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Pro-growth, pro-poor : is there a tradeoff?


  • Lopez, J. Humberto


Is a pro-growth strategy always the best pro-poor strategy? To address this issue, the author provides an empirical evaluation of the impact of a series of pro-growth policies on inequality and headcount poverty. He relies on a large macroeconomic data set and estimate dynamic panel models that allows him to differentiate between the short- and long-run impacts of the policies under consideration on growth, inequality, and poverty. The author's findings indicate that regardless of their impact on inequality, pro-growth policies lead to lower poverty levels in the long run. However, he also finds evidence indicating that some of these policies may lead tohigher inequality and, under plausible assumptions for the distribution of income, to higher poverty levels in the short run. These findings would justify the adoption of a pro-growth policy package as the center of any poverty reduction strategy, together with pro-poor measures that complement such a package by offsetting potential short-run increases in poverty.

Suggested Citation

  • Lopez, J. Humberto, 2004. "Pro-growth, pro-poor : is there a tradeoff?," Policy Research Working Paper Series 3378, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3378

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    Cited by:

    1. Gutierrez, Catalina & Orecchia, Carlo & Paci, Pierella & Serneels, Pieter, 2007. "Does employment generation really matter for poverty reduction ?," Policy Research Working Paper Series 4432, The World Bank.
    2. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
    3. Loayza, Norman V. & Raddatz, Claudio, 2010. "The composition of growth matters for poverty alleviation," Journal of Development Economics, Elsevier, vol. 93(1), pages 137-151, September.
    4. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
    5. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2004. "Finance, inequality, and poverty: cross-country evidence," Policy Research Working Paper Series 3338, The World Bank.
    6. Rashida Haq & Uzma Zia, 2009. "Does Governance Contribute to Pro-poor Growth? Evidence from Pakistan," Governance Working Papers 22980, East Asian Bureau of Economic Research.
    7. Alessandra Bonfiglioli, 2004. "Equities and Inequality," 2004 Meeting Papers 256, Society for Economic Dynamics.
    8. Tsai, Pan-Long & Huang, Chao-Hsi, 2007. "Openness, Growth and Poverty: The Case of Taiwan," World Development, Elsevier, vol. 35(11), pages 1858-1871, November.
    9. World Bank, 2005. "Colombia : Country Economic Memorandum, The Foundations for Competitiveness," World Bank Other Operational Studies 8807, The World Bank.
    10. Christina Wieser, 2011. "Determinants of the Growth Elasticity of Poverty Reduction. Why the Impact on Poverty Reduction is Large in Some Developing Countries and Small in Others," WIFO Working Papers 406, WIFO.
    11. Muhammad Shahbaz, 2013. "Financial Development, Economics Growth, Income Inequality Nexus: A Case Study of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(3), pages 24-47, March.
    12. Cook, Paul & Uchida, Yuichiro, 2008. "Structural change, competition and income distribution," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 274-286, May.
    13. Resnick, Danielle & Birner, Regina, 2006. "Does good governance contribute to pro-poor growth?: a review of the evidence from cross-country studies," DSGD discussion papers 30, International Food Policy Research Institute (IFPRI).
    14. Rashida Haq & Uzma Zia, 2006. "Governance and Pro-poor Growth: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 761-776.
    15. Silvia Adriana Peluffo Geronazzo, 2016. "Increased trade openness, productivity, employment and wages: a difference-in-differences approach," Estudios Regionales en Economía, Población y Desarrollo. Cuadernos de Trabajo de la Universidad Autónoma de Ciudad Juárez. 32, Cuerpo Académico 41 de la Universidad Autónoma de Ciudad Juárez, revised 01 Apr 2016.
    16. Ayal Kimhi, 2004. "Growth, Inequality and Labor Markets in LDCs: A Survey," CESifo Working Paper Series 1281, CESifo Group Munich.


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