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Poverty reduction without economic growth ? explaining Brazil's poverty dynamics, 1985-2004

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  • Ferreira, Francisco H. G.
  • Leite, Phillippe G.
  • Ravallion, Martin

Abstract

Brazil's slow pace of poverty reduction over the last two decades reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerable variation in the poverty-reducing effectiveness of growth-across sectors, across space, and over time. Growth in the services sector was substantially more poverty-reducing than was growth in either agriculture or industry. Growth in industry had very different effects on poverty across different states and its impact varied with initial conditions related to human development and worker empowerment. The determinants of poverty reduction changed around 1994: positive growth rates and a greater (absolute) elasticity with respect to agricultural growth contributed to faster poverty reduction. But because there was so little of it, economic growth played a relatively small role in accounting for Brazil's poverty reduction between 1985 and 2004. The taming of hyperinflation (in 1994) and substantial expansions in social security and social assistance transfers, beginning in 1988, accounted for a larger share of the overall reduction in poverty.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4431.

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Date of creation: 01 Dec 2007
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Handle: RePEc:wbk:wbrwps:4431

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Keywords: Rural Poverty Reduction; Achieving Shared Growth; Population Policies; Inequality;

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References

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  1. Gustavo Gonzaga & Naércio Menezes Filho & Maria Cristina Terra, 2005. "Trade liberalization and the evolution of skill earnings differentials in Brazil," Textos para discussão 503, Department of Economics PUC-Rio (Brazil).
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  3. Luc Christiaensen & Lionel Demery, 2007. "Down to Earth : Agriculture and Poverty Reduction in Africa," World Bank Publications, The World Bank, number 6624.
  4. Ferreira, Francisco H. G. & Lanjouw, Peter & Neri, Marcelo Cortes, 2002. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Economics Working Papers (Ensaios Economicos da EPGE) 444, Graduate School of Economics, Getulio Vargas Foundation (Brazil).
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  7. Chen, Shaohua & Ravallion, Martin, 2007. "Absolute poverty measures for the developing world, 1981-2004," Policy Research Working Paper Series 4211, The World Bank.
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Citations

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Cited by:
  1. Peter Hoeller & Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 1. Mapping Income Inequality Across the OECD," OECD Economics Department Working Papers 924, OECD Publishing.
  2. Arias-Vazquez , Francisco Javier & Lee, Jean N. & Newhouse, David, 2012. "The role of sectoral growth patterns in labor market development," Policy Research Working Paper Series 6250, The World Bank.
  3. Jaya Krishnakumar & Cristian Ugarte, 2011. "The effect of growth on poverty reduction," Research Papers by the Department of Economics, University of Geneva 11061, Département des Sciences Économiques, Université de Genève.
  4. Francisco H. G. Ferreira & Anna Fruttero & Phillippe Leite & Leonardo Lucchetti, 2011. "Rising food prices and household welfare: Evidence from Brazil in 2008," Working Papers 200, ECINEQ, Society for the Study of Economic Inequality.
  5. Paola Salardi, 2008. "Brazilian Poverty Between And Within Groups: Decomposition By Geographical, Group-Specific Poverty Lines," PRUS Working Papers 41, Poverty Research Unit at Sussex, University of Sussex.
  6. Ferreira, Francisco H.G. & Ravallion, Martin, 2008. "Global poverty and inequality : a review of the evidence," Policy Research Working Paper Series 4623, The World Bank.
  7. Ravallion, Martin, 2009. "Are There Lessons for Africa from China's Success Against Poverty?," World Development, Elsevier, vol. 37(2), pages 303-313, February.
  8. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
  9. Essama-Nssah, , B. & Bassol3, Leandre & Paul, Saumik, 2010. "Accounting for heterogeneity in growth incidence in Cameroon," Policy Research Working Paper Series 5464, The World Bank.
  10. Ravallion, Martin, 2009. "A comparative perspective on poverty reduction in Brazil, China and India," Policy Research Working Paper Series 5080, The World Bank.

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