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Economic Growth and Poverty Reduction: Measurement and Policy Issues


Stephan Klasen


University of Goettingen (Gottingen) - Faculty of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

September 2005

OECD Working Paper No. 246

Abstract:     
The aim of this Working Paper is to broaden the debate on "pro-poor growth". An exclusive focus on the income dimension of poverty has neglected the non-income dimensions. After an examination of prominent views on the linkages between economic growth, inequality, and poverty reduction this paper discusses the proper definition and measurement of pro-poor growth. Bolivia serves as a case study to illustrate the usefulness of applying the analytical toolbox for pro-poor growth to non-income dimensions of poverty and offers some important new insights about differences in the evolution of both poverty dimensions. Growth in Bolivia has been more pro-poor in the non-income than in the income dimension. The analysis furthermore shows that extending use of the pro-poor growth toolbox to non-income dimensions of poverty greatly improves our understanding of the trends in non-income indicators. Such understanding is pivotal for a careful assessment of the linkages between income and non-income poverty along the entire income distribution. It is equally important for poverty monitoring and for defining policy interventions. It also allows deeper analysis of the relative merits of economic growth, compared to direct intervention aimed at improving non-income dimensions of poverty.

Number of Pages in PDF File: 55

Keywords: Pro-poor growth, income, growth, inequality, poverty reduction, Bolivia

JEL Classification: O

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Date posted: December 27, 2005  

Suggested Citation

Klasen, Stephan, Economic Growth and Poverty Reduction: Measurement and Policy Issues (September 2005). OECD Working Paper No. 246. Available at SSRN: http://ssrn.com/abstract=871449 or http://dx.doi.org/10.2139/ssrn.871449

Contact Information

Stephan Klasen (Contact Author)
University of Goettingen (Gottingen) - Faculty of Economics and Business Administration ( email )
Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49-551-397303 (Phone)
+49-551-397302 (Fax)
HOME PAGE: www.vwl.wiso.uni-goettingen.de/klasen.html
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
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