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Economic Growth and Poverty Reduction: Measurement and Policy Issues

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  • Stephan Klasen

Abstract

The aim of this Working Paper is to broaden the debate on “pro-poor growth”. An exclusive focus on the income dimension of poverty has neglected the non-income dimensions. After an examination of prominent views on the linkages between economic growth, inequality, and poverty reduction this paper discusses the proper definition and measurement of pro-poor growth. Bolivia serves as a case study to illustrate the usefulness of applying the analytical toolbox for pro-poor growth to non-income dimensions of poverty and offers some important new insights about differences in the evolution of both poverty dimensions. Growth in Bolivia has been more pro-poor in the non-income than in the income dimension. The analysis furthermore shows that extending use of the pro-poor growth toolbox to non-income dimensions of poverty greatly improves our understanding of the trends in non-income indicators. Such understanding is pivotal for a careful assessment of the linkages between income and nonincome poverty along the entire income distribution. It is equally important for poverty monitoring and for defining policy interventions. It also allows deeper analysis of the relative merits of economic growth, compared to direct intervention aimed at improving non-income dimensions of poverty. Ce document technique se propose d’élargir le débat sur « la croissance au bénéfice des pauvres ». Prendre exclusivement en compte le revenu comme dimension de la pauvreté néglige ses dimensions hors revenu. Après une étude des thèses en vue sur les liens entre croissance économique, inégalités et réduction de la pauvreté, l’article questionne la définition propre de « la croissance au bénéfice des pauvres » et la manière de la mesurer. La Bolivie présente un cas d’école illustrant l’utilité d’élargir les outils d’analyse de cette croissance aux dimensions hors revenu de la pauvreté, et elle offre de précieux nouveaux repères sur les différentes évolutions des deux sphères de la pauvreté. La croissance en Bolivie a davantage bénéficié aux pauvres dans le registre hors revenu que dans le registre du revenu. L’analyse développe qu’un recours aux outils d’une croissance bénéfique aux pauvres élargis aux dimensions hors revenu de la pauvreté améliore sensiblement notre compréhension des tendances des indicateurs de la sphère hors revenu. Une telle compréhension est fondamentale pour une appréciation judicieuse des liens entre pauvreté en matière de revenu et pauvreté hors revenu tout au long de la distribution du revenu global. C’est également important pour agir sur la pauvreté et pour définir des politiques d’intervention. Cette compréhension permet aussi d’approfondir en les comparant l’analyse des mérites relatifs de la croissance économique et des interventions directes visant à améliorer les paramètres hors revenu de la pauvreté.

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File URL: http://dx.doi.org/10.1787/017028157830
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 246.

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Date of creation: 21 Sep 2005
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Handle: RePEc:oec:devaaa:246-en

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Cited by:
  1. David Woodward & Andrew Simms, 2006. "Growth is Failing the Poor: The Unbalanced Distribution of the Benefits and Costs of Global Economic Growth," Working Papers 20, United Nations, Department of Economics and Social Affairs.
  2. Salem Kanoun, 2012. "Linkages Between Fiscal Debt Sustainability, Growth And Poverty: An Application To Tunisia," Book Chapters, Institute of Economic Sciences.
  3. 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.
  4. Komsan Suriya, 2012. "Modeling the linkage between tourism and multiple dimensions of poverty in Thailand," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(1), pages 17-38, March.
  5. Lombardo, Vincenzo, 2008. "Growth and inequality effects on poverty reduction in Italy," MPRA Paper 14351, University Library of Munich, Germany.
  6. World Bank, 2012. "A Gender (R)evolution in the Making? Expanding Women's Economic Opportunities in Central America : A Decade in Review," World Bank Other Operational Studies 12468, The World Bank.
  7. Stephan Klasen, 2006. "Macroeconomic Policy and Pro-Poor Growth in Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 143, Ibero-America Institute for Economic Research.
  8. World Bank, 2007. "Chile - County Gender Assessment : Expanding Women's Work Choices to Enhance Chile's Economic Potential," World Bank Other Operational Studies 7639, The World Bank.
  9. Klump, R. & Prüfer, P., 2006. "Prioritizing Policies for Pro-Poor Growth: Applying Bayesian Model Averaging to Vietnam," Discussion Paper 2006-117, Tilburg University, Center for Economic Research.
  10. Jean-Pierre Lachaud, 2006. "La mesure de la croissance pro-pauvres en Afrique : espace de l’utilité ou des capacités ? Analyse comparative appliquée au Burkina Faso," Documents de travail 122, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
  11. Jean-Pierre Lachaud, 2006. "La croissance pro-pauvres au Burkina Faso. L’éviction partielle de l’axiome d’anonymat en présence de données transversales," Documents de travail 126, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.

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