financial development income inequality and the redistributive effects of monetary policy abstract how should financial systems be designed to limit income inequality does the redistributive impact of inflation depend on the extent of financial development should optimal monetary policy vary across countries with different levels of financial development in order to address these questions we develop a monetary growth production model with heterogeneous agents in our economy optimal policy needs to weigh the effects of policy across two groups capital owners and individuals who hold liquid assets in this environment we compare various economies that are identical in every aspect except for their level of financial development interestingly we generally find that economies at the highest stages of financial development economies in which money bonds and claims to capital are traded experience the highest amount of capital formation and social welfare as long as inflation is low yet regardless of the extent of financial development there are generally redistributive consequences from inflation moreover the model tends to predict that economies with relatively small stock markets produce the highest levels of income inequality empirical work examining the role of money growth and the implications of financial development across countries is consistent with predictions from the model

is economic growth good for the poor tracking low incomes using general means in this paper we propose the use of an alternative methodology to track low incomes based on atkinson s 1970 family of equally distributed equivalent income functions which are called general means here we provide a new characterization of general means that justifies their use in this context our method of evaluating the effects of growth on poor incomes is based on a comparison of growth rates for two standards of living the ordinary mean and a bottom sensitive general mean the motivating question is to what extent is growth in the ordinary mean accompanied by growth in the general mean a key indicator in this approach is the growth elasticity of the general mean or the percentage change in the general mean over the percentage change in the usual mean our empirical analysis estimates this growth elasticity for a data set containing 144 household surveys from 20 countries over the last quarter century among other results we find that the growth elasticity of bottom sensitive general means is positive but significantly smaller than one this suggests that the incomes of the poor do not grow one for one with increases in average income

price indexes inequality and the measurement of world poverty i discuss the measurement of world poverty and inequality with particular attention to the role of purchasing power parity ppp price indexes from the international comparison project global inequality increased with the latest revision of the icp and this reduced the global poverty line relative to the us dollar the recent large increase of nearly half a billion poor people came from an inappropriate updating of the global poverty line not from the icp revisions even so ppp comparisons between widely different countries rest on weak theoretical and empirical foundations i argue for wider use of self reports from international monitoring surveys and for a global poverty line that is truly denominated in us dollars

inequality and the impact of growth on poverty comparative evidence for sub saharan africa abstract this study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub saharan africa ssa compared to non ssa based on an unbalanced panel of 86 countries over 1977 2004 for all three measures of poverty headcount gap and squared gap the impact of gdp growth on poverty reduction is a decreasing function of initial inequality the impacts are similar in direction for ssa and non ssa so that within both regions there are considerable disparities in the responsiveness of poverty to income growth depending on inequality nevertheless the income growth elasticity is substantially less for ssa implying relatively small poverty reduction response to growth

can fao s measure of chronic undernourishment be strengthened abstract in its sixth world food survey released at the 1996 world food summit the food and agriculture organization of the united nations fao reported that 841 million people in developing countries are chronically undernourished this number and its country and regional level disaggregations have proved tremendously useful to countless development aid agencies and researchers in the context of a recent wave of new nationally representative household food consumption and expenditure surveys this paper examines the estimation methodology underlying the food insecurity measure which relies on national aggregate measures of food availability and distribution the paper finds that the measure largely reflects national food availabilities and does not adequately capture people s ability to gain access to food the ultimate key to food security the implications for the indicator s use by policy makers in geographical targeting and tracking changes in food insecurity over time are drawn out the paper concludes by arguing that the time has come to review the potential for employing the new household survey data along with new methods to strengthen the empirical foundations of fao s measure

growth and poverty reduction in ethiopia evidence from household panel surveys abstract the paper investigates the impact of growth on poverty in ethiopia by analysing panel data covering 1994 97 a period of economic recovery driven by peace good weather and much improved macroeconomic management the analysis of poverty shows land ownership education type of crops planted occupations in urban areas dependency ratios and location to be important determinants the characteristics of households that fell into or escaped from poverty are examined in addition the profile of those that remained poor during the period the chronic poor is looked at in rural areas the cultivation of a nontraditional export crop chat has significantly improved the welfare of households primary education plays a more important role in improving welfare in urban than in rural areas decomposition of changes in poverty into growth and redistribution components indicates that potential poverty reduction due to the increase in real per capita income was to some extent counteracted by worsening income distribution the implications of the results for a propoor policy are discussed

poverty among ethnic minorities the transition process inequality and economic growth abstractthis article investigates the process of reducing poverty in ethnic minority households using two recent vietnam household surveys we find that ethnic minority households are more likely to be persistently poor and less likely to be persistently non poor than ethnic majority households the within group component generated by the variation in income within each ethnicity group explains more than 90 of the change in total inequality income redistribution plays an important role in decreasing the poverty gap and decreasing poverty severity different ethnic groups have different poverty patterns which should be noted when designing policies to alleviate poverty and inequality

can high inequality developing countries escape absolute poverty do the poor face the same prospects for escaping poverty in high inequality developing countries as in low inequality countries is it possible for inequality to be so great as to stifle prospects of reducing absolute poverty even when other initial conditions and policies are favorable to growth household survey data for developing countries suggest that initial distribution does affect how much the poor share in rising average incomes higher initial inequality tends to reduce growth s impact on absolute poverty by the same token higher inequality diminishes the adverse impact on the poor of general economic contraction combining this evidence with that from recent investigations of inequality s effect on growth the author finds that if inequality is high enough countries that would have very good growth prospects at low levels of inequality may see little or no overall growth and little progress in reducing poverty or even a worsening on both counts the data the author uses suggest that such cases do occur the precision with which key parameters have been estimated makes it difficult to say with confidence how common such cases are but they appear to be in the minority what appear to be the best available estimates suggest that about one fifth of the spells between surveys he analyzed were cases in which poverty was rising yet positive growth in the mean and hence falling poverty is predicted at zero inequality inequality can be high enough to result in rising poverty despite good underlying growth prospects

the geography and causes of food insecurity in developing countries abstract at the 1996 world food summit 186 countries made a commitment to reduce the number of chronically undernourished people by half by 2015 in order to formulate effective policies for reaching this goal a thorough understanding of the location and causes of food insecurity is needed this paper provides a broad overview of the current character of food insecurity in developing countries focusing on two questions 1 why are they food insecure and 2 why are the food insecure to answer the latter question data from 58 developing countries with high prevalences of food insecurity are employed to examine the relative importance of two of food insecurity s most basic causes national food availability and the inability of people to access food due to poverty using child malnutrition as a proxy along with descriptive controls for non food determinants of malnutrition the paper finds little correlation between national food availabilities and food insecurity the group of countries that exhibit the highest severity of food insecurity are those with high poverty and food dietary energy surpluses consistent with the view that poverty is the most widespread cause of food insecurity in the 1990s the paper concludes by considering the implications of the analysis for appropriate geographical and policy targeting to improve food security for the greatest numbers of people at the fastest pace now and into the 21st century

revisiting the effects of imf programs on poverty and inequality investigating how lending programs of the international monetary fund imf affect poverty and inequality we explicitly address model uncertainty we control for endogenous selection into imf programs using data on 86 low and middle income countries for the 1982 2009 period and analyze program effects on various poverty and inequality measures the results rely on averaging over 90 specifications of treatment effect models and indicate adverse short run effects of imf agreements on poverty and inequality for the whole sample while for a 2000 2009 subsample the results are reversed there is evidence that significant short run effects might disappear in the long run author s abstract

how important is improving food availability for reducing child malnutrition in developing countries abstract do increases in the food supply per person in a country i e national food availability contribute substantially to reductions in malnutrition among its children this paper sets out to answer this controversial question using panel data from 63 developing countries over 1970 1996 this paper gives evidence in support of a statistically significant and strong positive impact of national food availability on child nutrition finding that increased food supplies have resulted in significant reductions in malnutrition since the 1970s despite population increases over the period however per capita food supplies have a declining marginal impact their effect is quite strong for countries with very low food availability e g most countries in sub saharan africa and south asia but weak or non existent for those with high levels e g most countries in the near east and north africa further non food factors such as women s education and status and the quality of health environments are also important determinants of children s nutritional status depending on the state of food availability in any particular geographic area and relative costs these factors may merit greater priority in policies to reduce malnutrition

measuring aggregate welfare in developing countries how well do national accounts and surveys agree in a data set for developing and transition economies the author finds that private consumption per capita based on national accounts deviates on average from mean household income or expenditure based on national sample surveys growth rates also differ systematically so that the ratio of the survey mean to the national accounts mean tends to fall over time but there are revealing exceptions to these general findings the aggregate difference in the levels is due more to income surveys than to expenditure surveys and there are strong regional effects for example the severe data problems in the transition economies of eastern europe and central asia means that there is negligible correlation in that region between growth rates from national accounts and those from household surveys

weakly relative poverty prevailing measures of relative poverty are unchanged when all incomes grow or contract by the same proportion this property stems from seemingly implausible assumptions about the disutility of relative deprivation and the cost of social inclusion the authors propose weakly relative lines that relax these assumptions on calibrating our measures to national poverty lines and survey data we find that half the population of the developing world in 2005 lived in poverty only half of whom were absolutely poor the total number of poor rose over 1981 to 2005 despite falling numbers of absolutely poor with sustained economic growth the incidence of relative poverty became less responsive to further growth the number of relatively poor rose just as the numbers of absolutely poor fell

trends in poverty and destitution in wollo ethiopia 1 abstract according to several studies poverty in rural ethiopia has fallen significantly since the early 1990s thanks to improved governance and economic liberalisation policies this paper presents several arguments that challenge this view the first questions the methodological foundations of the data from which these positive trends are derived we argue that the original sampling frame was too small and unrepresentative to provide a basis for extrapolating national poverty levels or trends the second argument questions the conceptual underpinnings of these studies poverty estimates based on levels of current consumption fail to allow for non income dimensions of wellbeing nor for confounding factors such as seasonality annual rainfall and food aid receipts the third strand considers alternative sources of data on changes in wellbeing in ethiopia recent qualitative studies report that the poor perceive themselves as poorer and more vulnerable than poverty headcount figures suggest finally we

economic growth inequality and poverty estimating the growth elasticity of poverty summary this paper uses a new data set of 126 intervals from 60 developing countries to analyze the growth elasticity of poverty that is how much does poverty decline in percentage terms with a given percentage rise in economic growth the data set is both broader in coverage and more selective in terms of quality controls than those used in the past the study finds that while economic growth does reduce poverty in developing countries the rate of poverty reduction depends very much on how economic growth is defined controlling for changes in income inequality when economic growth is measured by changes in survey mean income consumption the growth elasticity of poverty excluding eastern europe and central asia is 2 79 that is a 10 increase in the survey mean will reduce poverty 1 00 person day by 27 9 but when growth is measured by changes in gdp per capita the growth elasticity of poverty is a statistically insignificant 2 27 which is lower than has previously been estimated

growth and poverty revisited from a multidimensional perspective the actual impact of economic growth on poverty reduction is of fundamental importance to the development agenda this paper offers new empirical evidence on growth and poverty measured from a mult

can the paris deal boost sdgs achievement an assessment of climate mitigation co benefits or side effects on poverty and inequality abstract the paper investigates potential synergies and trade offs between emission reduction policies and sustainable development objectives specifically it provides an ex ante assessment that the impacts of the nationally determined contributions ndcs submitted under the paris agreement will have on the sustainable development goals sdgs of poverty eradication sdg1 and reduced income inequality sdg10 through this research we aim at answering the following questions does mitigation policy always imply a trade off with development objectives if this is the case what is the magnitude of the effect of the new international climate architecture on poverty and inequality by combining an empirical analysis with a modelling exercise the paper estimates the future trends of poverty prevalence and inequality across countries in a reference scenario and under a climate mitigation policy with alternative revenue recycling schemes our study finds that a full implementation of the emission reduction contributions stated in the ndcs is projected to slow down the effort to reduce poverty by 2030 4 2 of the population below the poverty line compared to the baseline scenario especially in countries that have proposed relatively more stringent mitigation targets and suffer higher policy costs conversely the impact of climate policy on inequality shows opposite sign but remains very limited if financial support for mitigation action in developing countries is provided through an international climate fund the prevalence of poverty will be slightly reduced at the aggregate level but the country specific effect depends on the relative size of funds flowing to beneficiary countries and on their economic structure the output of our analysis contributes to the emerging literature on the linkages between climate change policy and sustainable development although we capture only partially the complex system of interrelations and feedbacks proper of the sdgs moreover due to its policy relevance it further enriches the debate on the implementation of the paris agreement and its climate finance tools

constructive consumer choice processes consumer decision making has been a focal interest in consumer research and consideration of current marketplace trends e g technological change an information explosion indicates that this topic will continue to be critically important we argue that consumer choice is inherently constructive due to limited processing capacity consumers often do not have well defined existing preferences but construct them using a variety of strategies contingent on task demands after describing constructive choice consumer decision tasks and decision strategies we provide an integrative framework for understanding constructive choice review evidence for constructive consumer choice in light of that framework and identify knowledge gaps that suggest opportunities for additional research

growth and poverty evidence for developing countries in the 1980s abstract measures of consumption poverty for a sample of developing countries in the 1980s respond elastically to changes in mean consumption although there is a high variance in poverty outcomes at a given rate of growth there is no sign of systematic effects of growth on inequality

are women overrepresented among the poor an analysis of poverty in 10 developing countries abstract this paper presents new evidence on the proportion of women in poverty in 10 developing countries it compares poverty measures for males and females and for male and female headed households and investigates the sensitivity of these measures to the use of per capita and per adult equivalent units and different definitions of the poverty line while poverty measures are higher for female headed households and for females the differences are significant in only a fifth to a third of the datasets the contribution of female headed households to aggregate poverty is less than that of females due to the low population share of the former stochastic dominance analysis reveals that differences between male and female headed households and between males and females are often insignificant except for ghana and bangladesh where females are consistently worse off these results suggest that cultural and institutional factors may be responsible for higher poverty among women in these countries our results point to the need to analyze determinants of household income and consumption using multivariate methods and to give greater attention to the processes underlying female headship

evaluating china s poverty alleviation program a regression discontinuity approach abstract this paper evaluates the impact of the 8 7 plan the second wave of china s poverty alleviation program on rural income growth at the county level over the program s disbursement period from 1994 to 2000 program participation was largely determined by whether a county s pre program income fell below a given poverty line hence a regression discontinuity approach is employed to estimate the causal effects of the program using a panel data set we find that the 8 7 plan resulted in an approximately 38 percent increase in rural income for counties that were treated between 1994 and 2000 our empirical results also suggest the important role of initial endowments in the path toward economic development

the quest for pro poor and inclusive growth the role of governance this paper analyses the role of good governance in fostering pro poor and inclusive growth using a sample of 112 countries over 1975 2012 it shows that growth is generally pro poor however growth has not been inclusive as illustrated by a decline in the bottom 20 percent of the income distribution while all features of good governance support income growth and reduce poverty only government effectiveness and the rule of law are found to enhance inclusive growth the investigation of the determinants of pro poor and inclusive growth highlights that education infrastructure improvement and financial development are the key factors in poverty reduction and inclusive growth relying on the panel smooth transition regression pstr model following gonzalez tersvirta and dijk 2005 the paper identifies a nonlinear relationship between governance and pro poor growth while the impact of governance on inclusive growth appears to be linear

development and income distribution the case of puerto rico abstract using data spanning half a century the study addresses the trends and factors behind changes in income distribution in one of the earliest examples of development through integration to the world economy results show remarkable income growth that generated an ambiguous long term change in inequality but a drastic reduction in poverty public transfers played a decisive role in restraining growth in inequality and in reducing poverty levels that were also affected favorably by changes in the distribution of female earned income finally although rising schooling levels and their absolute returns increased households income generating capacities the realization of the potential was hindered by increasing levels of unemployment and economic inactivity

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

when is growth pro poor evidence from a panel of countries abstract growth is pro poor if the poverty measure of interest falls according to this definition there are three potential sources of pro poor growth a a high growth rate of average incomes b a high sensitivity of poverty to growth in average incomes and c a poverty reducing pattern of growth in relative incomes i empirically decompose changes in poverty in a sample of developing countries during the 1980s and 1990s into these three components in the medium to long run most of the variation in changes in poverty can be attributed to growth in average incomes suggesting that policies and institutions that promote broad based growth should be central to the pro poor growth agenda most of the remainder of the variation in changes in poverty is due to poverty reducing patterns of growth in relative incomes rather than differences in the sensitivity of poverty to growth in average incomes cross country evidence provides relatively little guidance as to the policies and institutions that promote these other sources of pro poor growth

equity in health care finance in palestine the triple effects revealed this paper presents an application of the urban and lambert upgraded ajl decomposition approach that was designed to deal with the problem of close income equals in equity analysis and as applied to the area of health care finance contrary to most previous studies vertical and horizontal inequities and the triple effects of inter groups intra group and entire group reranking of various financing schemes are estimated with statistical significance calculated using the bootstrap method application is made on the three financing schemes present in the case of the occupied palestinian territory results demonstrate the relative importance of the three forms of reranking in determining overall inequality the paper offers policy recommendations to limit the existing inequalities in the system and to enhance the capacity of the governmental insurance scheme

can the world cut poverty in half how policy reform and effective aid can meet international development goals abstract poverty in the developing world will decline by about one half by 2015 if the trends of the 1990s persist most of this poverty reduction will occur in asia however while poverty will decline only slightly in africa effective aid could make a contribution to greater poverty reduction in lagging regions even more potent would be significant policy reform in these countries we develop a model of efficient aid in which flows respond to policy improvements that create a better environment for poverty reduction and effective aid we investigate scenarios of policy reform and efficient aid that point the way to how the world can cut poverty in half in every major region

do international migration and remittances reduce poverty in developing countries summary few studies have examined the impact of international migration and remittances on poverty in the developing world this paper fills this lacuna by constructing and analyzing a new data set on international migration remittances inequality and poverty from 71 developing countries the results show that both international migration and remittances significantly reduce the level depth and severity of poverty in the developing world after instrumenting for the possible endogeneity of international migration and controlling for various factors results suggest that on average a 10 increase in the share of international migrants in a country s population will lead to a 2 1 decline in the share of people living on less than 1 00 per person per day after instrumenting for the possible endogeneity of international remittances a similar 10 increase in per capita official international remittances will lead to a 3 5 decline in the share of people living in poverty

income polarization in european countries and europe wide 2004 2012 polarization is an interesting additional social indicator for analyzing income distribution across countries as it captures the phenomenon of clustering around extreme poles income polarization can be closely linked to social exclusion which is relevant for eu social policy because combatting social exclusion is a central element of the lisbon agenda and the europe 2020 strategy rising income polarization has been observed outside europe but within the eu polarization is relatively unexplored this paper provides theoretical insights into this relatively new dimension of income distribution and analyzes trends in income polarization in 28 eu countries and 3 non eu countries using micro data from eu silc over the period 2004 2012 income polarization is rather stable over this period in european countries and europe wide it was rising among the old eu15 countries in the sub period 2004 2008 but declining afterwards the opposite development is witnessed for new member states despite the great recession we find quite stable income polarization in europe

when does economic growth reduce poverty and strengthen the middle class a state level sector specific analysis of peru using novel state level data of peru from 1997 to 2010 we investigate how growth in different sectors affects poverty rates and the middle class our results indicate that only the manufacturing sector seems to robustly decrease poverty growth in the service sector emerges as a meaningful predictor of a rising middle class allowing for regional differences we find substantial variation across the 25 peruvian states with large shifts in magnitudes signs and statistical importance beyond the immediate implications for peru these findings highlight the importance of analyzing the link between economic performance and poverty rates on a subnational level policy implications are likely to differ substantially depending on the source of economic growth and regional particularities

growth inequality and poverty looking beyond averages the evidence is compelling that the poor in developing countries do typically share in the gains from rising aggregate affluence and in the losses from aggregate contraction but how much do poor people share in growth do they gain more in some settings than others do some gain while others lose does pro poor growth mean more or less aggregate growth recent theories and evidence suggest some answers but deeper microeconomic empirical work is needed on growth and distributed change only then will we have a firm basis for identifying the specific policies and programs needed to complement and possibly modify growth oriented policies

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 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

growth elasticity of poverty direct estimates from recent data using recent poverty data for developing countries elasticity of 2 poverty headcount with respect to the growth of gross domestic product gdp per capita is directly calculated for the 1990s and the 2000s the global estimate is around 0 84 which is much smaller in absolute magnitude than what some highly influential studies have reported or used for the poverty dense south asia region the elasticity is of the order of 0 22 which is a dramatic contrast from the previous estimates for india where the number of poor people is by far the largest of any country and where the poverty rate is higher than even in sub saharan africa ssa the elasticity is of the order of 0 13 which is an even bigger contrast from earlier studies policymakers and researchers are urged to keep these estimates in mind while judging the likely effect of income growth on poverty and to discount poverty reduction claims based on higher elasticity estimates that have been reported or used in many influential studies i

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

global poverty estimates a sensitivity analysis summary current estimates of global poverty vary substantially across studies we undertake a sensitivity analysis to highlight the importance of methodological choices by measuring global poverty using different data sources parametric and nonparametric estimation methods and multiple poverty lines our results indicate that estimates of global poverty vary significantly when they are based alternately on data from household surveys versus national accounts but are relatively consistent across estimation methods the decline in poverty over the past decade is found to be robust across methodological choices

poverty inequality and growth in selected middle east and north africa countries 1980 2000 abstract this paper uses crosscountry data and country case studies to analyze trends in poverty inequality and economic growth in the middle east and north africa mena region compared to other regions the mena region has a low incidence of poverty and income inequality two factors account for this situation international migration remittances and public sector government employment since the early 1980s international migration to the persian gulf and europe has helped boost the incomes of the poor in the middle east at the same time many mena countries have used government employment as a means of keeping people employed and out of poverty regression analysis of crosscountry data shows that both of these factors have a statistically significant impact on reducing the level and depth of poverty in the mena region

the end of economic growth a contracting threshold hypothesis this paper argues that gdp growth in both developed and developing countries has associated costs that can outweigh the benefits and thus reduce sustainable well being this conclusion is based upon the findings of empirical applications of the genuine progress indicator gpi to a range of countries in the asia pacific region the studies conducted on seven asia pacific countries indicate that in the case of five of the seven nations more recent gdp growth has reduced the sustainable well being experienced by the average citizen residing within them moreover the threshold point at which the costs of gdp growth outweigh the benefits appears to be contracting i e occurring at a much lower per capita level of gdp this paper therefore introduces a new contracting threshold hypothesis as the economies of the asia pacific region and the world collectively expand in a globalised economic environment there is a contraction over time in the threshold level of per capita gdp as a consequence the threshold point confronting growth late comers i e developing countries occurs at a much lower level of sustainable welfare than what wealthy nations currently enjoy the consequences of this for developing countries are clearly significant and require a new approach to economic development

macroeconomic performance and poverty in brazil abstract drawing on brazilian time series data this study finds an inelastic link between poverty and wages over the macroeconomic cycle that is devoid of the asymmetric effects that characterise the phenomenon s response to changes in the rate of unemployment deepening of structural reforms in the second half of the 1990s had no effect on the aforementioned relationships which also varied little by regional level of development finally the connection between poverty and long term income changes was more elastic suggesting an association between the economy s recent disappointing performance in alleviating poverty and its lacklustre growth record over the past two decades

pro poor economic growth inequality and fiscal policy the case of spanish regions ayala l and jurado a pro poor economic growth inequality and fiscal policy the case of spanish regions regional studies this paper aims to discuss whether substantive differences exist in terms of the distribution of economic growth by income groups in spanish regions in order to do so data from the spanish family budget surveys for various years are used to estimate growth incidence curves decomposition models of poverty changes and isopoverty curves the results show that while economic growth in the long term has meant an improvement of the lower income percentiles in spain this improvement is not uniform in the different regions limited possibilities for poverty reduction in the lower income regions are also found ayala l et jurado a pour la croissance economique faible l inegalite et la politique fiscale l etude de cas des regions d espagne regional studies cet article cherche a discuter si oui ou non il existe d importants ecarts de la distribution de la croissance economique pa

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

good and bad growth the human development reports abstract the 1996 human development report undp 1996 is about economic growth and human development in keeping with past reports in the series it emphasizes the diversity of country performance in improving human development indicators at given rates of growth this article reviews what the human development reports have said on this topic looking at how well the main messages have been supported by data and analysis and how compelling they are as a basis for public action

the world distribution of income falling poverty and convergence period we estimate the world distribution of income by integrating individual income distributions for 138 countries between 1970 and 2000 country distributions are constructed by combining national accounts gdp per capita to anchor the mean with survey data to pin down the dispersion poverty rates and head counts are reported for four specific poverty lines rates in 2000 were between one third and one half of what they were in 1970 for all four lines there were between 250 and 500 million fewer poor in 2000 than in 1970 we estimate eight indexes of income inequality implied by our world distribution of income all of them show reductions in global inequality during the 1980s and 1990s

identifying unmet demand brand preferences and marketplace demand are a reflection of the importance of underlying needs of consumers and the efficacy of product attributes for delivering value dog owners for example may look to dog foods to provide specific benefits for their pets e g shiny coats that may not be available from current offerings an analysis of consumer wants for these consumers would reveal weak demand for product attributes resulting from low efficacy despite the presence of strong latent interest the challenge in identifying such unmet demand is in distinguishing it from other reasons for weak preference such as general noninterest in the category and heterogeneous tastes we propose a model for separating out these effects within the context of conjoint analysis and we demonstrate its value with data from a national survey of toothpaste preferences implications for product development and reformulation are explored

is democracy good for the poor many scholars claim that democracy improves the welfare of the poor this article uses data on infant and child mortality to challenge this claim cross national studies tend to exclude from their samples nondemocratic states that have performed well this leads to the mistaken inference that nondemocracies have worse records than democracies once these and other flaws are corrected democracy has little or no effect on infant and child mortality rates democracies spend more money on education and health than nondemocracies but these benefits seem to accrue to middle and upper income groups

the impact of changes in human fertility on poverty household survey data for developing and transitional economies are used to estimate the effect of fertility crude birth rate net of infant deaths on private consumption poverty cross national regressions indicate that higher fertility increases poverty both by retarding economic growth and by skewing distribution against the poor our median country in 1980 had dollar a day poverty incidence of 18 9 per cent had it reduced its fertility by four per 1 000 throughout the 1980s the sample median fall it is estimated that incidence would have been reduced to 13 9 per cent the growth and distribution effects being roughly equally responsible for this reduction

distribution and development in a model of misgovernance abstract this paper presents an analysis of bureaucratic corruption income inequality and economic development the analysis is based on a dynamic general equilibrium model in which bureaucrats are appointed by the government to implement a redistributive programme of taxes and subsidies designed to benefit the poor corruption is reflected in bribery and tax evasion as bureaucrats conspire with the rich in providing false information to the government in accordance with empirical evidence the model predicts a positive relationship between corruption and inequality and a negative relationship between corruption and development

what difference do polarisation measures make an application to china in recent years there has been much discussion of the difference between inequality and polarisation the vast literature on inequality is held to miss out key features of distributional change which are better described as changes in polarisation axioms have been proposed which capture some of these differences and measures of polarisation as distinct from inequality have been suggested the theoretical distinctions proposed in this literature are indeed interesting but do the newly proposed measures of polarisation give different results in comparing societies over time we address these questions for china where dramatic increases in inequality and polarisation have been much discussed in the literature we find that contrary to theoretical expectation the new measures of polarisation do not generate very different results from the standard measures of inequality the paper ends by considering a different approach to polarisation which might better conform to the policy concerns expressed in t

growth and inequality are the 1990s different abstract the paper examines the empirical relationship between growth inequality it concludes that while pre 1990 the growth process was not accompanied by increases in inequality after 1990 a positive and significant correlation appears this finding survives a number of robustness checks

inflation and the poor using polling data for 31 869 households in 38 countries and allowing for country effects the authors show that the poor are more likely than the rich to mention inflation as a top national concern this result survives several robustness checks also direct measures of improvements in well being for the poor the change in their share of national income the percentage decline in poverty and the percentage change in the real minimum wage are negatively correlated with inflation in pooled cross country samples high inflation tends to lower the share of the bottom quintile and the real minimum wage and tends to increase poverty

dollar a day revisited the article presents the first major update of the international 1 a day poverty line proposed in world development report 1990 poverty for measuring absolute poverty by the standards of the world s poorest countries in a new and more representative data set of national poverty lines a marked economic gradient emerges only when consumption per person is above about 2 00 a day at 2005 purchasing power parity below this the average poverty line is 1 25 which is proposed as the new international poverty line the article tests the robustness of this line to alternative estimation methods and explains how it differs from the old 1 a day line

what can new survey data tell us about recent changes in distribution and poverty it has been claimed that in recent times the poor have lost ground both relatively and absolutely even when average levels of living have risen this article tests that claim using household surveys for 67 developing and transitional economies over 1981 94 it finds that changes in inequality and polarization were uncorrelated with changes in average living standards distribution improved as often as it worsened in growing economies and negative growth was often more detrimental to distribution than positive growth overall there was a small decrease in absolute poverty although with diverse experiences across regions and countries almost always poverty fell with growth in average living standards and rose with contraction

smallholder livelihood adaptation in the context of neoliberal policy reforms a case of maize farmers in southern veracruz mexico governments around the world have embraced trade liberalisation as a means of enhancing efficiency to realise economic growth and alleviate poverty likewise the mexican government implemented neoliberal policy reforms the nafta in particular to stimulate sustainable development using the mexican maize sector as illustration this article describes the adaptation process of smallholders to market changes shaped by these reforms going beyond the aggregated level we have investigated smallholders livelihood strategies contrary to what economic models estimated our data suggests that farmers intensified the cultivation of maize rather than switch to sectors in which mexico has a comparative advantage

channels and policy debate in the globalization inequality poverty nexus the process of globalization has led to a much greater integration of the world economy the flows of trade capital labour technology and information across national borders have accelerated since the 1980s and created an environment conducive to faster economic growth and transmission of knowledge it is evident that the forces of globalization provide a strong potential for a major reduction in poverty in the developing world however for a number of reasons brought out in this chapter the positive impact of globalization on poverty alleviation worldwide has not been as substantial as one might have expected in this chapter we explore structural factors and policies within the world economy and national economies that impede the full transmission of the benefits of the various channels of globalization to poverty reduction

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

inequality and growth in the united states is there asymmetric response at the state level a previous study that tried to assess the impact of economic growth on income inequality in the u s used state level data and an ardl panel model to conclude that economic growth worsens income in

aid allocation and poverty reduction the authors derive a poverty efficient allocation of aid and compare it with actual aid allocations they build the poverty efficient allocation in two stages first they use new world bank ratings of 20 different aspects of national policy to establish the current relationship between aid policies and growth onto that they add a mapping from growth to poverty reduction which reflects the level and distribution of income they compare the effects of using headcount and poverty gap measures of poverty they find the actual allocation of aid to be radically different from the poverty efficient allocation in the efficient allocation for a given of poverty aid tapers in with policy reform in the actual allocation aid tapers out with reform in the efficient allocation aid is targeted disproportionately to countries with severe poverty and adequate polices the type of country where 74 percent of the world s poor live in the actual allocation such countries receive a much smaller share of aid 56 percent than their share of the world s poor with the present allocation aid is effective in sustainably lifting about 30 million people a year out of absolute poverty with a poverty efficient allocation this would increase to about 80 million people even with political constraints introduced to keep allocations for india and china constant poverty reduction would increase to about 60 million reallocating aid is politically difficult but it may be considerably less difficult than quadrupling aid budgets which is what the authors estimate would be necessary to achieve the same impact on poverty reduction with existing aid allocations

the simultaneous evolution of growth and inequality research on inequality and growth can be divided into two strands one deriving from kuznets and lewis has tried to identify a mechanistic relationship between growth or level of income and inequality the other has tried to find causal explanations of growth and inequality treating each independently in this paper we draw from both strands to test whether growth and inequality are the joint outcomes of other variables and processes we find that simultaneous examination of growth and inequality yields significantly different results and has different consequences for policy from previous independent studies the empirical literature on growth and inequality can be divided into two broad strands one following the pioneering work of kuznets and lewis is motivated by the pessimistic conjecture that the process of growth and development somehow requires increasing inequality at least in the early stages this has led to many efforts to identify a mechanical relationship between the level of development and inequality anand and kanbur 1993 or to determine whether faster growth requires higher or lower inequality the second strand has sought to identify the causal factors influencing the evolution of growth and inequality independently this research has looked either at growth for example barro and sala i martin 1995 or at inequality li et al 1997 but has not tried to identify those factors that might simultaneously influence both growth and inequality 2 thus the literature that looks simultaneously at growth and inequality descending most notably from kuznets 1955 relates them in a mechanistic manner that ignores or minimises the role of other causal factors including policy while the literature that incorporates other causal factors including policies looks independently at growth and inequality neither approach is particularly convincing from a theoretical standpoint the evolution of growth and inequality must surely be the outcome of similar processes in addition neither approach is particularly useful for the policy maker who needs to balance the impact of policies on both growth and distribution in this paper we investigate whether growth and inequality are simultaneously determined and if so whether or not they are subject to

distributional effects of growth and public expenditures in africa estimates for tanzania and rwanda summary in this paper we explore the effects of fiscal policies and growth on measures of household welfare across the distribution of expenditures for two african countries rwanda and tanzania we explore the effect of government expenditures on expenditure growth in each quintile of the expenditure distribution and the effect of growth for each group we find that the benefits of growth are concentrated among the better off sectors of the population in these two countries perhaps to the detriment of the poorer sectors by looking at the effects within a country and across different groups of households and administrative entities we exploit variation in expenditures and growth across and within regions of each country to estimate the elasticities of expenditure with respect to fiscal expenditure and mean expenditure growth at different points of the expenditure distribution using household survey data and government expenditure data at the district level we find that overall mean expenditure growth benefits the top expenditure groups the welfare spillovers are mostly present for top 20 of the expenditure distribution with the middle of the distribution in tanzania responding slightly to these spillovers public social expenditures do not appear to affect inequality considerably but do tend to work toward decreasing inequality however mean expenditure growth is related to increases in inequality in the sense that the richest sectors of the population benefit the most from growth we find that the growth elasticity of expenditure is only above one for the top quintile in both countries in tanzania a 1 increase in average household expenditure is related to a 1 96 expenditure growth in the top quintile and 0 43 in the third quintile in rwanda a 1 increase in average household expenditure is related to a 1 93 increase in household expenditure in the top 20 of the distribution

aid and growth in small island developing states aid flows to small island developing states sids are enormous by international standards when compared to the size of their economies yet these countries face many severe economic challenges and many have experienced declines in the living standards of their citizens this paper looks at the impact of aid on what is treated as a necessary precondition for improvements in living standards typically defined specifically it examines the impact of foreign aid on real per capita income growth in sids by econometrically analysing cross country data for the period 1980 to 2004 a variety of econometric techniques and measures of aid are used results suggest that foreign aid is effective at spurring economic growth but with diminishing returns

effect of remittances on poverty and financial development in sub saharan africa summary this paper assesses the effect of the steadily growing remittance flows to sub saharan africa though the region receives only a small portion of the total recorded remittances to developing countries and the volume of aid flows to sub saharan africa swamps remittances this paper finds that remittances which are a stable private transfer have a direct poverty mitigating effect and promote financial development these findings hold even after factoring in the reverse causality between remittances poverty and financial development the paper posits that formalizing such flows can serve as an effective access point for unbanked individuals and households

what do we know about global income inequality in this paper we review the recent literature on global interpersonal income inequality while all estimates agree that the level is very high with a gini of between 0 630 and 0 686 in the 1990s there is no consensus regarding the direction of change we discuss methodological issues including the use of national accounts versus survey based estimates of mean income or consumption and the choice of purchasing power parity exchange rates findings of a rise or fall in global income inequality are not robust across different estimation methods and datasets given the diversity of estimates and various sources of uncertainty including gaps and errors in the underlying data we conclude there is insufficient evidence to determine the direction of change in global interpersonal inequality in recent decades

are third world emigration forces abating most observers appear to believe that third world emigration pressure is on the rise but history suggests that migration typically follows a bell shape in which case it might be entering on the downward phase this paper estimates the economic and demographic fundamentals driving emigration from the developing world to the united states since 1970 the results suggest that emigration pressure determined largely by source country demographics education poverty and migrant stock dynamics has recently been abating projections into the future suggest that it may even decline and that its composition will become much more african and much less hispanic