Measuring Pro-Poor Growth
It is important to know how aggregate economic growth or contraction was distributed according to initial levels of living. In particular, to what extent can it be said that growth was "pro-poor?" There are problems with past methods of a...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/08/1570715/measuring-pro-poor-growth http://hdl.handle.net/10986/19560 |
| Summary: | It is important to know how aggregate
economic growth or contraction was distributed according to
initial levels of living. In particular, to what extent can
it be said that growth was "pro-poor?" There are
problems with past methods of addressing this question,
notably that the measures used are inconsistent with the
properties that are considered desirable for a measure of
the level of poverty. The authors provide some new tools for
assessing to what extent the aggregate growth process in an
economy is pro-poor. The key measurement tools is the
"growth incidence curve," which gives growth rates
by quantiles (such as percentiles) ranked by income. Taking
the area under this curve up to the headcount index of
poverty gives a measure of the rate of pro-poor growth
consistent with the Watts index for the level of poverty.
The authors give examples using survey data for China during
the 1990s. Over 1990-99, the ordinary growth rate of
household income per capita in China was 7 percent a year.
The growth rate by quantile varied from 3 percent for the
poorest percentile to 11 percent for the richest, while the
rate of pro-poor growth was around 4 percent. The pattern
was reversed for a few years in the mid-1990s, when the rate
of pro-poor growth rose to 10 percent a year--above the
ordinary growth rate of 8 percent. |
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