Examination of Non-Linear Dynamics in Pro-poor Growth Framework: A Case Study of Pakistan

Purpose: The study evaluated the existence of non-linear dynamics in pro-poor growth framework and examined that whether the later stages of economic development supports to decrease poverty and income inequality in a country like Pakistan. For this purpose, the study utilized five household surveys from 2001-2011 and focused the existing federal reforms of pro-poor growth in a country. Methodology: The study compared Kakwani’s methodology of ‘pro-poor growth index’ with newly suggested ‘poverty intensive curve’, which satisfied the monotonicity criterion of pro-poor growth and poverty reduction. Findings: The results show that at given time period, economic growth and income inequality considerably reduces poverty estimates in majority of the growth phases, while, at later stages of economic development, it sharply increases the poverty headcount, however, the inclusion of social expenditures in pro-poor growth framework considerably reduces the poverty headcount that trickle down to the poor as compared to the non-poor in a country. Recommendations: The existence of non-linear dynamics in pro-poor growth framework is desirable for pro-growth policies for judicious income distribution.