Pro-poor Growth Research Articles

Measuring and Determinants of Inclusive Growth: Evidence from Indonesia

The understanding that high growth does not guarantee an increase in the welfare of society as a whole is the cause of the increasing popularity of the concept of inclusive growth. inclusive growth is found in Indonesia's National Medium-Term Development Plan (RPJMN) 2015-2019 and RPJMN 2020-2024. This indicates that the Indonesian government is very concerned with more equitable growth. But there is no measure that is able to describe inclusive growth. In empirical studies also still use a variety of measures. For that we try to promote one measure of inclusive growth with a pro-poor growth measure approach. Our measure has proven to be able to explain growth, poverty reduction and inequality better than other measures. We also analyze the determinants of inclusive growth using panel data. We place greater emphasis on the role of low-income communities in inclusive growth.

The effect of Financial Development on Pro-Poor Growth: evidence from Sub-Saharan African Countries

ABSTRACT This paper extends the empirical analysis establishing the significant and positive/negative influence of finance on growth/poverty by examining the contribution of financial development to pro-poor growth. We investigate the relationship between financial development and pro-poor growth in a panel of 29 countries from sub-Saharan Africa over the period 1994–2019. We focus on the vast majority income as the main indicator of pro-poor growth. We use the recent financial development index as a measure of financial development. Using Pooled Mean Group-ARDL estimation in a dynamic heterogeneous panel framework, we obtain the following results: (i) from linear analysis, there is a positive and significant effect of financial access, financial efficiency and the overall financial development index on pro-poor growth in the short run, while in the long run, only financial efficiency affects negatively and significantly pro-poor growth; (ii) results show that the nonlinear relation is not verified in the short run, while in the long run, there is an inverted U-shaped relationship between the financial development index, financial access and financial depth and pro-poor growth. This suggests that too much finance can be detrimental to pro-poor growth in SSA. Financial inclusion of the poor combined with governance is necessary to improve pro-poor growth.

Economic Connectiveness and Pro-Poor Growth in Sub-Saharan Africa: The Role of Agriculture

In Sub-Saharan Africa, economic growth is essential for poverty reduction, and pro-poor growth is the renewed focus of today’s political debate. The present paper adds to the literature on the growth–inequality relationship. It provides an in-depth analysis of the potential role of agriculture in promoting pro-poor growth in rural and urban areas compared with that of other activities. This aspect still lacks rigorous empirical support. Using the Nexus project SAMs by the International Food Policy Research Institute, this study identifies the level of ‘keyness’ of 36 activities (12 are agricultural) in nine Eastern, Western, and Central African countries using the inter-industry linkages analysis. Afterwards, it investigates the income distribution multipliers effects of activities growth across households classified in quantiles in rural and urban areas. Therefore, the paper adds to the literature, mainly focused on rural poverty and information on the growth effect on urban poverty, which is important in the context of rapid urbanization and the growing number of poor people in African cities. Apart from country-specific factors, the results confirm the strong integration of agriculture with the economy. The growth of key agricultural activities presents the most pronounced multiplicative effect on the income of rural households in the lowest quantiles. Poor urban households also benefit from their growth, but not to the same extent as rural households with an increase in the rural–urban income gap.

Inclusive Growth and Structural Transformation: The Role of Innovation and Digitalisation Spillover

Structural transformation is a compelling measure of economic progress as it shifts from less productive to more productive sectors, spurred by technological improvement and digitalisation. Despite the benefits of structural transformation in fostering economic growth, it has been contended that it will exacerbate income inequality. Given the critical role of digitalisation over the years in Africa, the current study investigates the pattern and impact of structural transformation on inclusive growth. To accomplish this, we utilised both absolute (poverty) and relative (income inequality) measures of pro-poor growth for all African countries. Using quantiles via moments panel model, we showed that the structural transformation from agriculture to services reduced the incidence of poverty (extreme poverty) while increasing inequality (Gini coefficient). On the other hand, manufacturing had no significant effect on poverty or inequality, indicating the region’s slow pace of industrialisation. Using income share measures, we found evidence of inequality across and within sectors, particularly in the services sector. Finally, we observed that digitalisation and technological processes significantly reduced the incidence of extreme poverty and inequality. Hence, the study recommends that Africa capitalise on its comparative advantage in the agricultural sector by establishing investment and manufacturing zones to develop the industrial sector. Furthermore, gains in the manufacturing sector could be realised through a concerted effort to improve the industrialisation process.

Pro-poor Growth: Concepts and Measurement with Country Case Studies (Distinguished Lecture)

This paper looks into the interrelation between economic growth, inequality, and poverty. Using the notion of pro-poor growth, we examine the extent to which the poor benefit from economic growth. First, various approaches to defining and measuring propoor growth are scrutinised using a variety of criteria. It is argued that the satisfaction of a monotonicity axiom is a key criterion for measuring pro-poor growth. The monotonicity axiom sets out a condition that the proportional reduction in poverty is a monotonically increasing function of the pro-poor growth measure. The paper proposes a pro-poor growth measure that satisfies the monotonicity criterion. This measure is called a ‘poverty equivalent growth rate’, which takes into account both the magnitude of growth and how the benefits of growth are distributed to the poor and the non-poor. As the new measure satisfies the criterion of monotonicity, it is indicative that to achieve rapid poverty reduction, the poverty equivalent growth rate—rather than the actual growth rate—ought to be maximised. The methodology developed in the paper is then applied to three Asian countries, namely, the Republic of Korea, Thailand, and Vietnam.

Pro-poor Growth and Policies: The Asian Experience (The Quaid-i-Azam Memorial Lecture)

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 long-term perspective, as well as the impact of different macroeconomic variables on the intensity of this relationship. The results indicate that there is not only a strong positive relationship between growth and poverty reduction, but also that this relationship is highly variable across countries and time periods. The key macroeconomic determinants of the degree of pro-poor growth appear to be the rates of employment and agricultural growth. Inflation, at least up to a certain rate, does not impact poverty negatively, while the role of exports is essentially indirect through the contribution to the overall rate of economic growth. Examination of the change in policy stance of the Asian countries during the 1990s in relation to the 1980s demonstrates that on balance the mix of policies has not been pro-poor. The apparent sacrifice of growth in pursuit of macroeconomic stability has diminished the impact on poverty reduction. Given the relatively weak trade-off between inflation and growth with regard to the impact on poverty and the fact that inflation rates are currently low in the region, it is argued that countries can be more flexible in their policy stance with regard to the adoption of more growth-oriented as opposed to stabilisation policies. In particular, a case is made for resorting to a more expansionary counter-cyclical fiscal policy, led by higher levels of public investment, supported by appropriate monetary and exchange rate policies. The paper concludes with a detailed description of the policies designed to achieve faster agricultural development and greater employment generation.

Pro-poor Growth and Governance in South Asia—Decentralisation and Participatory Development

The launch of the SAPNA study “Pro-poor Growth and Governance in South Asia: Decentralisation and Participatory Development”, during the 21st Annual Conference of the Pakistan Society for Development Economics was most fortunate. The presence of Minister Daniyal Aziz in the Chair was not accidental. When the Prime Minister of Pakistan visited Sri Lanka recently, he was presented with a copy. He immediately saw in this Pro Poor Growth Strategy, the link between Pakistan’s attempt at decentralisation reforms to deepen political democratic processes and the need for a more balanced growth path, which could also result in greater economic democracy. He suggested that Minister Aziz chair this session and evolve a more holistic conceptual framework to guide his own work in the National Reconstruction Bureau.

Governance and Pro-poor Growth: Evidence from Pakistan

The issue of governance has gained importance over the last two decades and became a key component of policies for economic development. Good governance acts as a positive force to influence economic growth. A growing amount of available evidence suggests that lack of quality governance hinders growth and investment, and aggravates poverty and inequality. In fact, governance problem foil every effort to improve infrastructure, attract investment, and raise educational standard. As the developing countries are characterised by weak institutions, low growth, poverty and inequality all which translate into low levels of human development. The multiplicative effects of these outcomes result in poverty traps that are extremely difficult to break out. This state of affairs has forced governments to embark on a wide range of reforms in their institutions of governance and economies with the goal of achieving economic growth.

Promoting Domestic Commerce for Sustainable Pro-poor Growth

To frame the issue, two characteristics of Pakistan should be noted. First, Pakistan has a very large market of 160 million people. For decades, this fact has been ignored in policy because of the focus on production and exports.1 Second, a large and growing population has now produced a huge youth bulge in the population which will work itself out for much of this century: 50 percent of the population is “under 20”.2 Progress of the spread of education has been slow, leaving this bulge largely unskilled, and hence with limited employment possibilities. Domestic commerce is the most pro-poor growth possibility in the country. Currently, it employs about 40 percent of the labour force and contributes about 52 percent to GDP. If it can be provided with an enabling environment, our estimates suggest that it could help increase the growth rate by at least 2 percentage points. In addition, a pick up of activity in this area would increase employment substantially. Following this agenda would need a huge increase in construction activity, strong development in hotelling, retail shop, transport, warehousing, storage, and other service industries. The employment impact of this would be far larger than through investment in any other sector.

ANALYSIS OF THE ROLE OF TOURISM IN POVERTY REDUCTION IN WEST JAVA

Poverty reduction is not usually at the heart of the tourism agenda. Yet tourism is significant in many poor countries and is already affecting the livelihoods of millions of poor people, positively and negatively. Poverty reduction requires pro-poor growth. Concerted effort is needed to maximize the contribution of tourism to this. Pro-poor tourism (PPT) interventions aim to increase the net benefits for the poor from tourism, and ensure that tourism growth contributes to poverty reduction. PPT is not a specific product or sector of tourism, but an approach. PPT strategies aim to unlock opportunities for the poor whether for economic gain, other livelihood benefits, or participation in decision-making. Pro-poor tourism overlaps with, but is different from, the ‘sustainable tourism agenda. Pro-poor focuses more on countries of the South, not on mainstream destinations in the North. Poverty is the core focus, rather than one element of (mainly environmental) sustainability.

Pro-Poor Growth In Reducing Poverty After Covid-19

Yoksulluk ve ekonomik büyüme ilişkisi, iktisat biliminde önemli tartışma konularından birisidir. Ekonomik büyüme refah düzeyinde artış sağlar. Dolayısıyla yoksulların refah düzeyinde de artış olur. Ekonomik büyüme, yoksulluğu azalttığı için yoksul yanlısı büyüme olarak ifade edilir. Yoksul yanlısı büyüme, yoksulluğu hafifleterek, bu artışın Gayrisafi Yurtiçi Hasıla’da görülmesidir. Bunun anlamı yoksulların ekonomik büyümeden zenginlere nazaran daha çok yararlanması olarak kabul edilir. Yoksul yanlısı büyümenin temelini, ekonomik büyümenin yoksulluğun giderilmesinde yetersiz kalmasına dayanır. Bu noktadan hareketle, yoksul yanlısı büyümede bölüşüm, gelir dağılımı eşitsizliği ve gelirin yeniden dağılımı konuları ön plana çıkmaktadır. Özellikle gelirin yeniden dağılımı, ekonomik büyüme açısından topluma eşit yansıtılması büyük önem taşımaktadır. Bu çalışmada, ekonomik büyümenin yoksulluğa etkileri ve yoksulların ekonomik büyümeden ne ölçüde faydalandığı ve faydalanması gerektiği üzerinde durulmuştur. Ekonomik büyümenin etkinliği açısından, gelirin yeniden dağılımının nasıl olması gerektiği üzerinde durulmuştur. Yoksul yanlısı büyüme, gelir dağılımı eşitsizliği ile ilişkilendirilmiştir. Bu çalışmanın temel amacı, Covid-19 pandemisinin savunmasız nüfus üzerindeki etkisini minimize etmek için politika yapıcılara yönelik öneriler geliştirmektir. Bulgular, Covid-19 pandemisinin başlangıcından bugüne kadar kamu harcamalarında, çeşitli demografik gruplar ve yoksullara yönelik sosyal koruma harcamalarını arttırdığı gözlenmiş ve bu desteklerin pandemiyle sınırlı kalmayarak sürdürülebilirlik kazanması önerilmektedir.

Assessing Inclusive Growth in Nigeria: An Application of the Social Opportunity Function

Inclusive growth, pro-poor growth and broad-based growth are all terms used to explain growth processes that enable the entire population including the poor to actively participate and benefit from the economic growth process. In recent times, Nigeria’s GDP has been low, this is occasioned by slow growth, recession and the covid-19 pandemic. GDP growth rate had averaged 0.82% in the last decade and reached an all-time low of -14.66% in the first quarter of 2022. This study investigates inclusive growth in Nigeria using the social opportunity function. The social opportunity methodology is used to determine whether inclusive growth has been achieved overtime using education, health and employment sectors of the economy. The objective of this study is to assess inclusive growth performance in Nigeria as it relates to equitable distribution of opportunities. Data obtained from the General Household Survey (GHS) 2012/2013, 2015/2016 and 2018/19 of the National Bureau of Statistics were used for the analysis. The study revealed that inclusive growth was not achieved in Nigeria in the provision of employment, education and health care for the population. For inclusive growth to be achieved, timely interventions in education, health and unemployment are recommended.

Targeted Poverty Alleviation and Pro-Poor Growth

This article assesses the pro-poor growth effect in China’s rural populationsover the period 2007–2018 using the strict pro-poor index proposed byNanak Kakwani. The results show that while China’s rural areas did notexperience strictly defined pro-poor growth between 2007–2013, acontemporary pro-poor effect was observed during which Targeted PovertyAlleviation (TPA) policies were implemented. The conclusion is robust inthe dimensions of income and expenditure and non-income well-being.Through a heterogeneity analysis, this article finds differences in pro-poorgrowth among various groups. In particular, poor women, seniors, children,and geographic areas (such as western China) benefited more during thetargeted poverty-alleviation policy period than their counterparts. Finally,we use Kakwani’s shared prosperity index to show that China is activelymaking more positive efforts and preparations towards attaining commonlyshared prosperity.

Pro-Poor Growth Meets Dualistic Development

Pro-poor growth refers to how incomes change for the poor and for otherswhen economic growth occurs. Dualistic development refers to three typesof economic growth patterns in a two-sector economy: 1) modern sectorenrichment, 2) traditional sector enrichment, and 3) modern sectorenlargement. The question asked in this article is, what can we say aboutthe pro-poorness of each of the three types of dualistic development? Themain conclusion I reach is that pro-poor growth works well for the first twodualistic growth types but runs into some difficulties for the third. Toovercome these problems, I posit some axioms for dualistic development –particularly, by treating pro-richness and pro-poorness as distinct orderings.

Pro-Poor Growth in Algeria: a Statistical Approach

This research is concerned with studying the pro-poor growth by introducing the various theoretical approaches that addressed the pro-poor growth, and then analyzing the phenomenon of poverty and its most important characteristics in Algeria and determining the characteristics of disparity in the distribution of income in Algeria. The study also used few indicators to determine the extent to which growth favors the poor in Algeria. The most important findings of the study were that economic growth was modest in favorof the poor, and this favoritism was not the result of the fruits of economic growth, but rather as a result of the redistribution of income as a result of the expansion of public spending in Algeria, which depends on oil rents during the period 2000-2018

Has economic growth reduced poverty in Nigeria? A critical analysis of the last two decades

Purpose — This paper aims to examine how Nigeria's economic growth over the past two decades has contributed to poverty reduction.Method — This study adopted the desktop research method of qualitative and quantitative data and used various sources, including academic journals, publications, books, articles, and reports. The National Bureau of Statistics (NBS) of Nigeria, the United Nations Development Programme (UNDP), the Human Development Report, the World Bank Indicators, and the Central Bank of Nigeria (CBN) Statistical Bulletin are all places where secondary statistical data comes from.Result — Nigerian economy has experienced significant growth over the last two decades, but poverty rates in the country remain high. We also discovered that the Nigerian economy's high level of inequality, corruption, jobless growth, and monocity are some issues that have hindered the translation of economic growth into significant poverty reduction.Recommendation — Based on the analysis of this research and the peculiarity of the Nigerian economy, this paper recommends that diversification of the economy, investment in public services, and policies that encourage pro-poor growth are effective strategies that would lead to more significant poverty reduction. In addition, there is a need to study the nature of inequality in Nigeria. An in-depth study needs to be done on income inequality and the multidimensional forms of inequality prevalent in the country.Contribution — Research on economic growth and poverty in Nigeria mostly concentrated on the relationship between these variables. Only a few studies have investigated why the poverty rate continues to rise amid economic growth. This study tries to fill this gap and contribute empirically to the current literature on economic growth and poverty in Nigeria by studying the economic situations and factors surrounding the country's rising poverty rate.

Analysis of Pro-Poor Growth on Poverty Reduction across Vulnerable Social Groups in the Case of Emerging Regional States, Ethiopia

Since Ethiopia's inception of a pro-poor economic strategy, empirical evidence on how this policy benefited the poorest has been lacking, particularly in emerging regional states. To address the issues in this problem in accordance with pro-poor growth policy, the research utilized the ECSA surveys to apply the all-pro-poor-growth decompositions technique. According to the findings, the poorest of the poor were excluded from the benefits of such growth. Pro-poor income growth made just a minor contribution to the alleviation of absolute and relative poverty. The general income growth across all vulnerable social groups, except the disabled group on 1995-96 to 1999-2000, increased in all the entire transition periods; while at the same time the growth of pro-poor incomes showed decline inversely. Growth only benefited the poor over the non-poor on all poverty measures from 2004-05 to 2010-11. Between 2010-11 and 2015-16, there was modest pro-poor income increase among the vulnerable, but only in terms of headcount and poverty gap levels. According to the findings of the research, Ethiopian growth is not pro-poor; rather, it is anti-poor growth. To address this unprecedented result, national poverty reduction policies must be changed, with a strong emphasis on pro-poor measures. Keywords: Pro-Poor Growth, Vulnerable Social Groups, Emerging Regions of Ethiopia, Income Growth, Income Redistribution.

Application of the Poverty Equivalent Growth Rate (PEGR) Method (Case Study: Household Income Group in South Sulawesi 2016-2018)

The purpose of this study is to analyze pro-poor growth in South Sulawesi Province with an income dimension approach for the classification of urban and rural areas. This study reveals the poverty situation in South Sulawesi and the extent of the growth of the poor population. In addition, an overview of the effects of growth and distribution effects on changes in poverty is also obtained. Using SUSENAS data from South Sulawesi Province from 2016 to 2018, it was found that growth tends to have a greater impact on reducing poverty in rural areas than in urban areas based on the results of the Shapley decomposition. The results of calculating the degree of pro-poor growth with PEGR, show that income growth tends to be trickle-down from 2016 to 2017. The decline in the poverty rate did occur but the benefits of growth received by the poor were proportionally less than the non-poor. Income growth shows pro poor in the period from 2017 to 2018.

Assessing Pro-poor Growth in The European Expansion Countries in The Light of The Convergence Criteria

Economic growth is an important factor in poverty reduction. Usually, different societal groups differ in benefiting from growth, and the optimum situation is with the pro-poor growth. This paper is an attempt to determine whether growth in European expansion countries was pro-poor during the period 2006-2018 when convergence criteria imposed by the Maastricht Treaty. This research gets its importance from the fact that it discusses the pro-poverty growth in an area and international economic prospective that have not been previously addressed, and it uses the inductive method to reach its objectives. The paper concluded that growth was pro-poor in (Poland, Malta, Czech, Latvia, Romania, Estonia), while it was not pro-poor in (Cyprus, Bulgaria, Hungary, Slovenia, Slovakia, Lithuania). The paper also concluded that the expanding countries that were able to quickly adapt to convergence criteria achieved pro-poor growth regardless of their income levels

The Sundarbans: Sustainable tourism, livelihoods and economies involving Bangladesh and India

The Sundarbans, considered as the tourism heartland of South Asia and compared to Amazon rainforest for its expanse and biodiversity of flora and fauna spanning over 36,000 square kilometers, is currently at risk of massive depletion. The disaster can be avoided through sustainable tourism that minimizes negative social or environmental impacts and conserve fragile ecosystem consisting of flora and fauna and their habitats. This sustainable tourism can draw upon its basic tenets from the ‘’Sustainable Development Goals’’ propagated by World Tourism Organization. For both Bangladesh and India, it is obligatory under the remit of sustainable tourism to shift policy focus from growth to equity, thus, paving the way for strong institutions capability of regulating the tourism industry and distributing assets to facilitate ‘pro-poor growth’ policies and actions. As the current sustainable tourism debate is patchy, disjointed and often flawed with false assumptions and arguments the discourse on sustainable tourism of the Sundarbans needs to be oriented towards a thoroughbred scientific level, a systemic perspective and an interdisciplinary approach.