In addition, it introduces the new instruments which enable us to look at pro poor growth from an agricultural perspective. Poor growth is a more accurate and less emotive term and will be used in this guideline. An approach and quickscan screening tool for propoor. Propoor growth can be defined as absolute, where the poor benefits from overall growth in the conomy, or relative which refers to targeted efforts to increase the growth specifically among poor people. Okidi, sarah ssewanyana, lawrence bategeka, and fred muhumuza 8. Implications of economic growth on the poorest are routed through both direct. After the introductory points that follow, there are three main sections. From a policy standpoint, an implication might be that poverty reduction requires. To address this issue, this paper provides an empirical evaluation of the impact of a series of pro growth policies on inequality and headcount poverty. This paper concludes section 4 that a set of tradeoffs may affect pro poor cluster initiatives and that development agencies, donors and governments need to be clear on. A recent definition from researchers at the undp integrates the latter two concepts to include employment, poverty and inequality. The growth process is said to be propoor if and only if poor people benefit in absolute terms, as reflected in an appropriate measure of poverty ravallion and chen, 2003. Section 5 presents the results from the model simulations.
Policies for propoor growth in india cornell university april 1920, 2002 manuela ferro, david rosenblatt and nicholas stern1 i. An introduction nanak kakwani, brahm prakash, and hyun son pro poor growth and pro growth poverty reduction. Following kakwani and pernia 2000, economic growth may be called pro poor if the poor enjoy the benefits of growth proportionally more than the non poor. Asias experience strongly suggests that rapid and sustained economic growth leads to significant poverty reduction.
Ravallion and chen 2003 adopt a broader definition where growth is pro poor if the poverty measure decreases. Propoor growth requires that the poor are able to participate fully in the economy, and propoor growth analysis needs to capture how this can occur. The asian experience situations and some countries have experienced limited poverty reduction despite impressive growth performance, while others have managed to decrease poverty significantly despite relatively low growth. Oct 09, 2015 progrowth is propoor has been the informal slogan of the world bank and the imf for decades, resulting in 35 years of neoliberal economic policies. A note on propoor growth hyun hwa son school of economics, macquarie university, sydney 2109, australia received 4 april 2003. The list below shows some of the causes of poor growth mentioned in various sources. The experience of asian countries in this regard is mixed. Otherwise economic growth may not automatically generate benefits for the poor. Negative per capita growth is quite frequent, while far too few growth spells are both positive and pro poor. Failure to thrive occurs in children whose nutritional intake is insufficient for supporting normal growth and weight gain. In neoclassical growth models, such as solow 19561, cass 19651, and koopmans 1965, a countrys per capita growth rate tends to be inversely related to its starting level of income per person. For this purpose, five approaches that have been most commonly used in recent years are selected. Negative per capita growth is quite frequent, while far too few growth spells are both positive and propoor.
An introduction nanak kakwani, brahm prakash, and hyun son propoor growth and progrowth poverty reduction. The pattern was reversed for a few years in the mid1990s, when the rate of propoor growth rose to 10 percent a yearabove the ordinary growth rate of 8 percent. Erdtechnical note series economics and research department no. Section 2 gives a brief overview on different concepts of propoor growth and the measurement tools sofar suggested in the ppgliterature. Despite the widespread use of the term, there appears to be much less consensus as to what exactly propoor growth means, let alone what its determinants are. It is argued that the satisfaction of a monotonicity axiom is a key criterion for. The measure should be consistent with the direction of change in poverty, in that a positive negative rate of pro poor growth implies a reduction increase in poverty. A change in the lorenz curve indicates whether inequality is increasing or decreasing with economic growth. Humberto lopez the world bank prmpr july 10 abstract is a pro growth strategy always the best pro poor strategy. In this paper, for pro poor growth we adopt the definition. Economic growth in a cross section of countries robert j. Inclusive growth is often confused or conflated with pro poor growth or broadbased growth.
This paper is prepared as part of the multidonor operationalising propoor growth study, which is focusing on aiming to provide advice to governments on how to facilitate the involvement of poor people in the growth process. Son, international poverty centre a recent ipc study analyses global growth rates and their extent of pro poorness. This seems consistent with the analysis of global crossnational data showing that the incomes of the poor move proportionately oneforone with overall average incomes dollar and kraay 2001. The particular focus of the paper is the recent discussion around the concept of pro poor growth, and its implications for policy and development cooperation. According to one view, growth is propoor if the accompanying change in income. The second definition discards the literal interpretation of the concept for a more general, but very much less strict formulation. Normal growth is important for infants, children and adolescents. Macroeconomic policy for propoor growth by rolf maier submitted to the department of economics in partial fulfillment of the requirements for the degree of doctor oeconomiae publicae dr. Kraay 2003 for example advocates that growth is propoor if the poverty measure of interest declines. I32, o15, o40 1 address for corresponde nce 9199982000. Section 3 discusses the policy relevance and limitations of the existing toolbox. 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. We can write the following simple equation for the rate of pro poor growth.
It is argued that the satisfaction of a monotonicity axiom is a key. A new method to measure pro poor growth is presented and used on available data. When i use a word propoor growth and poverty reduction. In response, beginning in the early 1990s, changes in donor objectives.
Trade liberalization and pro poor growth in south africa 2 section 4 describes the dynamic general equilibrium and microsimulation model that is used in this study to jointly assess the impact of trade liberalization on growth, employment and poverty. Jim harvey agriculture has played a major and critical historical role in poverty reduction, most notably in the asian green revolution, which provided the foundation for. This paper looks into the interrelation between economic growth, inequality, and poverty. Education is one of important instrument on which people can improve their lives in other ways. Progrowth is propoor has been the informal slogan of the world bank and the imf for decades, resulting in 35 years of neoliberal economic policies. Introduction economic reforms in india over recent decades have spurred economic growth and contributed to a decline in poverty.
The success of pro poor growth in rural and urban tunisia 199 mohamed hedi lahouel 9. From this perspective, any growth is propoor as long as the incomes of the poor are rising. The pattern was reversed for a few years in the mid1990s, when the rate of pro poor growth rose to 10 percent a yearabove the ordinary growth rate of 8 percent. The measure should be consistent with the direction of change in poverty, in that a positive negative rate of propoor growth implies a reduction increase in poverty. Kakwani and sons crosscountry study of eighty countries during the period of 19842001 revealed that, out of 237 growth spells, 106 44. Failure to thrive typically presents before two years of age, when growth rates are highest. Pakistans desperate need for rapid propoor growth at the sustainable development policy institute sdpi, dr sohail said we have to plan to address rampant energy crisis, looming water crisis and natural and manmade disasters such as floods, earthquakesand droughts, etc. Pro poor growth can be defined as absolute, where the poor benefits from overall growth in the conomy, or relative which refers to targeted efforts to increase the growth specifically among poor people. Trade liberalization and propoor growth in south africa 2 section 4 describes the dynamic general equilibrium and microsimulation model that is used in this study to jointly assess the impact of trade liberalization on growth, employment and poverty. Pro poor growth is a term used for primarily national policies to stimulate economic growth for the benefit of poor people primarily in the economic sense of poverty.
Overall growth and the poorest 20 per cent 7 box 1. Inclusive growth is often confused or conflated with propoor growth or broadbased growth. Measuring propoor growth we assume that a measure of the rate of propoor growth should satisfy the following conditions. As regards regional growth effects, we conclude that growth was weakly pro poor in seven of spains 17 regions, it was neither pro poor nor anti poor in nine regions, and only weakly anti poor. Propoor growth is a term used for primarily national policies to stimulate economic growth for the benefit of poor people primarily in the economic sense of poverty. We assume that a measure of the rate of pro poor growth should satisfy the following conditions.
Section 2 gives a brief overview on different concepts of pro poor growth and the measurement tools sofar suggested in the ppgliterature. Using the notion of propoor growth, this study examines to what extent the poor benefit from economic growth. Human capital, inequality, and pro poor growth in brazil 219 naercio menezesfilho and ligia vasconcellos index 245. This paper concludes section 4 that a set of tradeoffs may affect propoor cluster initiatives and that development agencies, donors and governments need to be clear on. Palanivel the objective of this paper is to assemble on a systematic basis the available data on asian countries and then analyse the relationship between growth and poverty reduction in a longterm perspective, as well as the impact of different macroeconomic variables on. Using this definition, growth will always be propoor whenever poverty falls. But relatively little is known about the broad forces that account for the variations across countries and across time in. Ravallion and datt 1996 also find that primary and tertiary sector growth had greater impact on poverty than secondary sector growth. A derivative inclusiveness index shows that south africa has a very low degree of inclusiveness compared to other. The growth rate by quantile varied from 3 percent for the poorest percentile to 11 percent for the richest, while the rate of propoor growth was around 4 percent. An absolute concept of ppg in turn focuses on the growth rates among the poor, defining growth as pro poor if poverty is reduced.
In this context, growth is defined as propoor or antipoor if there is a gain or loss in the growth rate due to a decrease or increase in inequality. Pro poor agenda for prosperity and development papd. Propoor growth and the poorest home chronic poverty. On the other hand, the strict definition of propoor growth emphasizes how the benefits of. To address this issue, this paper provides an empirical evaluation of the impact of a series of progrowth policies on inequality and headcount poverty.
Jim harvey agriculture has played a major and critical historical role in poverty reduction, most notably in the asian green revolution, which provided the foundation for the largest pro poor growth processes the world has. For growth to become genuinely propoor the poor need to be able to participate fully and on an equal footing in the economy. First, various approaches to defining and measuring propoor growth are scrutinized using a variety of criteria. Propoor growth, absolute and relative definition grid. In addition, it introduces the new instruments which enable us to look at propoor growth from an agricultural perspective. The other contribution is a decomposition methodology that explores linkages between growth patterns and social policies.
In fact, economic growth is seen as pro poor according to kakwani and pernia 2000 if poverty is reduced by the change in income distribution. In other words, it is not enough to have some growth, but the growth rate must be enough for the normal rate. In particular, if countries are similar with respect to structural parameters for preferences and technology, then poor. While everybody seems to favour the pursuit of inclusive growth, this concept is rarely clearly defined in the policy debate. Poverty, economic growth, rural development, human development, india jel. When poverty reduction is the objective for which economic growth is one of the instruments. Parents may express concern about picky eating habits, poor weight gain, or smaller size compared relative to peers of similar age. Chenery and ahluwalias 1974 model of redistribution with growth. The particular focus of the paper is the recent discussion around the concept of propoor growth, and its implications for policy and development cooperation. The pro poor agenda for prosperity and development papd 2018 to 2023 is the second in the series of 5year national development plans ndp anticipated under the liberia vision 2030 framework. First, various approaches to defining and measuring pro poor growth are scrutinized using a variety of criteria. In the past few years, the term propoor growth has become pervasive in discussions of development policy. Delivering a special lecture on the current state of the economy. Using the notion of pro poor growth, this study examines to what extent the poor benefit from economic growth.
It follows the agenda for transformation 20122017 aft. We show how labor regulation is an important part of the investment climate in india and how various types of regulatory change can both increase economic growth and the extent to which the poor benet from economic growth. Propoor growth, absolute and relative definition gridarendal. The pro poor growth debate has its roots in the pro distribution arguments by chenery and ahluwalia in the 1970s. Son, international poverty centre a recent ipc study analyses global growth rates and their extent of propoorness. A central element in the promotion of propoor growth is effective demand for change. We assume that a measure of the rate of propoor growth should satisfy the following conditions.
The propoor growth approach recognizes that the poor can benefit from growth both directly in their livelihoods as workers, farmers and entrepreneurs as well as indirectly as consumers and recipients of taxfunded social services. Clearly both concepts are important to understanding how the poor contribute to and benefit or not from growth. Education is one of investing in human capital, not only has positif impact on economic growth but also allows the poor people to escape from poverty. Poor growth generally describes a child whose current weight, or rate of weight gain, is significantly below that expected of similar children of the same age and sex.
Here, growth is propoor only if the incomes of the poor grow faster than those of the population as a whole. Ravallion and chens 2003 approach tends to fall under this definition. Humberto lopez the world bank prmpr july 10 abstract is a progrowth strategy always the best propoor strategy. Kraay 2003 for example advocates that growth is pro poor if the poverty measure of interest declines. Methodological and empirical issues related to these approaches are presented to analyze each approachs relative strengths and weaknesses in defining and measuring pro poor growth. A new method to measure propoor growth is presented and used on available data.
A slowing of growth rates can indicate various medical problems, even if it does not lead to weight loss. The list of organs typically affected by poor growth may include, but is not limited to. Natural resources and pro poor growth will be of interest to a wide audience and is specifically tailored for policy makers and economic decision makers, from development cooperation agencies to ministries of finance and planning in partner countries. In this scenario, inequality is concurrently declined during the course of growth. In this context, growth is defined as pro poor or anti poor if there is a gain or loss in the growth rate due to a decrease or increase in inequality. The extent to which growth is propoor by this definition depends solely on the rate of change in. This holds across regions, periods, david dollar income levels, and growth aart kraay rates. Meaning, evidence, and policy implications robert eastwood and michael. General constitution detailed list of causes of poor growth. Looking at propoor growth from an agricultural perspective. The relative definition of propoor growth compares the increase in the incomes of the poor with the increase in the incomes of other people. An absolute concept of ppg in turn focuses on the growth rates among the poor, defining growth as propoor if poverty is reduced. Poverty, growth, and inequality in subsaharan africa.