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

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Author Info
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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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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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Francisco H. G. Ferreira & Peter Lanjouw & Marcelo Côrtes Neri, 2003. "A Robust Poverty Profile for Brazil Using Multiple Data Sources," Revista Brasileira de Economia, Graduate School of Economics, Getulio Vargas Foundation (Brazil), vol. 57(1), April. [Downloadable!]
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  4. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-34, November. [Downloadable!] (restricted)
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  5. Loayza, Norman V. & Raddatz, Claudio, 2006. "The composition of growth matters for poverty alleviation," Policy Research Working Paper Series 4077, The World Bank. [Downloadable!]
  6. Essama-Nssah B. & Lambert, Peter J., 2006. "Measuring the pro-poorness of income growth within an elasticity framework," Policy Research Working Paper Series 4035, The World Bank. [Downloadable!]
  7. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  8. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, Oxford University Press, vol. 11(2), pages 357-82, May.
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  9. B. Essama-Nssah & Peter J. Lambert, 2006. "Measuring the Pro-Poorness of Income Growth Within an Elasticity Framework," University of Oregon Economics Department Working Papers 2006-12, University of Oregon Economics Department. [Downloadable!]
  10. Ferreira, Francisco H.G. & Leite, Phillippe G. & Wai-Poi, Matthew, 2007. "Trade Liberalization, Employment Flows and Wage Inequality in Brazil," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  11. Ferreira, Afonso, 2000. "Convergence in Brazil: Recent Trends and Long-Run Prospects," Applied Economics, Taylor and Francis Journals, vol. 32(4), pages 479-89, March. [Downloadable!] (restricted)
  12. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, Oxford University Press, vol. 10(1), pages 1-25, January.
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  14. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, Blackwell Publishing, vol. 39(2), pages 121-39, June.
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  16. Pedro Cavalcanti Ferreira & JosÈ Luiz Rossi, 2003. "New Evidence from Brazil on Trade Liberalization and Productivity Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1383-1405, November. [Downloadable!] (restricted)
  17. Daron Acemoglu & María Angélica Bautista & Pablo Querubín & James A. Robinson, 2007. "Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia," NBER Working Papers 13208, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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. [Downloadable!]
  2. 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. [Downloadable!]
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