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Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa

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  • Augustin Kwasi Fosu

Abstract

This study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub-Saharan Africa (SSA) compared to non-SSA, based on an unbalanced panel of 86 countries over 1977-2004. For all three measures of poverty - headcount, gap, and squared gap - the impact of GDP growth on poverty reduction is a decreasing function of initial inequality. The impacts are similar in direction for SSA and non-SSA, so that within both regions there are considerable disparities in the responsiveness of poverty to income growth, depending on inequality. Nevertheless, the income-growth elasticity is substantially less for SSA, implying relatively small poverty-reduction response to growth.

Suggested Citation

  • Augustin Kwasi Fosu, 2009. "Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 726-745.
  • Handle: RePEc:taf:jdevst:v:45:y:2009:i:5:p:726-745
    DOI: 10.1080/00220380802663633
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