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Economic Growth and Poverty Reduction: Measurement Issues using Income and Non-Income Indicators

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  • Stephan Klasen

    ()
    (Universität Göttingen)

Abstract

This paper addresses two issues concerning the measurement of pro‐poor growth, a central concept for sustainable poverty reduction in developing countries. First, it attempts to clarify the debates about the definition and measurement of pro poor growth distinguishing between a weak and a strong absolute as well as a relative definition. The relevance of each definition depends on the purpose of the analysis as well as the assumptions regarding growthinequality trade‐offs. Given the focus of existing measures of pro‐poor growth on the income dimension, the second contribution is to present ways to apply the growth incidence curve and the Ravallion‐Chen framework of measuring pro‐poor growth to non‐income indicators. The analysis, which is applied to Bolivia for illustrative purposes, shows that the extension of the propoor growth toolbox to non‐income dimensions greatly improves our understanding of the trends in non‐income indicators along the entire distribution and thus greatly increases our ability to monitor progress towards the non‐income Millennium Development Goals (particularly goals 2‐6) and assess the linkages between income and non‐income poverty along the entire distribution. This can be of critical importance for poverty monitoring as well as policy interventions including the relative merits of growth versus direct intervention to improve the non‐income dimensions of poverty.

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Bibliographic Info

Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 142.

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Length: 27 pages
Date of creation: 08 Jun 2006
Date of revision:
Handle: RePEc:got:iaidps:142

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Keywords: Pro‐Poor Growth; Inequality; Non‐Income Poverty; Millennium Development Goals;

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References

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  1. Ravallion, Martin & Shaohua Chen, 2004. "China's (uneven) progress against poverty," Policy Research Working Paper Series 3408, The World Bank.
  2. Melanie Grosse & Stephan Klasen & Julius Spatz, 2005. "Creating National Poverty Profiles and Growth Incidence Curves with Incomplete Income or Consumption Expenditure Data: An Application to Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 129, Ibero-America Institute for Economic Research.
  3. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  4. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  5. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
  6. Misselhorn, Mark & Klasen, Stephan, 2006. "Determinants of the Growth Semi-Elasticity of Poverty Reduction," Proceedings of the German Development Economics Conference, Berlin 2006 15, Verein für Socialpolitik, Research Committee Development Economics.
  7. Klasen, Stephan & Günther, Isabel, 2007. "Measuring Chronic Non-Income Poverty," Proceedings of the German Development Economics Conference, Göttingen 2007 10, Verein für Socialpolitik, Research Committee Development Economics.
  8. Abhijit V. Banerjee & Esther Duflo, 2000. "Inequality and Growth: What Can the Data Say?," NBER Working Papers 7793, National Bureau of Economic Research, Inc.
  9. Basu, Kaushik & Foster, James E., 1998. "On measuring literacy," Policy Research Working Paper Series 1997, The World Bank.
  10. Grosse, Melanie & Harttgen, Kenneth & Klasen, Stephan, 2006. "Measuring Pro-Poor Progress towards the Non-Income Millennium Development Goals," Working Paper Series RP2006/38, World Institute for Development Economic Research (UNU-WIDER).
  11. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, 04.
  12. Klasen, Stephan, 2007. "Poverty, Undernutrition, and Child Mortality: Some Inter-Regional Puzzles and their Implications for Research and Policy," Proceedings of the German Development Economics Conference, Göttingen 2007 17, Verein für Socialpolitik, Research Committee Development Economics.
  13. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
  14. Michael Grimm, 2005. "Removing the anonymity axiom in assessing pro-poor growth," Ibero America Institute for Econ. Research (IAI) Discussion Papers 113, Ibero-America Institute for Economic Research.
  15. Stephen Knowles & Paula K. Lorgelly, 2002. "Are educational gender gaps a brake on economic development? Some cross-country empirical evidence," Oxford Economic Papers, Oxford University Press, vol. 54(1), pages 118-149, January.
  16. Melanie Grosse & Kenneth Harttgen & Stephan Klasen, 2005. "Measuring Pro-Poor Growth with Non-Income Indicators," Ibero America Institute for Econ. Research (IAI) Discussion Papers 132, Ibero-America Institute for Economic Research.
  17. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
  18. Jean-Yves Duclos, 2009. "What is “Pro-Poor”?," Social Choice and Welfare, Springer, vol. 32(1), pages 37-58, January.
  19. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
  20. Klasen, Stephan, 2000. "Measuring Poverty and Deprivation in South Africa," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 33-58, March.
  21. Datt, Gaurav & Ravallion, Martin, 2002. "Is India's economic growth leaving the poor behind?," Policy Research Working Paper Series 2846, The World Bank.
  22. Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research.
  23. Martin Ravallion, 2005. "A poverty-inequality trade off?," Journal of Economic Inequality, Springer, vol. 3(2), pages 169-181, August.
  24. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August.
  25. Stephan Klasen, 2006. "Pro-Poor Growth and Gender Inequality," Ibero America Institute for Econ. Research (IAI) Discussion Papers 151, Ibero-America Institute for Economic Research.
  26. Kakwani, Nanak & Son, Hyun H., 2006. "Pro-Poor Growth: The Asian Experience," Working Paper Series RP2006/56, World Institute for Development Economic Research (UNU-WIDER).
  27. Stephan Klasen, 2004. "In Search of the Holy Grail: How to Achieve Pro-Poor Growth?," Macroeconomics 0401005, EconWPA.
  28. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
  29. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
  30. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  31. Chun-Hung Lin, 2007. "Education Expansion, Educational Inequality, and Income Inequality: Evidence from Taiwan, 1976–2003," Social Indicators Research, Springer, vol. 80(3), pages 601-615, February.
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Citations

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Cited by:
  1. Michael Grimm & Kenneth Harttgen & Stephan Klasen & Mark Misselhorn & Teresa Munzi & Timothy Smeeding, 2009. "Inequality in Human Development: An empirical assessment of thirty-two countries," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 6, Courant Research Centre PEG.
  2. Caracciolo, Francesco & Santeramo, Fabio Gaetano, 2012. "Price trends and income inequalities: will Sub-Saharan-Africa reduce the gap?," MPRA Paper 45196, University Library of Munich, Germany.
  3. Grosse, Melanie & Harttgen, Kenneth & Klasen, Stephan, 2008. "Measuring Pro-Poor Growth in Non-Income Dimensions," World Development, Elsevier, vol. 36(6), pages 1021-1047, June.
  4. Abdelkrim ARAAR & Jean-Yves DUCLOS & Paul MAKDISSI, 2012. "Pro-poor indirect tax reforms, with an application to Mexico," Working Papers P56, FERDI.
  5. Adriana Cardozo & Melanie Grosse, 2009. "Pro-Poor Growth Using Non-Income Indicators: An Empirical Illustration for Colombia," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 9, Courant Research Centre PEG.
  6. David, Anda Mariana & Marouani, Mohamed Ali, 2012. "Poverty Reduction and Growth Interactions: What Can Be Learned From the Syrian Experience?," Economics Papers from University Paris Dauphine 123456789/4543, Paris Dauphine University.
  7. S. Chandrasekhar & Abhiroop Mukhopadhyay, 2009. "Poverty in Indian cities during the reforms era," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 09-07, Indian Statistical Institute, New Delhi, India.
  8. Tebaldi, Edinaldo & Mohan, Ramesh, 2008. "Poverty, Geography and Institutional Path Dependence," MPRA Paper 10201, University Library of Munich, Germany.
  9. Francisco Azpitarte, 2012. "Was Economic Growth in Australia Good for the Income-Poor? and for the Multidimensionally-Poor?," Working Papers 278, ECINEQ, Society for the Study of Economic Inequality.
  10. Olavarrieta, Sergio & Villena, Mauricio G., 2014. "Innovation and business research in Latin America: An overview," Journal of Business Research, Elsevier, vol. 67(4), pages 489-497.

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