Poverty, pro-poor growth and simulated inequality reduction

With pervasive inequalities in growth throughout the developing world, this paper argues that a redistribution process is required to address this problem. The paper shows that in middle income countries a small redistribution can have a large impact on poverty reduction. Additionally, it shows that pro-poor growth, defined as growth patterns that reduce inequality, can save an entire generation from living in poverty

The paper presents some exercises which guage the scale of the effect of inequality reduction on poverty. Some important findings include:

• growth alone will not eliminate poverty
• it is redistribution of economic growth which is most needed
• attainment of the MDGs requires the poor achieve higher growth rates than the non-poor
• specific policies are needed to promote productive sectors from which the poor obtain their income.