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Promoting Shared Prosperity in South Asia

Author

Listed:
  • Ghani, Ejaz

    (World Bank)

  • Iyer, Lakshmi

    (Harvard Business School)

  • Mishra, Saurabh

    (International Monetary Fund)

Abstract

The geography of poverty has changed. More than 70 percent of the world’s poor live not in low-income countries, but in middle-income countries. In 2008, nearly 570 million people lived on less than US$1.25 a day in South Asia, compared to 385 million in sub-Saharan Africa. In addition, nearly 70 percent of the poor people in South Asia live in the lagging regions. Improving the living standards of these regions is crucial to achieving the goal of shared prosperity. Economic growth is not sufficient to enable the lagging regions of South Asia to catch up with the leading regions, in terms of proportional reductions in poverty rates. Policies must be specifically targeted toward achieving greater growth and poverty reduction in these regions. One particular policy channel to achieve shared prosperity is pro-poor fiscal transfers. For the most part, interstate fiscal transfers in South Asian countries do promote equity through transfer of resources to poorer regions, but this outcome usually occurs when pro-poor redistribution has explicit rules and transparency. Further, simply directing financial resources to lagging regions may not be sufficient, and may need to be complemented with increases in capacity, transparency, and participation to facilitate accountability at the local level.

Suggested Citation

  • Ghani, Ejaz & Iyer, Lakshmi & Mishra, Saurabh, 2013. "Promoting Shared Prosperity in South Asia," World Bank - Economic Premise, The World Bank, issue 110, pages 1-8, March.
  • Handle: RePEc:wbk:prmecp:ep110
    as

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    References listed on IDEAS

    as
    1. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
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    3. Ghani, Ejaz (ed.), 2010. "The Poor Half Billion in South Asia: What is Holding Back Lagging Regions?," OUP Catalogue, Oxford University Press, number 9780198068846.
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    6. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, Oxford University Press, vol. 125(4), pages 1577-1625.
    7. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
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    Cited by:

    1. Martin Rama & Tara Béteille & Yue Li & Pradeep K. Mitra & John Lincoln Newman, 2015. "Addressing Inequality in South Asia," World Bank Publications - Books, The World Bank Group, number 20395, December.
    2. Debapriya Bhattacharya, 2015. "Regional Integration and the Post-2015 Framework," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(2_suppl), pages 119-141, September.

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    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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