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The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest

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Author Info

  • Nancy Birdsall

Abstract

Inclusive growth is widely embraced as the central economic goal for developing countries, but the concept is not well defined in the development economics literature. Since the early 1990s, the focus has been primarily on pro-poor growth, with the “poor” being people living on less than $1 day, or in some regions $2 day. The idea of pro-poor growth emerged in the early 1990s as a counterpoint to a concern with growth alone (measured in per-capita income) and is generally defined as growth which benefits the poor as much or more than the rest of the population. Examples include conditional cash transfers, which target the poor while minimizing the fiscal burden on the public sector, and donors’ emphasizing primary over higher education as an assured way to benefit the poor while investing in long-term growth through increases in human capital. Yet these pro-poor, inclusive policies are not necessarily without tradeoffs in fostering long-run growth. In this paper I argue that the concept of inclusive growth should go beyond the traditional emphasis on the poor (and the rest) and take into account changes in the size and economic command of the group conventionally defined as neither poor nor rich, i.e., the middle class.

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Bibliographic Info

Paper provided by Center for Global Development in its series Working Papers with number 207.

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Length: 38 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:cgd:wpaper:207

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Web page: http://www.cgdev.org

Related research

Keywords: middle class; developing countries; growth; economics; development; poverty; human capital;

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Cited by:
  1. Mustafa Yavuz Cakir & Alain Kabundi, 2011. "Trade Shocks from BRIC to South Africa: A Global VAR Analysis," Working Papers 250, Economic Research Southern Africa.
  2. Eduardo Lora & Deisy Johanna Fajardo, 2011. "Latin American Middle Classes: The Distance between Perception and Reality," Research Department Publications 4727, Inter-American Development Bank, Research Department.
  3. Lukas Schlogl & Andy Sumner, 2014. "How Middle Class are the ‘Emerging Middle’ or ‘Scooter Class’ in Indonesia? A Household Asset Approach to Social Stratification," Working Papers in Economics and Development Studies (WoPEDS) 201407, Department of Economics, Padjadjaran University, revised May 2014.

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