IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v30y2013icp375-393.html
   My bibliography  Save this article

The relationship between growth–inequality–poverty triangle and pro-poor growth policies in Pakistan: The twin disappointments

Author

Listed:
  • Zaman, Khalid
  • Khilji, Bashir Ahmad

Abstract

The objective of the study is to examine the relationship between growth, inequality and poverty in the context of rural, urban and national levels. Further, this study evaluates pro-poor growth policies in Pakistan during the period of 1964–2011. The regression model encompassing the impact of economic growth and inequality on poverty reflects that a 1% increase in income while keeping the distribution constant reduces poverty around 0.162% in rural, 0.256% in urban, 0.471% in national pooled and 0.276% in national weighted regression. An increase in Gini coefficient while holding the income constant tends to increase poverty in the national weighted by 2.641%, and in the national pooled around 1.721% respectively. Subsequently, at urban and rural regions, it creates proportionally more poor households in the urban areas (elasticity 1.231) than in the rural areas (elasticity 0.928). The study measures pro-poor growth index that captures gains and losses of growth rates due to changes in the distribution of consumption. The gains imply pro-poor growth, while the losses imply anti-poor growth. Total growth spells in this study are 180 including 20 surveys for rural, 20 surveys for urban and 20 surveys for overall Pakistan. However, the study used three different poverty measures i.e., household count (HHC), poverty gap (PG) and squared poverty gap (SPG), evaluating 60 surveys for each poverty measure. The results conclude that out of the 180 growth spells, 63 growth spells had negative growth rates and 117 spells had positive growth rates. Of the 117 spells when growth rates were positive, growth was pro-poor in 64 cases and anti-poor in 53 cases. In 25 out of 63 spells of negative growth rates, the poor suffered proportionally a greater decline in their consumption compared to the non-poor. Thus, growth processes have not generally been favorable to the poor.

Suggested Citation

  • Zaman, Khalid & Khilji, Bashir Ahmad, 2013. "The relationship between growth–inequality–poverty triangle and pro-poor growth policies in Pakistan: The twin disappointments," Economic Modelling, Elsevier, vol. 30(C), pages 375-393.
  • Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:375-393
    DOI: 10.1016/j.econmod.2012.09.023
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999312002982
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.econmod.2012.09.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rashida Haq & Uzma Zia, 2009. "Does Governance Contribute to Pro-poor Growth? Evidence from Pakistan," Governance Working Papers 22980, East Asian Bureau of Economic Research.
    2. Salman Syed Ali & Sayyid Tahir, 1999. "Dynamics of Growth, Poverty, and Inequality in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 837-858.
    3. Nanak Kakwani & Shahid Khandker & Hyun H. Son, 2004. "Pro-poor growth: concepts and measurement with country case studies," Working Papers 1, International Policy Centre for Inclusive Growth.
    4. Pernia, Ernesto & Kakwani, Nanak, 2000. "What is Pro-poor Growth?," MPRA Paper 104987, University Library of Munich, Germany.
    5. Hari Ram Lohano, 2009. "Poverty Dynamics in Rural Sindh, Pakistan," Working Papers id:2334, eSocialSciences.
    6. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    7. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    8. Hyun H. Son & Nanak Kakwani, 2006. "Global Estimates of Pro-Poor Growth," Working Papers 31, International Policy Centre for Inclusive Growth.
    9. Amjad,Rashid, 2008. "Private Industrial Investment in Pakistan," Cambridge Books, Cambridge University Press, number 9780521053617, October.
    10. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
    11. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
    12. Khalid Zaman & Waseem Ikram & Iqtidar Ali Shah, 2010. "Bivariate cointegration between poverty and environment: a case study of Pakistan (1980-2009)," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 53(8), pages 977-989.
    13. Hafiz A. Pasha & T. Palanivel, 2003. "Pro-poor Growth and Policies: The Asian Experience," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 42(4), pages 313-348.
    14. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    15. Heshmati, Almas, 2004. "Growth, Inequality and Poverty Relationships," IZA Discussion Papers 1338, Institute of Labor Economics (IZA).
    16. Gelaw, Fekadu, 2009. "The Relationship Between Poverty, Inequality, and Growth in the Rural Ethiopia: Micro Evidence," 2009 Conference, August 16-22, 2009, Beijing, China 51915, International Association of Agricultural Economists.
    17. Vincenzo Lombardo, 2011. "Growth and Inequality Effects on Poverty Reduction in Italy," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 241-280.
    18. Rodriguez, Edgard R, 1998. "International Migration and Income Distribution in the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 46(2), pages 329-350, January.
    19. Muhammad Omer & Sarah Jafri, 2008. "Pro-Poor Growth in Pakistan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 9(1), pages 51-68, June.
    20. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    21. Ravallion, Martin, 1995. "Growth and poverty: Evidence for developing countries in the 1980s," Economics Letters, Elsevier, vol. 48(3-4), pages 411-417, June.
    22. Hyun H. Son & Nanak Kakwani, 2004. "Economic growth and poverty reduction: initial conditions matter," Working Papers 2, International Policy Centre for Inclusive Growth.
    23. repec:bla:revinw:v:39:y:1993:i:2:p:121-39 is not listed on IDEAS
    24. Nanak Kakwani & Hyun H. Son, 2008. "Poverty Equivalent Growth Rate," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(4), pages 643-655, December.
    25. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research.
    26. Zaman, Khalid & Khan, Muhammad Mushtaq & Ahmad, Mehboob, 2012. "The relationship between foreign direct investment and pro-poor growth policies in Pakistan: The new interface," Economic Modelling, Elsevier, vol. 29(4), pages 1220-1227.
    27. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
    28. Bhagwati, Jagdish N., 1988. "Poverty and public policy," World Development, Elsevier, vol. 16(5), pages 539-555, May.
    29. Mr. Mahmood Hasan Khan, 2002. "When is Economic Growth Pro-Poor? Experiences in Malaysia and Pakistan," IMF Working Papers 2002/085, International Monetary Fund.
    30. Son, Hyun Hwa, 2004. "A note on pro-poor growth," Economics Letters, Elsevier, vol. 82(3), pages 307-314, March.
    31. Luo, Xubei & Zhu, Nong, 2008. "Rising income inequality in China : a race to the top," Policy Research Working Paper Series 4700, The World Bank.
    32. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    33. Rapsomanikis, George & Maltsoglou, Irini, 2005. "The Contribution of Livestock to Household Income in Vietnam: A household typology based analysis," PPLPI Working Papers 23771, Food and Agriculture Organization of the United Nations, Pro-Poor Livestock Policy Initiative.
    34. Khalid Zaman & Iqtidar Ali Shah & Muhammad Mushtaq Khan & Mehboob Ahmad, 2012. "The growth, inequality and poverty triangle: new evidence from a panel of SAARC countries," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(5), pages 485-500.
    35. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sadia ABBAS* & M. Masood AZEEM** & Khuda BAKHSH* & Alvina FATIMA* & Abdus SAMIE*, 2014. "POVERTY REDUCTION IN PAKISTAN: The Role of Agricultural and Industrial Subsector’s Growth," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 24(2), pages 143-157.
    2. Saari, M. Yusof & Dietzenbacher, Erik & Los, Bart, 2014. "Production interdependencies and poverty reduction across ethnic groups in Malaysia," Economic Modelling, Elsevier, vol. 42(C), pages 146-158.
    3. Mehmet Mercan & Ozlem Azer, 2013. "The Relationship between Economic Growth and Income Distribution in Turkey and the Turkish Republics of Central Asia and Caucasia: Dynamic Panel Data Analysis with Structural Breaks," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(2), pages 165-182, December.
    4. M. Shabri Abd. Majid & Sovia Dewi & Aliasuddin & Salina H. Kassim, 2019. "Does Financial Development Reduce Poverty? Empirical Evidence from Indonesia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(3), pages 1019-1036, September.
    5. Saboor, Abdul & Khan, Atta Ullah & Hussain, Abid & Ali, Ikram & Mahmood, Khalid, 2015. "Multidimensional deprivations in Pakistan: Regional variations and temporal shifts," The Quarterly Review of Economics and Finance, Elsevier, vol. 56(C), pages 57-67.
    6. Julian Augusto Casas Herrera, 2020. "Develando el vínculo entre la desigualdad y la pobreza," Apuntes del Cenes, Universidad Pedagógica y Tecnológica de Colombia, vol. 39(69), pages 39-68, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Khan & Muhammad Khan & Khalid Zaman & Umar Hassan & Sobia Umar, 2014. "Global estimates of growth–inequality–poverty (GIP) triangle: evidence from World Bank’s classification countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2631-2646, September.
    2. Nanak Kakwani & Hyun H. Son, 2006. "Pro-Poor Growth: The Asian Experience," WIDER Working Paper Series RP2006-56, World Institute for Development Economic Research (UNU-WIDER).
    3. Deutsch, Joseph & Silber, Jacques, 2011. "On various ways of measuring pro-poor growth," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 5, pages 1-57.
    4. Aadil Hameed Shah & Atta Ullah Khan & Liurong Pan & Asad Amin & Abbas Ali Chandio, 2022. "Reflections of Pro-Poor Growth across Agro-Climatic Zones for Farming and Non-Farming Communities: Evidence from Punjab, Pakistan," IJERPH, MDPI, vol. 19(9), pages 1-16, May.
    5. Tomasz Panek, 2018. "Wzrost sprzyjaj¹cy ubogim: koncepcje i pomiar dla polski w latach 2005-2015," Working Papers 80, Institute of Statistics and Demography, Warsaw School of Economics.
    6. Negre, Mario, 2010. "Concepts and Operationalization of Pro-Poor Growth," WIDER Working Paper Series 047, World Institute for Development Economic Research (UNU-WIDER).
    7. Khalid Zaman & Sadaf Shamsuddin, 2018. "Linear and Non-linear Relationships Between Growth, Inequality, and Poverty in a Panel of Latin America and the Caribbean Countries: A New Evidence of Pro-poor Growth," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(2), pages 595-619, April.
    8. Sami Bibi, 2006. "Growth with Equity is Better for the Poor," Cahiers de recherche 0640, CIRPEE.
    9. Tomasz Panek, 2019. "Czy wzrost gospodarczy w Polsce w latach 2005 -2015 był korzystny dla ubogich?," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 5-39.
    10. B. Essama‐Nssah & Peter J. Lambert, 2009. "Measuring Pro‐Poorness: A Unifying Approach With New Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 752-778, September.
    11. Zaman, Khalid & Khan, Muhammad Mushtaq & Ahmad, Mehboob, 2012. "The relationship between foreign direct investment and pro-poor growth policies in Pakistan: The new interface," Economic Modelling, Elsevier, vol. 29(4), pages 1220-1227.
    12. Abdelkrim Araar & Jean‐Yves Duclos & Mathieu Audet & Paul Makdissi, 2009. "Testing For Pro‐Poorness Of Growth, With An Application To Mexico," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(4), pages 853-881, December.
    13. Sami Bibi, 2005. "When is Economic Growth Pro-Poor? Evidence from Tunisia," Cahiers de recherche 0522, CIRPEE.
    14. Christophe EHRHART, 2012. "La Croissance A-T-Elle Été Favorable Aux Pauvres En Égypte Sur La Période 1990-2004 ?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 35, pages 37-55.
    15. 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.
    16. Kacem, Rami Ben Haj, 2013. "Monetary versus non-monetary pro-poor growth: Evidence from rural Ethiopia between 2004 and 2009," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 7, pages 1-22.
    17. Ismael Ahamdanech & Carmelo García-Pérez & Mercedes Prieto-Alaiz, 2020. "A Stochastic Dominance Approach to Evaluating Pro-Poor Growth—An Application to the Spanish Case," Sustainability, MDPI, vol. 12(5), pages 1-16, February.
    18. Marek Kośny & Gastón Yalonetzky, 2015. "Relative income change and pro-poor growth," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(3), pages 311-327, December.
    19. Harmáček, Jaromír & Syrovátka, Miroslav & Dušková, Lenka, 2017. "Pro-poor growth in East Africa," The Quarterly Review of Economics and Finance, Elsevier, vol. 64(C), pages 82-93.
    20. Francisco Azpitarte, 2014. "Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 871-905, July.

    More about this item

    Keywords

    Poverty; Growth; Inequality; Pro-growth; Pro-poor growth; Pakistan;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Recognized plagiarism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:375-393. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.