Is Growth Enough? Macroeconomic Policy and Poverty Reduction
IMF Working Papers, July 1, 2002
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- Is Growth Enough? Macroeconomic Policy and Poverty Reduction
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Bibliographic details
- Authors: Carlos A Leite, Charalambos G Tsangarides, Dhaneshwar Ghura
- Published: July 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451854091.001
Summary and central question
- Investigates the existence of "super pro-poor" policies—that is, policies that directly influence the income of the poor after accounting for the effect of growth.
- Confirms that growth raises the income of the poor, although this relationship is less than one-to-one.
Methodology
- Uses a dynamic panel estimator to capture both across- and within-country effects.
- Employs a Bayesian-type robustness check to account for model uncertainty.
Key findings
- Growth increases the income of the poor, but the effect is less than one-to-one.
- Four "super pro-poor" conditions influenced by policy are identified:
- inflation
- government size
- educational achievement
- financial development
Policy implications (implicit from findings)
- Macroeconomic and structural policies that target inflation, government size, educational achievement, and financial development can enhance the poverty-reducing impact of growth.
- Considering model uncertainty and both cross-country and within-country dynamics is important when evaluating policy effectiveness on the income of the poor.
Content in this bundle
- Is Growth Enough? Macroeconomic Policy and Poverty Reduction - WP/02/118