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Growth, Inequality, and Poverty Reduction in Developing Countries: Recent Global Evidence

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  • Augustin Kwasi Fosu

Abstract

The study presents recent global evidence on the transformation of economic growth to poverty reduction in developing countries, with emphasis on the role of income inequality. The focus is on the period since the early/mid-1990s when growth in these countries as a group has been relatively strong, surpassing that of the advanced economies. Both regional and country-specific data are analysed for the US$1.25 and US$2.50 level poverty headcount ratios using the most recent World Bank data. The study finds that on average income growth has been the major driving force behind both the declines and increases in poverty. The study, however, documents substantial regional and country differences that are masked by this ‘average’ dominant growth story.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/wp2011/wp2011-01.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Working Paper WP2011/01.

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Length: 56 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:unu:wpaper:wp2011-01

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Keywords: growth; inequality; poverty; developing countries;

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References

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  1. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
  2. Fosu, Augustin Kwasi, 2010. "Does inequality constrain poverty reduction programs? Evidence from Africa," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 818-827, November.
  3. 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.
  4. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-39, June.
  5. Kalwij, Adriaan & Verschoor, Arjan, 2007. "Not by growth alone: The role of the distribution of income in regional diversity in poverty reduction," European Economic Review, Elsevier, vol. 51(4), pages 805-829, May.
  6. Anne Epaulard, 2003. "Macroeconomic Performance and Poverty Reduction," IMF Working Papers 03/72, International Monetary Fund.
  7. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2008. "Dollar a day revisited," Policy Research Working Paper Series 4620, The World Bank.
  8. Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Brooks World Poverty Institute Working Paper Series 9809, BWPI, The University of Manchester.
  9. Augustin Kwasi Fosu, 2010. "Inequality, income and poverty: comparative global evidence," Brooks World Poverty Institute Working Paper Series 14010, BWPI, The University of Manchester.
  10. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  11. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  12. Ravallion, Martin & Shaohua Chen, 2004. "China's (uneven) progress against poverty," Policy Research Working Paper Series 3408, The World Bank.
  13. Fosu, Augustin K., 2010. "Income Distribution and Growth’s Ability to Reduce Poverty: Evidence from Rural and Urban African Economies," Working Paper Series wp2010-92, World Institute for Development Economic Research (UNU-WIDER).
  14. 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.
  15. Theo S Eicher & Cecilia Garcia Penalosa, . "Inequality and Growth," Discussion Papers in Economics at the University of Washington 0083, Department of Economics at the University of Washington.
  16. Ravallion, M. & Datt, G., 1991. "Growth and Redistribution Components of Changes in Poverty Measures," Papers 83, World Bank - Living Standards Measurement.
  17. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
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Citations

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Cited by:
  1. Das, Gouranga, 2010. "Globalization, socio-institutional factors and North–South knowledge diffusion: Role of India and China as Southern growth progenitors," MPRA Paper 37252, University Library of Munich, Germany, revised 01 Aug 2011.
  2. Luebker, Malte, 2012. "Income Inequality, Redistribution and Poverty: Contrasting rational choice and behavioural perspectives," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. S. Annim & S. Mariwah & J. Sebu, 2012. "Spatial inequality and household poverty in Ghana," Brooks World Poverty Institute Working Paper Series 16112, BWPI, The University of Manchester.
  4. Ge, Jianping & Lei, Yalin, 2013. "Mining development, income growth and poverty alleviation: A multiplier decomposition technique applied to China," Resources Policy, Elsevier, vol. 38(3), pages 278-287.
  5. Olumuyiwa Adedeji & Huancheng Du & Maxwell Opoku-Afari, 2013. "Inclusive Growth," IMF Working Papers 13/139, International Monetary Fund.
  6. Page, John, 2012. "Aid, Structural Change and the Private Sector in Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Alex Cobham, Andy Sumner, 2013. "Is It All About the Tails? The Palma Measure of Income Inequality-Working Paper 343," Working Papers 343, Center for Global Development.
  8. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
  9. Alex Cobham & Andrew Sumner, 2013. "Is it all about the tails? The Palma measure of income inequality," Working Papers 308, ECINEQ, Society for the Study of Economic Inequality.
  10. Elbra, Ainsley D., 2013. "The forgotten resource curse: South Africa's poor experience with mineral extraction," Resources Policy, Elsevier, vol. 38(4), pages 549-557.

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