IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v45y2006i3p439-459.html
   My bibliography  Save this article

Does Inequality Matter for Poverty Reduction? Evidence from Pakistan’s Poverty Trends

Author

Listed:
  • Haroon Jamal

    (Social Policy and Development Centre, Karachi.)

Abstract

The paper explores the linkages between poverty, growth and inequality in the context of Pakistan. Time series macro data are used for the period 1979 to 2002. Consistent poverty and inequality measures are interpolated to facilitate the estimation of poverty elasticity with respect to growth and inequality in a multivariate regression framework. The paper also attempts to find out macroeconomic and structural correlates of inequality. The empirical findings—high poverty elasticity with respect to inequality measures—confirm the importance of inequality in poverty reducing effort. Inflation, sectoral wage gap, and terms of trade in favour of manufacturing exacerbate inequality, while progressive taxation, investment and development expenditure on social services play a significant role in reducing inequality. The results also indicate a positive correlation between per capita GDP and income inequality.

Suggested Citation

  • Haroon Jamal, 2006. "Does Inequality Matter for Poverty Reduction? Evidence from Pakistan’s Poverty Trends," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(3), pages 439-459.
    • Handle: RePEc:pid:journl:v:45:y:2006:i:3:p:439-459
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume3/439-459.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
    2. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    3. 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.
    4. Adams, Richard Jr., 2004. "Economic Growth, Inequality and Poverty: Estimating the Growth Elasticity of Poverty," World Development, Elsevier, vol. 32(12), pages 1989-2014, December.
    5. 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.
    6. Birdsall, Nancy & Ross, David & Sabot, Richard, 1995. "Inequality and Growth Reconsidered: Lessons from East Asia," The World Bank Economic Review, World Bank, vol. 9(3), pages 477-508, September.
    7. Stephen Knowles, 2005. "Inequality and Economic Growth: The Empirical Relationship Reconsidered in the Light of Comparable Data," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 135-159.
    8. Howard White & Edward Anderson, 2001. "Growth versus Distribution: Does the Pattern of Growth Matter?," Development Policy Review, Overseas Development Institute, vol. 19(3), pages 267-289, September.
    9. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    10. Kanbur, Ravi & Lustig, Nora, 1999. "Why is Inequality Back on the Agenda?," Working Papers 127690, Cornell University, Department of Applied Economics and Management.
    11. repec:bla:revinw:v:39:y:1993:i:2:p:121-39 is not listed on IDEAS
    12. Rashid Amjad & A.R. Kemal, 1997. "Macroeconomic Policies and their Impact on Poverty Alleviation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(1), pages 39-68.
    Full references (including those not matched with items on IDEAS)

    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. Martin Ravallion, 2012. "Why Don't We See Poverty Convergence?," American Economic Review, American Economic Association, vol. 102(1), pages 504-523, February.
    2. Jennifer Mbabazi & Oliver Morrissey & Chris Milner, 2001. "Are Inequality and Trade Liberalization Influences on Growth and Poverty?," WIDER Working Paper Series DP2001-132, World Institute for Development Economic Research (UNU-WIDER).
    3. Ademola Obafemi Young, 2019. "Growth Impacts of Income Inequality: Empirical Evidence From Nigeria," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 226-262, December.
    4. Hichem AYAD, 2016. "Poverty, Inequality And Economic Growth In Algeria: An Ardl Approach," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 5(1), pages 1-20, JULY.
    5. Christophe Ehrhart, 2009. "The effects of inequality on growth: a survey of the theoretical and empirical literature," Working Papers 107, ECINEQ, Society for the Study of Economic Inequality.
    6. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.
    7. Adalgiso Amendola & Roberto Dell�Anno, 2014. "Income inequality and economic growth: an empirical investigation in Mediterranean countries," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 68(2), pages 35-58, April-Jun.
    8. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    9. Marrero, Gustavo A. & Rodríguez, Juan G., 2013. "Inequality of opportunity and growth," Journal of Development Economics, Elsevier, vol. 104(C), pages 107-122.
    10. Syed Kalim Hyder & Qazi Masood Ahmed & Haroon Jamal, 2015. "Simulating the Impact of Income Distribution on Poverty Reduction," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 931-944.
    11. Frances Stewart, 2003. "Income distribution and development," Chapters, in: John Toye (ed.), Trade and Development, chapter 10, Edward Elgar Publishing.
    12. Hassine, Nadia Belhaj, 2015. "Economic Inequality in the Arab Region," World Development, Elsevier, vol. 66(C), pages 532-556.
    13. Roberto Dell'Anno & Adalgiso Amendola, 2015. "Social Exclusion and Economic Growth: An Empirical Investigation in European Economies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 274-301, June.
    14. Enisan Akinlo, Anthony, 2021. "Dynamic Linkages Between Government-Interventionists’ Policies, Growth, Inequality And Poverty In Nigeria," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(2), pages 45-64, June.
    15. Adams, Richard H. Jr., 2003. "Economic growth, inequality, and poverty : findings from a new data set," Policy Research Working Paper Series 2972, The World Bank.
    16. Heshmati, Almas, 2004. "Growth, Inequality and Poverty Relationships," IZA Discussion Papers 1338, Institute of Labor Economics (IZA).
    17. Mr. Michael Sarel, 1997. "How Macroeconomic Factors Affect Income Distribution: The Cross-Country Evidence," IMF Working Papers 1997/152, International Monetary Fund.
    18. Alaa Mohamd Shoukry & Musarrat Jabeen & Khalid Zaman & Showkat Gani & Alamzeb Aamir, 2018. "A note on poverty, growth, and inequality nexus: evidence from a panel of sub-Saharan African countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2173-2195, September.
    19. Eric Akobeng, 2017. "Gross Capital Formation, Institutions and Poverty in Sub-Saharan Africa," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 20(2), pages 136-164, April.
    20. Vinod Thomas, 2009. "Income Disparity and Growth," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 1(1), pages 63-86, January.

    More about this item

    Keywords

    Pakistan; Poverty Trend; Income Distribution; Poverty Elasticity with respect to Growth and Inequality;
    All these keywords.

    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

    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:pid:journl:v:45:y:2006:i:3:p:439-459. 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: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    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.