development objectives. He cites Amartya Sen’s capability approach approvingly, and argues that growth in the income of the poor should be seen as one objective, alongside a number of other non‐ monetary indicators. To the extent that one looks at income, however, Basu proposes that one should focus on _quintile income_ – defined as the mean income among the poorest 20% of the population – as a measure of the “state” of a society’s development, and on the _quintile growth rate_ – the rate of growth of quintile income – as a measure of its “progress”.

In his subsequent tenure as World Bank Chief Economist, he – and the institution – emphasized the progress rather than the state measure. They also doubled the size of the group on which policy efforts should focus to include the bottom 40% of the population in each country.

Yet, despite these recent uses in the policy arena, the concept of “shared prosperity” is not as well‐ established in economics as, say, “social welfare”, “poverty”, or “inequality”. While various different interpretations of each of these terms certainly exist, there is a long‐established literature discussing those conceptual differences, the corresponding approaches to measurement, and related empirical findings. This is not yet true for shared prosperity, although an incipient debate has begun.<sup>3</sup> This short paper aims to do three things: (i) provide a brief conceptual discussion of how the above definition of shared prosperity fits into welfare economics; (ii) review the recent empirical evidence on growth rates among the poorest 40 percent in as many developing countries as possible; and (iii) discuss some policy areas that recent evidence suggests are worthy candidates for “promoting shared prosperity”. These are all obviously broad topics, particularly the third. Our discussion aims to be illustrative, rather than comprehensive.

The paper is organized accordingly. Section 2 contains a brief conceptual discussion of the relationship between shared prosperity and more established concepts in welfare economics, including poverty (single‐ and multi‐dimensional), inequality (of outcomes and opportunities), and mobility. Section 3 looks back at the recent evidence, by examining a multi‐country data set that permits the computation of shared prosperity statistics and provides estimates of the incidence of growth among 83 countries (accounting for 75% of the world’s population) between circa 2008 and 2013. Finally, building on the scholarly literature about policies that raise incomes and promote greater well‐being among the poor, Section 4 briefly reviews a number of interventions with a credible track record of promoting growth among the poor. Section 5 concludes.

# **2. Shared prosperity, social welfare, poverty, inequality, and mobility**

The shared prosperity concept features both in the UN’s SDG 10.1 and as one of the World Bank’s twin goals in its “progress”, rather than “state”, formulation. It seeks to capture changes rather than levels. We can write the growth rate in average incomes (or consumption expenditures) among the poorest 40% of the population in each individual country as follows:

> 3 See, e.g., Rosenblatt and McGavock (2013) and Dang and Lanjouw (2015).

3