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Towards a strategy for pro-poor growth in South-Eastern Europe

  • Hermann Sautter


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    In order to qualify economic growth as “pro-poor”, at least per capita income-growth rates of the poor should be larger than the corresponding growth-rates of the non-poor resulting in a lower degree of distributional inequality. Measured in this sense, economic growth in South- Eastern Europe during the last 10-15 years was not pro-poor but pro-rich. Future growth can be changed towards the “pro-poor”-goal through a strategy with two “legs”: Stimulation of overall growth and specific programs to make economic growth “pro-poor”. Overall growth can be stimulated by good governance, macro-economic stability and the establishment of competitive markets. Specific programs should be focussed on sectors the poor work in (mainly agriculture), on regions the poor live in (mainly rural areas) and on the demand for factors the poor possess or are able to possess (labour). The paper discusses some elements of rural development, the possibilities of stimulating the demand for labour, and the necessary steps to improve the access of the poor to education and health-services. In addition to that, the problems of “pockets of poverty” are being discussed. A consistent strategy like this requires political decisiveness and administrative competence. It is hard to imagine that it can be materialized without giving the poor “voice” to influence the institutions and policies that affect their lives.

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    Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 114.

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    Length: 29 pages
    Date of creation: 14 Jul 2005
    Date of revision:
    Handle: RePEc:got:iaidps:114
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    1. Christina D. Romer & David H. Romer, 1998. "Monetary policy and the well-being of the poor," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 159-201.
    2. Bardhan, Pranab, 1990. "Symposium on the State and Economic Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 3-7, Summer.
    3. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
    4. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August.
    5. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    6. World Bank, 2001. "Croatia : Economic Vulnerability and Welfare Study," World Bank Other Operational Studies 15698, The World Bank.
    7. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    8. Stephan Klasen, 2004. "In Search of the Holy Grail: How to Achieve Pro-Poor Growth?," Macroeconomics 0401005, EconWPA.
    9. World Bank, 2003. "Moldova : Public Economic Management Review," World Bank Other Operational Studies 14834, The World Bank.
    10. Alesina, Alberto & Perotti, Roberto, 1994. "The Political Economy of Growth: A Critical Survey of the Recent Literature," World Bank Economic Review, World Bank Group, vol. 8(3), pages 351-71, September.
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