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What can new survey data tell us about recent changes in distribution and poverty?

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  • Ravallion, Martin
  • Shaohua Chen

Abstract

The authors used distribution data from 109 household surveys done since 1980 in 42 developing and transitional economies to find evidence that high rates of growth in average living standards are associated with higher rates of poverty reduction. The adverse distributional effect of recent growth in a number of developing countries has not been strong enough to change the conclusion that growth has benefited the poor. For the developing countries as a whole, there is no significant trend in distributional effect for or against the poor. Overall there was a small decrease in poverty incidence in 1987-93, though experiences differed across regions and countries. There was no general tendency for inequality or polarization to increase with growth. Distribution improves as often as it worsens in growing economies, and negative growth often appears to be highly detrimental to distribution. Poor people typically do share in rising average living standards. This holds in all regions. Turning to performance in reducing absolute poverty, the authors calculated the rates of change in the proportions of the population living on less than 50 percent, 75 percent, and 100 percent of the initial survey mean for each country. In East Asia, poverty fell in most cases, while it rose in almost all cases in Eastern Europe and Central Asia. Poverty also mainly rose in Africa and it rose in South Asia and Latin America about as often as it fell. Other results discussed include population percentage changes for those in poverty and the percentage change in the depth of poverty.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1694.

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Date of creation: 31 Dec 1996
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Handle: RePEc:wbk:wbrwps:1694

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Keywords: Services&Transfers to Poor; Poverty Monitoring&Analysis; Economic Conditions and Volatility; Environmental Economics&Policies; Health Economics&Finance; Achieving Shared Growth; Poverty Assessment; Inequality; Governance Indicators; Safety Nets and Transfers;

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  1. Squire, Lyn, 1993. "Fighting Poverty," American Economic Review, American Economic Association, vol. 83(2), pages 377-82, May.
  2. Milanovic, Branko, 1995. "Poverty, inequality, and social policy in transition economies," Policy Research Working Paper Series 1530, The World Bank.
  3. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827.
  4. Ravallion, Martin, 1995. "Growth and poverty: Evidence for developing countries in the 1980s," Economics Letters, Elsevier, vol. 48(3-4), pages 411-417, June.
  5. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May.
  6. Shaohua Chen & Datt, Gaurav & Ravallion, Martin, 1993. "Is poverty increasing in the developing world?," Policy Research Working Paper Series 1146, The World Bank.
  7. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  8. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
  9. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
  10. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-61, December.
  11. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
  12. Fields, Gary S, 1989. "Changes in Poverty and Inequality in Developing Countries," World Bank Research Observer, World Bank Group, vol. 4(2), pages 167-85, July.
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