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Inequality and the Dynamics of Poverty and Growth

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  • Ali A Ali
  • Ibrahim A. Elbadawi

Abstract

This paper models the dynamic interactions between growth and distribution in the analysis of the behavior of poverty over time. The model permits formal analysis of the factors that led to the growth collapse as well as the rise in poverty in Africa and other developing regions, except Asia, during 1975-96 period. Using indicators of average country performance during this period-- in terms of the rate of acceleration of growth, changes in poverty and extent of inequality—the model suggests tentative strategies for dealing with poverty. The main policy recommendation of this analysis is that, for the majority of countries—36 out of 47—any serious strategy for poverty reduction must include both policies for accelerating growth as well as measures for effecting more equitable income distribution. Moreover, the latter must be sufficiently deep either to shake-off the "transitional", though lingering, "low equilibrium trap" that characterizes some economies; or to more others from the "bad" equilibrium of stationary, but high, poverty.

Suggested Citation

  • Ali A Ali & Ibrahim A. Elbadawi, 1999. "Inequality and the Dynamics of Poverty and Growth," CID Working Papers 32A, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:32a
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    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/032.pdf
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2000. "Can Africa Claim the 21st Century?," World Bank Publications - Books, The World Bank Group, number 22962.
    2. Janvier Nkurunziza & Floribert Ngaruko, 2002. "Explaining Growth in Burundi: 1960-2000," Economics Series Working Papers WPS/2002-03, University of Oxford, Department of Economics.
    3. Sara Lelli, 2004. "What Money Can't Buy: The Relevance of Income Redistribution for Functioning Levels," WIDER Working Paper Series RP2004-41, World Institute for Development Economic Research (UNU-WIDER).
    4. Janvier D. Nkurunziza & Floribert Ngaruko, 2004. "Explaining Growth in Burundi: 1960-2000," Macroeconomics 0409012, University Library of Munich, Germany.

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    More about this item

    Keywords

    poverty; growth; inequality; distribution; strategy; Kuznets;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D30 - Microeconomics - - Distribution - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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