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A poverty-inequality trade-off?

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  • Ravallion, Martin

Abstract

The idea that developing countries face a trade-off between poverty and inequality has had considerable influence on thinking about development policy. The experience of developing countries in the 1990s does not, however, reveal any sign of a systematic trade-off between measures of absolute poverty and relative inequality. Indeed, falling inequality tends to come with falling poverty incidence. And rising inequality appears more likely to be putting a brake on poverty reduction than to be facilitating it. However, there is evidence of a trade-off for absolute inequality, suggesting that those who want a lower absolute gap between the rich and the poor must in general be willing to see lower absolute levels of living for poor people.

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  • Ravallion, Martin, 2005. "A poverty-inequality trade-off?," Policy Research Working Paper Series 3579, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3579
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    References listed on IDEAS

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    More about this item

    Keywords

    Rural Poverty Reduction; Services&Transfers to Poor; Safety Nets and Transfers; Governance Indicators; Inequality;
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