In its eagerly awaited annual World Development Report, the bank said the war on poverty needed a broader approach than previously thought. The WDR has been the subject of intense interest from development charities and governments since its first author, the academic economist Ravi Kanbur, resigned in June following changes made to the report to place a stronger emphasis on growth.
Inequality is back on the agenda.
The report said that while economic growth was crucial for poverty alleviation, it needed to be buttressed by strong social institutions and government intervention to help those people in developing countries who might be adversely affected by economic liberalisation and freer trade. To increase the share of poor people in the benefits of growth, we must also address inequality. Ms Lustig said that growth and redistribution were mutually reinforcing. The report was welcomed by many development charities, which said it marked a return to the more wide-ranging conclusions of Mr Kanbur's earliest draft rather than the narrower focus on growth promoted by some economists within the World Bank. The World Bank has placed extreme inequality at the heart of the poverty problem.