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The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest

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  • Nancy Birdsall

Abstract

Inclusive growth is widely embraced as the central economic goal for developing countries, but the concept is not well defined in the development economics literature. Since the early 1990s, the focus has been primarily on pro-poor growth, with the “poor” being people living on less than $1 day, or in some regions $2 day. The idea of pro-poor growth emerged in the early 1990s as a counterpoint to a concern with growth alone (measured in per-capita income) and is generally defined as growth which benefits the poor as much or more than the rest of the population. Examples include conditional cash transfers, which target the poor while minimizing the fiscal burden on the public sector, and donors’ emphasizing primary over higher education as an assured way to benefit the poor while investing in long-term growth through increases in human capital. Yet these pro-poor, inclusive policies are not necessarily without tradeoffs in fostering long-run growth. In this paper I argue that the concept of inclusive growth should go beyond the traditional emphasis on the poor (and the rest) and take into account changes in the size and economic command of the group conventionally defined as neither poor nor rich, i.e., the middle class.

Suggested Citation

  • Nancy Birdsall, 2010. "The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest," Working Papers 207, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:207
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    File URL: http://www.cgdev.org/content/publications/detail/1423994
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    Cited by:

    1. Amrita Chhachhi & Jan Nederveen Pieterse, 2014. "Protest Begets Progress, Probably: Human Development Report 2013," Development and Change, International Institute of Social Studies, vol. 45(5), pages 1205-1218, September.
    2. Handley, Antoinette, 2014. "Varieties of capitalists? The middle class, private sector and economic outcomes in Africa," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    3. Lukas Schlogl & Andy Sumner, 2014. "How Middle Class are the ‘Emerging Middle’ or ‘Scooter Class’ in Indonesia? A Household Asset Approach to Social Stratification," Working Papers in Economics and Development Studies (WoPEDS) 201407, Department of Economics, Padjadjaran University, revised May 2014.
    4. Çakır, Mustafa Yavuz & Kabundi, Alain, 2013. "Trade shocks from BRIC to South Africa: A global VAR analysis," Economic Modelling, Elsevier, vol. 32(C), pages 190-202.
    5. repec:bla:revinw:v:63:y:2017:i:4:p:608-632 is not listed on IDEAS
    6. Eduardo Lora & Johanna Fajardo, 2013. "Latin American Middle Classes: The Distance Between Perception and Reality," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2013), pages 33-60, August.
    7. Akaev, Askar & Sarygulov, Askar & Sokolov, Valentin, 2012. "The Formation of the Middle Class as a Way to Overcome Economic Inequality (Analyzing the International Experience)," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 102-117, October.
    8. Alain Desdoigts & Fernando Jaramillo, 2017. "Learning by Doing, Inequality, and Sustained Growth: A Middle-class Perspective," EUSP Department of Economics Working Paper Series 2017/05, European University at St. Petersburg, Department of Economics.
    9. Abebe Shimeles & Mthuli Ncube, 2015. "The Making of the Middle-Class in Africa: Evidence from DHS Data," Journal of Development Studies, Taylor & Francis Journals, vol. 51(2), pages 178-193, February.
    10. repec:taf:pocoec:v:29:y:2017:i:2:p:250-264 is not listed on IDEAS
    11. Maitra, Sudeshna, 2016. "The poor get poorer: Tracking relative poverty in India using a durables-based mixture model," Journal of Development Economics, Elsevier, vol. 119(C), pages 110-120.

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    Keywords

    middle class; developing countries; growth; economics; development; poverty; human capital;

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