Economic growth often helps the poor, but what about the many cases when it does not? The consensus that economic growth reduces poverty, encapsulated by two World Bank economists in the above-quoted article entitled Growth is Good for the Poor, leaves many important questions unanswered. What help does the knowledge that economic growth can reduce poverty provide for economies with few realistic prospects for robust, sustained growth? What hope does the understanding that growth reduces poverty on average provide for poor families that are excluded from prosperity? How should we respond when economic growth undermines the market positions of the poor, becoming what Jagdish Bhagwati calls immiserizing growth? What advice emerges from the linkage between economic growth and poverty reduction for those who hope to make growth even better for the poor? With regard to these vital issues, observations based on aggregated data concerning economic growth’s connection to poverty reduction contribute little. Instead, much can be learned from disaggregating the data and examining cases that defy this relationship, as well as those in which countries did especially well in increasing the income of the poor.
Economic Policy | Political Economy
DONALDSON, John Andrew, "Growth Is Good for Whom, When, How?" (2005). Research Collection School of Social Sciences. Paper 76.
Available at: http://ink.library.smu.edu.sg/soss_research/76