PHA-Exchange> The Poverty-Growth-Inequality Triangle

[claudio at hcmc.netnam.vn]

from "Ruggiero, Mrs. Ana Lucia (WDC)" <ruglucia at PAHO.ORG> -----
 
I THOUGHT THIS ISSUE HAD BEEN RESOLVED OVER A DECADE AGO....
Claudio

The Poverty-Growth-Inequality Triangle
François Bourguignon
Senior Vice President and Chief Economist, The World Bank

This paper was presented at the Indian Council for Research on International 
Economic Relations, New Delhi, on February 4, 2004

 Available online as PDF file [32p.] at:
            
http://econ.worldbank.org/files/33634_PovertyInequalityGrowthTriangleFeb24.pdf 

"........A recurring ISSUE in discussions on development is whether the main 
focus of development strategies should be placed on growth, or poverty, and/or 
on inequality. This paper argues that this way of formulating the question of 
development goals poses a false dilemma. Rather, the answer can be simply 
expressed in two statements: First, the rapid elimination of absolute poverty, 
under all forms, is a meaningful goal for development. Second, to achieve the 
goal of rapidly reducing absolute poverty requires strong, country-specific 
combinations of growth and distribution policies.

 

These two statements raise conceptual, measurement, theoretical and empirical 
issues, including clarifying the distinction between absolute and relative 
poverty. Absolute poverty is defined in reference to a poverty line that has a 
fixed purchasing power determined so as to cover needs that are physically and 
socially essential. Setting absolute poverty reduction as the prime development 
goal is thus simply saying that a fundamental objective of development is to 
ensure that everybody satisfies his/her basic needs. The poverty line may be 
multi-dimensional, incorporating both an income poverty line for needs that can 
be met monetarily, and non-monetary lines for other needs. Absolute poverty 
lines need not be the same across countries, even after correcting for 
purchasing power parity for income poverty, as basic needs are bound to differ 
across societies....."

 

Content:

INTRODUCTION 

SECTION 1

THE SIMPLE ARITHMETIC OF POVERTY, INEQUALITY AND GROWTH

SECTION 2

TWO-WAY RELATIONSHIP BETWEEN GROWTH AND DISTRIBUTION

A. Effects of growth on distribution 

B. Effects of inequality on the rate of growth 

Credit Market Imperfections

Redistribution in a Democratic Context 

Redistribution through Social Conflict 

Conclusion: THE SCOPE FOR REDISTRIBUTION IN DEVELOPMENT

References 


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