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Inequality

Economic growth, inequality and poverty reduction: Does pro-poor growth matter?

For sustainable growth, the pattern of growth matters

Authors: A. McKay; A. Sumner
Publisher: Institute of Development Studies, Sussex, UK, 2008

Conventional wisdom is that growth is the most important and maybe the easiest driver of poverty reduction. This briefing argues that various factors influence the magnitude of the poverty reduction that growth can achieve, including initial inequality, the how growth is distributed across groups of people, the composition of public expenditure, the role of labour markets, etc. It focuses particularly on the importance of ensuring that growth in developing countries is broadly inclusive and delivers on outcomes that people value. Three key recommendations to redistribute the benefits of growth are proposed:

  • redistributive and transformative public expenditures to break the intergenerational transmission of poverty
  • policies to increase the rate of job creation from growth
  • broad-based sectoral growth, particularly supporting food crop agriculture