251-278
    DOI: 10.1002/pop4.364
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/pop4.364
    Download Restriction: no
    File URL: https://libkey.io/10.1002/pop4.364?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alonso-Borrego, Cesar & Arellano, Manuel, 1999. "Symmetrically Normalized Instrumental-Variable Estimation Using Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 36-49, January.
    2. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    3. Ali Abdel Gadir Ali & Erik Thorbecke, 2000. "The State and Path of Poverty in Sub-Saharan Africa: some Preliminary Results," Journal of African Economies, Centre for the Study of African Economies, vol. 9(Supplemen), pages 9-40.
    4. Augustin Kwasi Fosu, 2008. "Inequality and the growth-poverty nexus: specification empirics using African data," Applied Economics Letters, Taylor & Francis Journals, vol. 15(7), pages 563-566.
    5. Raj Chetty & John N. Friedman & Nathaniel Hilger & Emmanuel Saez & Diane Whitmore Schanzenbach & Danny Yagan, 2011. "How Does Your Kindergarten Classroom Affect Your Earnings? Evidence from Project Star," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1593-1660.
    6. Nicholas M. Odhiambo, 2021. "Is export-led growth hypothesis still valid for sub-Saharan African countries? New evidence from panel data analysis," European Journal of Management and Business Economics, Emerald Group Publishing Limited, vol. 31(1), pages 77-93, April.
    7. Richard Blundell & Stephen Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies.
    8. Mr. Daouda Sembene, 2015. "Poverty, Growth, and Inequality in Sub-Saharan Africa: Did the Walk Match the Talk under the PRSP Approach?," IMF Working Papers 2015/122, International Monetary Fund.
    9. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    10. Malte Luebker, 2014. "Income Inequality, Redistribution, and Poverty: Contrasting Rational Choice and Behavioral Perspectives," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 133-154, March.
    11. Adams, Richard H. Jr., 2003. "Economic growth, inequality, and poverty : findings from a new data set," Policy Research Working Paper Series 2972, The World Bank.
    12. Dani Rodrik, 2007. "Introductiion to One Economics, Many Recipes: Globalization, Institutions, and Economic Growth," Introductory Chapters, in: One Economics, Many Recipes: Globalization, Institutions, and Economic Growth, Princeton University Press.
    13. repec:unu:wpaper:wp2012-44 is not listed on IDEAS
    14. repec:ilo:ilowps:471001 is not listed on IDEAS
    15. Mohamed Bouincha & Mohamed Karim, 2018. "Income Inequality and Economic Growth: An Analysis Using a Panel Data," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(5), pages 242-253, May.
    16. Augustin Kwasi Fosu, 2015. "Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context," Oxford Development Studies, Taylor & Francis Journals, vol. 43(1), pages 44-59, March.
    17. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1577-1625.
    18. Heshmati, Almas, 2004. "Growth, Inequality and Poverty Relationships," IZA Discussion Papers 1338, Institute of Labor Economics (IZA).
    19. 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.
    20. Fassil Fanta & Mukti Upadhyay, 2009. "Poverty reduction, economic growth and inequality in Africa," Applied Economics Letters, Taylor & Francis Journals, vol. 16(18), pages 1791-1794.
    21. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and … Convergence, Period," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 351-397.
    22. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    23. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    24. Seyi Saint Akadiri & Ada Chigozie Akadiri, 2018. "Growth and Inequality in Africa: Reconsideration," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(3), pages 76-86, September.
    25. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    26. Åsa Johansson & Chistopher Heady & Jens Matthias Arnold & Bert Brys & Laura Vartia, 2008. "Taxation and Economic Growth," OECD Economics Department Working Papers 620, OECD Publishing.
    27. UmushC Gulati, 1992. "The Foundations of Rapid Economic Growth," American Journal of Economics and Sociology, Wiley Blackwell, vol. 51(2), pages 161-172, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    2. Sèna Kimm Gnangnon, 2023. "Do unilateral trade preferences help reduce poverty in beneficiary countries?," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 249-288, February.
    3. Perera, Liyanage Devangi H. & Lee, Grace H.Y., 2013. "Have economic growth and institutional quality contributed to poverty and inequality reduction in Asia?," MPRA Paper 52763, University Library of Munich, Germany.
    4. Gnangnon, Sèna Kimm, 2021. "Do Unilateral Trade Preferences Help Reduce Poverty in Beneficiary Countries?," EconStor Preprints 247346, ZBW - Leibniz Information Centre for Economics.
    5. Fosu, Augustin Kwasi, 2017. "Growth, inequality, and poverty reduction in developing countries: Recent global evidence," Research in Economics, Elsevier, vol. 71(2), pages 306-336.
    6. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    7. Eric Akobeng, 2017. "Gross Capital Formation, Institutions and Poverty in Sub-Saharan Africa," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 20(2), pages 136-164, April.
    8. Ouyang, Yusi & Shimeles, Abebe & Thorbecke, Erik, 2019. "Revisiting cross-country poverty convergence in the developing world with a special focus on Sub-Saharan Africa," World Development, Elsevier, vol. 117(C), pages 13-28.
    9. Yerrabati, Sridevi, 2022. "Does vulnerable employment alleviate poverty in developing countries?," Economic Modelling, Elsevier, vol. 116(C).
    10. Stimpfle, Alexander & Stadelmann, David, 2015. "The Impact of Fundamental Development Factors on Different Income Groups: International Evidence," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113128, Verein für Socialpolitik / German Economic Association.
    11. Angelica Gonzalez, 2007. "Angelica Gonzalez," Edinburgh School of Economics Discussion Paper Series 168, Edinburgh School of Economics, University of Edinburgh.
    12. Gründler, Klaus & Scheuermeyer, Philipp, 2015. "Income inequality, economic growth, and the effect of redistribution," W.E.P. - Würzburg Economic Papers 95, University of Würzburg, Department of Economics.
    13. Ünal Töngür & Adem Yavuz Elveren, 2017. "The nexus of economic growth, military expenditures, and income inequality," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(4), pages 1821-1842, July.
    14. Jan F. Kiviet, 2005. "Judging Contending Estimators by Simulation: Tournaments in Dynamic Panel Data Models," Tinbergen Institute Discussion Papers 05-112/4, Tinbergen Institute.
    15. Dörffel, Christoph & Freytag, Andreas, 2023. "The poverty effect of democratization," World Development, Elsevier, vol. 165(C).
    16. Angelica Gonzalez, 2007. "Empirical Likelihood: Improved Inference within Dynamic Panel Data Models," Edinburgh School of Economics Discussion Paper Series 154, Edinburgh School of Economics, University of Edinburgh.
    17. Sarah Voitchovsky, 2005. "Does the Profile of Income Inequality Matter for Economic Growth?," Journal of Economic Growth, Springer, vol. 10(3), pages 273-296, September.
    18. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    19. Amparo Castelló-Climent, 2010. "Inequality and growth in advanced economies: an empirical investigation," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(3), pages 293-321, September.
    20. Jorge Rojas-Vallejos & Stephen J. Turnovsky, 2017. "Tariff Reduction and Income Inequality: Some Empirical Evidence," Open Economies Review, Springer, vol. 28(4), pages 603-631, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:povpop:v:15:y:2023:i:2:p:251-278. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1944-2858 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.