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Pro-poor Growth during Exceptional Growth. Evidence from a Transition Economy

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  • Paolo Verme

Abstract

The paper uses a range of methods to assess changes in income, poverty and income distribution between 2001 and 2002 in Kazakhstan. It is found that outstanding GDP growth has been translated into very modest growth in mean household income. However, both income poverty and inequality have decreased significantly and growth has been 'pro-poor', which is explained by changes in inequality accounting for almost all the changes in poverty. The elasticity of poverty with respect to both growth and inequality is also found to be high. These findings suggest that GDP changes can be, at times, disjoint from household income performance and that, when this happens, income redistribution can still play a key role for poverty reduction. Yet a much greater reduction in poverty would have occurred if mean income would also have risen. Hence, the distribution of GDP growth among factors of production and the distribution of income among households are the cornerstones of poverty reduction rather than GDP growth alone.

Suggested Citation

  • Paolo Verme, 2006. "Pro-poor Growth during Exceptional Growth. Evidence from a Transition Economy," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 3(1), pages 3-14, June.
  • Handle: RePEc:liu:liucej:v:3:y:2006:i:1:p:3-14
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    File URL: http://eaces.liuc.it/18242979200601/182429792006030101.pdf
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    Cited by:

    1. Brück, Tilman & Esenaliev, Damir & Kroeger, Antje & Kudebayeva, Alma & Mirkasimov, Bakhrom & Steiner, Susan, 2014. "Household survey data for research on well-being and behavior in Central Asia," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 819-835.
    2. Ivica Rubil, 2013. "Accounting for Regional Poverty Differences in Croatia: Exploring the Role of Disparities in Average Income and Inequality," Working Papers 1301, The Institute of Economics, Zagreb.
    3. David Aristei & Cristiano Perugini, 2014. "Speed and Sequencing of Transition Reforms and Income Inequality: A Panel Data Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 542-570, September.
    4. Wasiu Adekunle Are, 2012. "Growth and Income Redistribution Components of Changes in Poverty: A Decomposition Analysis for Ireland, 1987-2005," Working Papers 201231, School of Economics, University College Dublin.
    5. Alma Kudebayeva & Armando Barrientos, 2013. "A decade of poverty reduction in Kazakhstan 2000-2009: growth and/or redistribution?," Brooks World Poverty Institute Working Paper Series 18713, BWPI, The University of Manchester.

    More about this item

    Keywords

    Growth; Poverty; Inequality; Kazakhstan;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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