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Poverty reduction, economic growth and inequality in Africa

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  • Fassil Fanta
  • Mukti Upadhyay

Abstract

We study the relationships among economic growth, inequality and poverty. Economists agree that growth is fundamental to reducing poverty. But the links among growth, distribution and poverty is still a subject of debate because the growth elasticity of poverty seems to differ from one country to another. Using a data set for 16 African countries, based on household budget surveys, we find strong support that poverty decreases in response to economic growth, with the estimated elasticity ranging between -0.5 and -1.10. Other variables, albeit important in varying degrees, are much less significant as determinants of poverty.

Suggested Citation

  • Fassil Fanta & Mukti Upadhyay, 2009. "Poverty reduction, economic growth and inequality in Africa," Applied Economics Letters, Taylor & Francis Journals, vol. 16(18), pages 1791-1794.
  • Handle: RePEc:taf:apeclt:v:16:y:2009:i:18:p:1791-1794
    DOI: 10.1080/13504850701719587
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    References listed on IDEAS

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    1. James E. Foster & Miguel Székely, 2008. "Is Economic Growth Good For The Poor? Tracking Low Incomes Using General Means," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1143-1172, November.
    2. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    3. James E. Foster & Miguel Székely, 2008. "Is Economic Growth Good For The Poor? Tracking Low Incomes Using General Means," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1143-1172, November.
    4. James E. Foster & Miguel Székely, 2001. "Is Economic Growth Good for the Poor?: Tracking Low Incomes Using General Means," IDB Publications (Working Papers) 1412, Inter-American Development Bank.
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    Cited by:

    1. Oberdabernig, Doris A., 2013. "Revisiting the Effects of IMF Programs on Poverty and Inequality," World Development, Elsevier, vol. 46(C), pages 113-142.
    2. Channing Arndt & Sam Jones & Finn Tarp, 2011. "Aid Effectiveness: Opening the Black Box," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
    3. T. M. Tonmoy Islam, 2016. "Estimating the Elasticity of Growth in the US Using the Generalized Means of Income," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(1), pages 95-112, October.
    4. Tregenna, Fiona, 2011. "Halving Poverty in South Africa: Growth and Distributional Aspects," WIDER Working Paper Series 060, World Institute for Development Economic Research (UNU-WIDER).
    5. Perera, Liyanage Devangi H. & Lee, Grace H.Y., 2013. "Have economic growth and institutional quality contributed to poverty and inequality reduction in Asia?," MPRA Paper 52763, University Library of Munich, Germany.

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