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Economic Growth and Poverty Reduction: Measurement and Policy Issues

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Author Info
Stephan Klasen

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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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Paper provided by OECD, Development Centre 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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  1. 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. [Downloadable!]
  2. Blackden, Mark & Canagarajah, Sudharshan & Klasen, Stephan & Lawson, David, 2006. "Gender and Growth in Sub-Saharan Africa: Issues and Evidence," Working Papers RP2006/37, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  3. 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. [Downloadable!]
  4. Lombardo, Vincenzo, 2008. "Growth and inequality effects on poverty reduction in Italy," MPRA Paper 14351, University Library of Munich, Germany. [Downloadable!]
  5. Grosse, Melanie & Harttgen, Kenneth & Klasen, Stephan, 2006. "Measuring Pro-Poor Progress towards the Non-Income Millennium Development Goals," Working Papers RP2006/38, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  6. 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. [Downloadable!]
  7. Klump, Rainer & Pruefer, Patricia, 2006. "Prioritizing policies for pro-poor growth: applying bayesian model averaging to Vietnam," Discussion Paper 117, Tilburg University, Center for Economic Research. [Downloadable!]
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