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Do poverty traps exist ?

Author

Listed:
  • Kraay, Aart
  • McKenzie, David

Abstract

This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Moreover, the empirical evidence regarding several canonical mechanisms underlying models of poverty traps is mixed.

Suggested Citation

  • Kraay, Aart & McKenzie, David, 2014. "Do poverty traps exist ?," Policy Research Working Paper Series 6835, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6835
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    References listed on IDEAS

    as
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    Blog mentions

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    1. Y a-t-il des trappes à pauvreté ?
      by ? in D'un champ l'autre on 2014-04-12 04:57:00

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    Cited by:

    1. Nga Thi Viet Nguyen & Felipe F. Dizon, 2017. "The Geography of Welfare in Benin, Burkina Faso, Côte d'Ivoire, and Togo," World Bank Other Operational Studies 27994, The World Bank.
    2. repec:nbr:nberch:13828 is not listed on IDEAS
    3. Pereira, Luiz C. Bresser, 2016. "Democracy and growth in pre-industrial countries," Textos para discussão 410, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    4. Arunachalam, Raj & Shenoy, Ajay, 2017. "Poverty traps, convergence, and the dynamics of household income," Journal of Development Economics, Elsevier, vol. 126(C), pages 215-230.
    5. Kurosaki, Takashi, 2017. "Household-Level Recovery after Floods in a Tribal and Conflict-Ridden Society," World Development, Elsevier, vol. 94(C), pages 51-63.
    6. repec:nbr:nberch:13950 is not listed on IDEAS
    7. Patrick Carter & Jonathan R. W. Temple, 2017. "Virtuous Circles and the Case for Aid," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(2), pages 397-425, June.
    8. Barbier, Edward B., 2016. "Is green growth relevant for poor economies?," Resource and Energy Economics, Elsevier, vol. 45(C), pages 178-191.
    9. repec:nbr:nberch:13951 is not listed on IDEAS
    10. Lara Ibarra,Gabriel & Martinez Cruz,Adan L., 2015. "Exploring the sources of downward bias in measuring inequality of opportunity," Policy Research Working Paper Series 7458, The World Bank.
    11. Kleemans, Marieke, 2015. "Migration Choice under Risk and Liquidity Constraints," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 200702, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    12. S. Nazrul Islam & John Winkel, 2017. "Climate Change and Social Inequality," Working Papers 152, United Nations, Department of Economics and Social Affairs.
    13. Edward B. Barbier & Ramón E. López & Jacob P. Hochard, 2016. "Debt, Poverty and Resource Management in a Rural Smallholder Economy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 411-427, February.
    14. Roos Michael W. M., 2015. "Die Komplexitätsökonomik und ihre Implikationen für die Wirtschaftspolitik," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 379-392, December.
    15. Meysonnat, Aline & Muysken, Joan & Zon, Adriaan van, 2015. "Poverty traps: the neglected role of vitality," MERIT Working Papers 052, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Stuart C. Carr & Jane Parker & James Arrowsmith & Jarrod Haar & Harvey Jones, 0. "Humanistic Management and Living Wages: a Case of Compelling Connections?," Humanistic Management Journal, Springer, vol. 0, pages 1-22.
    17. Martin Ravallion, 2016. "The World Bank: Why It Is Still Needed and Why It Still Disappoints," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 77-94, Winter.
    18. Imbert, Clément, 2016. "Short-term Migration Rural Workfare Programs and Urban Labor Markets - Evidence from India," The Warwick Economics Research Paper Series (TWERPS) 1116, University of Warwick, Department of Economics.
    19. Stuart C. Carr & Jane Parker & James Arrowsmith & Jarrod Haar & Harvey Jones, 2017. "Humanistic Management and Living Wages: a Case of Compelling Connections?," Humanistic Management Journal, Springer, vol. 1(2), pages 215-236, April.
    20. Kurosaki, Takashi, 2015. "Household-Level Recovery after Floods in a Tribal and Conflict-Ridden Society," CEI Working Paper Series 2015-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    21. repec:eee:wdevel:v:103:y:2018:i:c:p:255-267 is not listed on IDEAS

    More about this item

    Keywords

    Rural Poverty Reduction; Achieving Shared Growth; Economic Theory&Research; Debt Markets; Poverty Reduction Strategies;

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