Pro-Growth, Pro-Poor: Is There a Tradeoff?
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...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/08/5141895/pro-growth-pro-poor-tradeoff http://hdl.handle.net/10986/14124 |
| Summary: | 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 to
higher 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. |
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