Pro-Poor Growth: The Asian Experience

Abstract

The basic idea of globalization is that it moves resources from less productive uses to more productive ones, thus enhancing economic growth by utilizing comparative advantage, which is endowed differently from one country to another. Similarly, some are in favour of globalization because many economies have achieved unprecedented material progress, contributing significantly to a reduction in global poverty. However, a recent study by Kakwani and Son (2007) has shown that the current process of globalization is generating unbalanced outcomes; many countries and people are left out of the benefits of globalization. Kakwani and Son’s cross-country study of eighty countries during the period of 1984–2001 revealed that, out of 237 growth spells, 106 (44.7 per cent) had negative growth rates and 131 (55.3 per cent) positive growth ones.1 Of 131 spells when growth rates were positive, growth was pro-poor in 55 (23.2 per cent) cases and anti-poor in 76 (32.1 per cent) cases. In 53 out of 106 spells of negative growth rates, the poor suffered a proportionally greater decline in their consumption compared to the non-poor. For a rapid reduction in poverty, a country needs to achieve positive growth rates that are pro-poor. According to these results, this does not seem to be happening globally.