A Structural Analysis of Growth and Poverty in the Short-Term
World Bank - Poverty Reduction and Economic Management Network (PRMVP); University of Turin - Department of Economics
September 10, 2009
The Journal of Developing Areas, Vol. 43, No. 2, pp. 19-39, Spring 2010
“Growth is good for the poor” is a ubiquitous statement and one generally backed by theory, research and history. In the long-run, growth reduces poverty. Yet, growth in output - per se - is neither a necessary nor a sufficient condition for poverty reduction in the short-term. The paper uses a number of parametric and non-parametric methodologies to assess the relation between growth and poverty in Kazakhstan, a country that experienced rapid growth and poverty reduction in the short-term. Combining macro and micro regional data, we find a very small trickle-down effect of output growth on household incomes and no evidence that output growth is correlated with poverty reduction. We find instead that pro-poor growth in household income explains well poverty reduction.
Accepted Paper Series
Date posted: September 11, 2009
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