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The Recent Growth Resurgence in Africa and Poverty Reduction: Assessing the Context and Evidence

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  • Augustin K. Fosu

Abstract

While economic growth in Africa has resurged substantially since the mid-to-late 1990s, the amount of poverty reduction seems much less spectacular. Building on other studies, the paper explores the translation of the recent growth to poverty reduction using 1985-2013 PovcalNet (World Bank) data. It assesses the relative abilities of various panel-data methodologies to predict poverty changes based on income-inequality decompositions. Surprisingly, SYSGMM performs substantially worse than Fixed Effects and Random Effects. The analysis is conducted for both the $1.25 and $2.00 poverty lines, and for the ‘spread’ and ‘depth’ of poverty, as well as for the usual popular measure, the headcount ratio. Although income growth appears to be the main force behind poverty reduction in Africa, the decomposition reveals striking differences across countries with respect to the relative roles of inequality and income.

Suggested Citation

  • Augustin K. Fosu, 2016. "The Recent Growth Resurgence in Africa and Poverty Reduction: Assessing the Context and Evidence," CSAE Working Paper Series 2016-11, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2016-11
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    References listed on IDEAS

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    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    3. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634, December.
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    Cited by:

    1. Kouadio, Hugues Kouassi & Gakpa, Lewis-Landry, 2022. "Do economic growth and institutional quality reduce poverty and inequality in West Africa?," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 41-63.
    2. Hamza Saoudi, 2019. "Les cycles économiques ont-ils un effet asymétrique sur le chômage et la pauvreté ? Cas du Maroc," Policy notes & Policy briefs 1912, Policy Center for the New South.
    3. Hamza Saoudi, 2019. "Les cycles économiques ont-ils un effet asymétrique sur le chômage et la pauvreté ? Cas du Maroc," Research papers & Policy papers 1902, Policy Center for the New South.
    4. Ademola Obafemi YOUNG, 2019. "Why Has Growth Not Trickled Down to the Poor? A Study of Nigeria," Review of European Studies, Canadian Center of Science and Education, vol. 11(1), pages 156-156, December.

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    More about this item

    Keywords

    Growth resurgence; income; inequality; poverty reduction; Africa;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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