Poverty Reduction without Economic Growth? Explaining Brazil's Poverty Dynamics, 1985-2004

Poverty Reduction without Economic Growth? Explaining Brazil's Poverty Dynamics, 1985-2004

Brazil's slow pace of poverty reduction over the last two decades reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerab...

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Bibliographic Details
Main Authors:	Ferreira, Francisco H.G., Leite, Phillippe G., Ravallion, Martin
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ABSOLUTE POVERTY ABSOLUTE VALUE ACCESS TO ELECTRICITY ADULT POPULATION AGGREGATE GROWTH AGGREGATE LEVEL AGRICULTURAL GROWTH AGRICULTURAL SECTOR AGRICULTURAL WORKERS ANNUAL GROWTH ANNUAL GROWTH RATE ASSET DISTRIBUTION AVERAGE ANNUAL AVERAGE GROWTH AVERAGE INCOME BUDGET DEFICITS CALORIES PER DAY CASH TRANSFER PROGRAMS CHANGES IN POVERTY CONSUMER PRICE INDEX CONSUMPTION EXPENDITURE CORRELATES OF POVERTY COUNTERFACTUAL COUNTRY DATA CROSS-COUNTRY COMPARISONS CROSS-COUNTRY DATA CUMULATIVE DISTRIBUTION CUMULATIVE DISTRIBUTION FUNCTION DECLINE IN POVERTY DESCRIPTIVE STATISTICS DETERMINANTS OF POVERTY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT REPORT DEVELOPMENT RESEARCH DISTRIBUTIONAL EFFECT DISTRIBUTIONAL EFFECTS ECONOMETRIC ANALYSIS ECONOMIC ACTIVITIES ECONOMIC ACTIVITY ECONOMIC CONTRACTION ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC REFORMS ECONOMIC STAGNATION ECONOMICS LETTERS ELDERLY ERROR TERM ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS ESTIMATED ELASTICITY EXCHANGE RATE EXCHANGE RATE REGIME EXPLAINING CHANGES EXPLANATORY VARIABLES FAMILY CONSUMPTION FARM PRODUCTIVITY FIXED EFFECTS FOOD BASKET GINI COEFFICIENT GINI INDEX GOVERNMENT POLICIES GROSS DOMESTIC PRODUCT GROWING ECONOMY GROWTH COMPONENT GROWTH DATA GROWTH EFFECT GROWTH ELASTICITY GROWTH PERFORMANCE GROWTH PRO-POOR GROWTH PROCESS GROWTH RATE GROWTH RATES GROWTH SPELLS HIGH INEQUALITY HIGH INFLATION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD PER CAPITA INCOME HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD SURVEYS HUMAN CAPITAL HUMAN CAPITAL LEVELS HUMAN DEVELOPMENT ILLITERACY ILLITERACY RATE IMPACT ON POVERTY INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME GROWTH INCOME INEQUALITY INCOME REDISTRIBUTION INDEPENDENT VARIABLES INDIVIDUAL WELFARE INDUSTRIAL SECTOR INEQUALITY INEQUALITY CHANGES INEQUALITY CONSTANT INEQUALITY LEVELS INEQUALITY MEASURE INEQUALITY REDUCTION INFANT INFANT MORTALITY INFANT MORTALITY RATE INFANT MORTALITY RATES INFLATION RATE INSURANCE LABOR FORCE LIVESTOCK PRODUCTION LIVING STANDARDS LONG RUN MACROECONOMIC CONDITIONS MACROECONOMIC INSTABILITY MACROECONOMIC STABILIZATION MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEASUREMENT ERROR MEASUREMENT ERRORS NATIONAL ACCOUNTS NATIONAL POVERTY NATIONAL POVERTY LINE NEGATIVE EFFECT 0 HYPOTHESIS OUTPUT GROWTH PENSIONS POINT ESTIMATE POINT ESTIMATES POLICY DECISIONS POLICY ENVIRONMENT POLICY ISSUES POLICY REFORM POLICY REFORMS POLICY REGIME POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POLITICAL PARTICIPATION POLITICAL POWER POOR POOR HOUSEHOLDS POSITIVE GROWTH POVERTY CHANGES POVERTY DECLINES POVERTY DYNAMICS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT INDEX POVERTY IMPACT POVERTY IMPACT OF GROWTH POVERTY INCIDENCE POVERTY MEASURE POVERTY MEASURES POVERTY PROFILE POVERTY RATE POVERTY RATES POVERTY REDUCING POVERTY REDUCTION POVERTY-REDUCING GROWTH POVERTY-REDUCING IMPACT PRICE STABILIZATION PRIVATE CONSUMPTION PRO-POOR PRO-POOR GROWTH PROGRESS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC POLICY PUBLIC SERVICES PUBLIC SPENDING PURCHASING POWER PURCHASING POWER PARITY RAINFOREST RATE OF GROWTH RECREATION REDUCING POVERTY REDUCTION IN POVERTY REGIONAL DIFFERENCES RESPECT RESPONSES TO GROWTH RURAL RURAL AREAS SANITATION SCHOOLING SECTORAL COMPOSITION SIGNIFICANT EFFECT SIGNIFICANT IMPACT SOCIAL ASSISTANCE SOCIAL EXPENDITURES SOCIAL POLICY SOCIAL PROGRAMS SOCIAL PROTECTION SOCIAL SECURITY SOCIAL SERVICES SOCIAL SPENDING SOCIAL WELFARE STATE-OWNED ENTERPRISES TRADE LIBERALIZATION UNIONS URBANIZATION WELFARE INDICATOR
Online Access:	http://documents.worldbank.org/curated/en/2007/12/8838410/poverty-reduction-without-economic-growth-explaining-brazils-poverty-dynamics-1985-2004 http://hdl.handle.net/10986/7621

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Summary:	Brazil's slow pace of poverty reduction over the last two decades reflects both low growth and a low growth elasticity of poverty reduction. Using GDP data disaggregated by state and sector for a twenty-year period, this paper finds considerable variation in the poverty-reducing effectiveness of growth-across sectors, across space, and over time. Growth in the services sector was substantially more poverty-reducing than was growth in either agriculture or industry. Growth in industry had very different effects on poverty across different states and its impact varied with initial conditions related to human development and worker empowerment. The determinants of poverty reduction changed around 1994: positive growth rates and a greater (absolute) elasticity with respect to agricultural growth contributed to faster poverty reduction. But because there was so little of it, economic growth played a relatively small role in accounting for Brazil's poverty reduction between 1985 and 2004. The taming of hyperinflation (in 1994) and substantial expansions in social security and social assistance transfers, beginning in 1988, accounted for a larger share of the overall reduction in poverty.

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