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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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    File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB114.pdf
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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. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
    2. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank.
    3. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
    4. Stephan Klasen, 2003. "In Search of The Holy Grail: How to Achieve Pro-Poor Growth ?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 096, Ibero-America Institute for Economic Research.
    5. 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.
    6. World Bank, 2001. "Croatia : Economic Vulnerability and Welfare Study," World Bank Other Operational Studies 15698, The World Bank.
    7. 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.
    8. World Bank, 2003. "Moldova : Public Economic Management Review," World Bank Other Operational Studies 14834, The World Bank.
    9. Christina D. Romer & David H. Romer, 1998. "Monetary Policy and the Well-Being of the Poor," NBER Working Papers 6793, National Bureau of Economic Research, Inc.
    10. Bardhan, Pranab, 1990. "Symposium on the State and Economic Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 3-7, Summer.
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