Causas y consecuencia

WP/04/47

When Is Growth Pro-Poor? Cross-Country Evidence
Aart Kraay

© 2004 International Monetary Fund

WP/04/47

IMF Working Paper Research Department When Is Growth Pro-Poor? Cross-Country Evidence Prepared by Aart Kraay1 Authorized for distribution by Ashoka Mody March 2004 Abstract This Working Paper should not be reported as representing the views of the IMF.
The views expressedin this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Growth is pro-poor if the poverty measure of interest falls. This implies three potential sources of pro-poor growth: (a) a high rate of growth of averageincomes; (b) a high sensitivity of poverty to growth in average incomes; and (c) a poverty-reducing pattern of growth in relative incomes. I empirically decompose changes in poverty in a large sample of developing countries into these components. In the medium run, most of the variation in changes in poverty is due to growth, suggesting that policies and institutions that promote broad-based growthshould be central to pro-poor growth. Most of the remainder is due to poverty-reducing patterns of growth in relative incomes, rather than differences in the sensitivity of poverty to growth in average incomes. Cross-country evidence provides little guidance on policies and institutions that promote these other sources of pro-poor growth. JEL Classification Numbers: I32, O40 Keywords: poverty, growthAuthor’s E-Mail Address: akraay@worldbank.org
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The World Bank, Washington, DC., and was on secondment to the IMF’s Research Department while parts of this paper were written. This paper was prepared in the context of the pro-poor growth program sponsored by the World Bank’s Poverty Research and Economic Management (PREM) group. The author is grateful to Roberta Gatti, Francisco Ferreira, andMartin Ravallion for helpful discussions, and to Shaohua Chen for providing data.

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Contents I. II. III. IV. V. VI. VII.

Page

Introduction.................................................................................................................. 3 Empirical Framework .................................................................................................. 5 Data............................................................................................................................ 10 Results........................................................................................................................ 11 Relative Importance of Sources of Pro-Poor Growth ................................................ 12 What Drives the Sources of Pro-PoorGrowth?......................................................... 16 Conclusions................................................................................................................ 21

References.............................................................................................................................. 33 Tables 1. 2. 3. 4. 5. 6. Correlations of Poverty Measures and SurveyMean Income or Consumption......... 22 Decomposing Changes in Poverty: All Spells ........................................................... 23 Decomposing Changes in Poverty: Long Spells........................................................ 24 Correlates of Pro-Poor Growth: All Spells ................................................................ 25 Correlates of Pro-Poor Growth: LongSpells............................................................. 26 Multivariate Growth and Distributional Change Regressions ................................... 27

Figures 1. Relative Growth Incidence Curves ............................................................................ 28 2. Sensitivity of Poverty to Growth in Percentile p ..........................................................